Ohio’s Tax Code Hinders Economic Growth

In May 2009, Forbes ranked Toledo as the worst job market among mid-sized cities, citing massive industry decline in the past decade. However, the plight of our community is not isolated; Cleveland, Dayton and Youngstown make the list for worst job markets in the nation, and businesses continue to hemorrhage from our borders. National Cash Register abandoned Dayton over the summer, and this month American Greetings announced plans to possibly relocate from its Brooklyn headquarters.

So what is to blame for Ohio’s death spiral of job loss and economic decline? Many people point fingers at our state’s frigid winter temperatures, claiming that businesses and families would simply prefer a more temperate climate. In some instances, I’m sure this is the case. But consider some of America’s northern-most states, like Washington, Montana, and North and South Dakota. According to the ALEC-Laffer State Economic Competitiveness Index, Washington ranked 5th in the nation for economic performance in 2009. Similarly, Montana ranked 4th, North Dakota 14th, and South Dakota 11th. Even Alaska far surpasses Ohio’s economy, resting at a comfortable 25th.

When considering what all these states have in common, they share one obvious trait: their taxes are much more competitive than Ohio’s. Washington, South Dakota and Alaska lack a state income tax. Montana lacks a sales tax and North Dakota lacks an estate tax. Unfortunately, not only does Ohio have all of these taxes, but they are among the highest in the entire country. As a result, we sit at paltry 49th, only outshining high-tax, low-growth Michigan.

In 2009 alone, more than 200,000 Ohio jobs were lost and approximately 105,000 taxpayers fled the state within the past five years. Not surprisingly, they are flocking to the low-tax states of the South and West, taking their jobs and wealth with them. At the center of Ohio’s economic decline is a deficient business climate and burdensome taxes, which has shrunk our tax base and shriveled the economy.

The first step toward making lasting improvements to Ohio’s economy is easing the tax burden on businesses. As a small business owner, I understand how our state’s poor tax rates can hinder economic growth and job creation, especially when businesses can make a better profit elsewhere. It has been my top priority as your state representative to foster small business growth and encourage lasting job opportunities.

I have also worked to lower the price tag of state government by making our agencies and services work more efficiently. By trimming waste and keeping state spending transparent, we can reduce our reliance on the taxpayers and ensure that each dollar is spent effectively.

These two goals are the first vital steps toward creating jobs and making Ohio nationally competitive. Although raising taxes to fill a budget deficit seems like an easy solution, it actually deepens the problem by repelling businesses that have simply had enough of being soaked with taxes. Instead of taking a quick-and-easy way out, we need to start conveying to the rest of the nation that Ohio is once again open for business and willing to rebuild our economy.

If you have any questions or concerns, I encourage you to contact my office at (614) 466-1731 or write to me at Representative Barbara Sears, 77 S. High Street, 10th Floor, Columbus, Ohio 43215. You may also email me at District46 at ohr.state.oh.us.

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