Monday, June 30, 2008

Abolish the State income tax?

Today's Columbus Dispatch editorialized against State Rep. John Adams's proposal to gradually abolish the Ohio income tax.

There is a lot to like about the idea -- lowering taxes usually has a stimulating effect on the economy, and it would eliminate an intrusive tax that requires a large bureaucracy to collect. But the Dispatch's arguments are also sound. The State can barely balance its budget now, and running a deficit is not an option, and Rep. Adams's argument that the economic stimulus from lowering the income tax would offset the loss of the tax sounds a bit too pie in the sky in the face of our economic realities.

There is one more reason why it won't work. The State has cut spending almost as much as it is possible to do so. The reason our taxes are where they are, is that we have to pay for the State share of unfunded Federal mandates. Removing these is not within the General Assembly's power, unless they (1) want to live with reduced Federal funding (not necessarily a bad idea, but one that will take an unusual degree of political courage), or (2) want to recommend to the voters an Ordinance of Secession. Even I don't think we're ready for that ... yet.

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