To amend section 5747.02 of the Revised Code to phase-down the state income tax to a flat rate of 2.75% over two years.
HB30 would change Ohio’s individual income tax structure by phasing it down over two years to a flat 2.75% rate for most nonbusiness income. The bill keeps the existing lower bracket exemption threshold, but it simplifies the current graduated rate schedule by reducing the top marginal rates in stages: for tax years beginning in 2024, income above the first bracket would be taxed at 3.5% above $100,000; for 2025, the upper rate would fall to 3.125% above $102,400; and beginning in 2026, the bill would replace the graduated structure with a single 2.75% rate above the applicable threshold. It also retains the separate 3% tax on taxable business income.
The bill would amend Ohio Revised Code section 5747.02, which governs the state income tax for individuals, trusts, and estates. It would also repeal the existing version of that section and direct the Tax Commissioner not to make the usual inflation adjustments to the income thresholds in 2025 and 2026. In practical terms, the measure would lower income tax liability for many taxpayers, especially those with income above the current middle and upper brackets, while leaving the business-income tax treatment largely unchanged.
The general sentiment reflected in the bill’s introduction is pro-tax-cut and pro-simplification. The caption and structure indicate a policy goal of reducing rates and moving Ohio toward a flatter income tax system, which is typically framed as providing taxpayer relief and improving competitiveness. There is no recorded committee testimony or vote history in the materials provided, so no formal opposition or support was documented in discussion.
The main point of contention likely concerns revenue effects and distributional impact. Supporters would likely emphasize tax relief, simplification, and potential economic growth, while critics would likely focus on reduced state revenue for schools, local government functions, and other public services, as well as whether the benefits would be concentrated among higher-income taxpayers. Because the bill was only introduced and had not advanced in the provided history, those debates appear not yet to have been formally aired in committee.
HB30 would substantially revise Ohio Revised Code section 5747.02 by replacing the current graduated individual income tax rates with a phased reduction toward a flat 2.75% rate, while preserving the separate 3% tax on taxable business income. It would also alter the inflation-indexing mechanism by freezing the annual adjustments to income thresholds in 2025 and 2026, and it would repeal the existing version of the statute. The bill would directly affect individual taxpayers, trusts, and estates subject to Ohio income tax, and indirectly affect state revenue streams used for schools, local government functions, and the general revenue fund.
The bill’s overall sentiment appears favorable toward tax reduction and simplification, as reflected in its purpose statement and sponsor framing. Because the bill was only introduced and there are no committee transcripts or votes in the provided record, there is no documented public debate to show formal support or opposition. Based on the text alone, the measure is presented as a taxpayer-relief proposal rather than a contested compromise.
The likely areas of contention are the size and timing of the tax cut, the loss of state revenue, and the distribution of benefits across income groups. Supporters would likely argue that a flatter, lower rate improves competitiveness and provides broad tax relief, while opponents would likely argue that the bill could reduce funding for schools and local governments and disproportionately benefit higher-income taxpayers. The bill also freezes inflation adjustments for two years, which could be criticized as reducing the responsiveness of the tax code to cost-of-living changes.