Justin Barnes, executive director of the Ohio Chamber of Commerce Research Foundation, says this report builds support for keeping the deduction.
The deduction, known as BID, allows business owners to not pay taxes on the first $250,000, and a flat 3% rate after that.
“This is another avenue for lawmakers to understand how businesses are impacted by taxes in the state of Ohio,” says Barnes.
“The study attempts to analyze what might have happened, using certain assumptions. But we should look at what we know did happen. In fact, Ohio’s economic performance between the start of the business income deduction and the beginning of the pandemic lagged behind that of the nation,” Zach Schiller, Policy Matters Ohio research director, said in a written statement.
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Policy Matters Ohio, a liberal think tank, says there are other investments that could be made with that revenue to spur economic growth, such as making college more affordable. The group also says Ohio is still underperforming the rest of the country in several metrics of economic growth. Source www.wksu.org
The deduction results in a $1.1 billion loss in tax revenue for the state.
In 2019, House Republican leadership with support from most Democrats tried and fell short of reducing the deduction.
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