Currently, Ohio residents whose estates are valued at $338,333 or more pay an estate or “death” tax after they die. According to the Columbus Dispatch, the state chapter of Americans for Prosperity is pushing for a statute to repeal the tax, charging that the tax is causing individuals and businesses to relocate to other states without an estate tax.
Efforts to eliminate the Ohio state tax have been difficult because 80% of its revenue goes to local communities. "They are a very powerful lobby," says former Representative Larry Wolpert. "People seem to really want this, but the bureaucrats don’t because they are going to lose money." Wolpert’s House bill to repeal the tax was a priority for the Republican leadership in the House in 2007.
According to an article from Americans for Prosperity, Ohio features one of the highest state estate tax rates (7%) and lowest asset thresholds – $338,333 – in the country. To show the negative effects of high estate taxes the group notes a deceased Ohio senator, Howard Metzenbaum, a liberal politician who ardently fought against big business and all efforts at deregulation. Before his death, he moved to Florida, thus avoiding Ohio’s income and estate taxes. “If a liberal lion like Metzenbaum is willing to relocate late in life to avoid his state’s death tax,” states the author, “maybe living politicians in Ohio will better understand how their confiscatory tax laws are driving its citizens to warmer climates.” When people leave the state, so goes tax revenue and jobs.
This phenomenon is only exacerbated with a federal death tax. Studies conducted by Douglas Holtz-Eakin, Ph.D, Cameron T. Smith, M.A. and Stephen Entin, M.A. discuss the significant negative impacts on US capital accumulation, employment, productivity and economic growth. Holtz-Eakin’s estimates a gain of 1.5 million jobs nationally from a repeal. In contrast, he estimates 500,000 job losses nationally with a $1 million exemption and 55% rate. In the case of Ohio, he estimates the creation of 58,363 new jobs with a repeal and an estimated loss of 19, 454 without. Congress and the Ohio Legislature must vote for a repeal. Let’s vote for jobs!