Will State Tax Reform Stimulate Growth?

Various theories exist on whether tax cuts stimulate economic growth. Many economists argue they do by freeing money that can be otherwise spent and invested by citizens and businesses. The one drawback in this reasoning is that tax cuts also reduce public services, including some that are vital to supporting economic growth. And so goes the argument that government must be cautious which services it cuts in response to reduced revenues.

Ohio Lieutenant Governor Bruce Johnson today released a report from REMI Consulting, Inc. (RCI) detailing the economic impact of Governor Bob Taft’s tax reform plan. The study indicates that the plan will create more than 43,000 jobs and add $2.5 billion to Ohio’s Gross State Product by Fiscal Year 2010.

“We have been saying that this tax plan will help unleash Ohio’s economic potential, and this report clearly shows that it will,” said Johnson, who also serves as state development director. “Governor Taft’s tax reform proposal will help create 43,000 jobs and add more than $2 and half billion to Ohio’s economy over the next five years.”

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