January 12, 2021

Policy Matters Ohio: Ohio Needs a Corporate Profits Tax

ITEP Work in Action

Moreover, the 2017 federal tax law has put more money in the pockets of many Ohio business owners. The Tax Cuts and Jobs Act, slashed corporate taxes and provided a big new tax break for owners of partnerships, S Corporations and other businesses known as “passthrough entities” because their profits are taxed under the individual income tax as they pass through to the owners. The Institute on Taxation and Economic Policy (ITEP), a national nonprofit with a sophisticated model of state and federal tax systems, analyzed the law and found that in 2018, Ohio shareholders got the bulk of $2.5 billion in corporate tax cuts from the law. In addition, passthrough owners saw U.S personal income tax reductions worth more than $1.2 billion.

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