Guest columnist Charlie Earl is a teacher, small-time farmer and former member of the Ohio General Assembly. He is a member of the Libertarian Party of Ohio and writes in favor of repealing Ohio's income tax.



It's axiomatic that what you tax, you get less of. This is why the State of Ohio slaps a $1.25 tax on every pack of cigarettes. It works. This is, in part, why smoking rates in the US have been cut in half since 1965. But if it works on things we want less of – like smoking – it also works on things we want more of – like wages.

Since 1972, Ohio has levied a tax against personal income on revenues earned within the state. For 2013, those rates ranged from a rate just above 0.5% for income up to $5200 to about 5.5% on incomes above $208,500. The Ohio personal income tax brings into state coffers about $8 billion.

The graduated personal income tax has long been popular, because it is seen as placing the greater burden on those better able to pay, and because there is a perception that wealthier people should "pay their fair share." But these perceptions miss the unintended consequences of taxation.

Thousands of small businesses are sole proprietorships, meaning that the business owner pays taxes on his or her business profits as individual income. If we eliminate this tax, the business owner has that money to invest in the business, purchase equipment, and hire employees. This would make Ohio a more attractive place for sole proprietors to relocate, but even more, could encourage more Ohioans to take the step to become entrepreneurs. Big business has been cutting employment for decades. Small businesses are now the sole engine of private sector job growth.

Eliminating this tax could also draw more people to move to Ohio and more Ohioans to stay here. This translates to more customers for Ohio businesses and more people paying sales and property taxes to support state and local governments.

But to Libertarians, eliminating one form of taxation is only part of the answer. While cutting personal income tax rates, Gov. John Kasich and his Republican supporters in the legislature have done little to cut the cost of state government. Instead, they have sought to raise other taxes and transferred a greater part of the tax burden to local governments.

As a rule, states that get by without a personal income tax just spend less per resident than states that don't. And that's a good thing. At every level, government should limit itself to essential functions like policing and the court system and stay out of areas where it doesn't belong.

If Ohio government gets leaner, if it closes out cronyism projects like the governor's Jobs Ohio scheme, if it does only what it is required to do, Libertarians are confident that the state personal income tax can be reduced over time until it disappears, without adding to the tax burden elsewhere. The benefits will include government that is better because it's leaner, a better climate for job creation and retention, and a better future for Ohio's people.