Proposed Capital Gains Tax Cuts Would Enrich Ohio’s Wealthiest

COLUMBUS, OH — State lawmakers are considering a bill that would completely eliminate the capital gains tax, even though most working Ohioans do not hold investments large enough to benefit from it. 

Capital gains are a passive form of income that is realized when someone sells an asset. The more wealth a person holds in stocks, investment properties or business interests, the more capital gains they can generate. House Bill 617, currently before the House Ways and Means Committee, would drain hundreds of millions of dollars from services most people use every day, according to a new policy brief from the Innovation Ohio Education Fund. 

“Most Ohioans are living off an hourly wage or an annual salary, and if we’re lucky, we can set a little something aside for retirement and to buy a house,” said Innovation Ohio Education Fund President Michael McGovern. “Our lawmakers should be fighting for better wages and lower costs for all of us. Changing the capital gains tax is just a way to help the richest Ohioans get even richer on our backs.”

The Ohio Legislative Services Commission estimates that H.B. 617 would cost Ohio as much as $646 million in 2027 and $680 million in 2028 and would cut funding for 146 school districts that levy an income tax, with no replacement funding. That means Ohio lawmakers would have to make cuts to services and programs that benefit everyone – like public schools, libraries, workforce programs, or public safety. 

While the harm would be felt widely, analysis shows that benefits are narrow. People who make more than $200,000 a year would pocket about 82% of the capital gains tax cut. Ohioans with the incomes in the top 1% – families living on more than $754,000 a year – would get an average of $6,000. Families in the bottom 60% would get an average of just $12. 

“It’s the work of everyday Ohioans that drive our state’s economy,” said McGovern. “The least we can expect is for our elected officials not to hand the wealthy another tax break so we all can educate our kids and provide a good home for our families.”