Budget & Tax

What Oklahoma could learn from Ohio’s tax-cut experience

April 21, 2025

Curtis Shelton

Ohio’s experience with personal income-tax cuts gives us a glimpse of what could have happened in Oklahoma had Oklahoma not stalled out on its income-tax journey. 

In 2003, Ohio had a top personal income-tax rate of 7.5 percent. Over the next two decades, that rate dropped to 3.5 percent. 

Sources: Ohio Annual Comprehensive Financial Report; Federal Reserve Bank of St. Louis; CPI Inflation Calculator 

As the graphs show, Ohio began reducing its income tax rate in 2006, just before the Great Recession, bringing the top rate down from 7.5 percent to 5.92 percent in 2009. Like most states, Ohio saw a decline in state revenue for a few years after the recession began and decided to pause the rate reductions. The rate reductions began again with consistency in 2013, bringing the rate down to 4.8 percent before Covid. This was very similar to Oklahoma’s experience of bringing the rate from 7 percent to 4.75 percent over a two-decade span. 

Unlike Oklahoma, however, Ohio used the rapid rise in revenue to continue the tax cuts after the pandemic, further reducing the income tax rate to 3.5 percent in 2024.

Overall, Ohio cut its personal income-tax rate by 53 percent and saw state revenues grow by 10.2 percent when adjusting for inflation and population growth.