Plenty of tax­ing au­thor­i­ties seek your wal­let

The Columbus Dispatch - - Front Page -

As to­mor­row’s fil­ing dead­line nears, Amer­i­cans are cal­cu­lat­ing their 2017 fed­eral, state and lo­cal tax obli­ga­tions. And the con­ser­va­tive Tax Foun­da­tion ranks Ohio 27th among states in over­all tax bur­den.

In 2017, Amer­i­cans paid 31 per­cent of their in­come in taxes — $3.5 tril­lion in fed­eral taxes and $1.6 tril­lion in state and lo­cal taxes, for a to­tal of $5.1 tril­lion, the foun­da­tion re­ports.

On av­er­age, to­tal tax obli­ga­tions re­quired Amer­i­cans to work 113 days into the year — to April 23 (Tax Free­dom Day) — to sup­port gov­ern­ment at all lev­els, the foun­da­tion cal­cu­lates. Ohioans achieved their tax free­dom three days ear­lier.

In a big elec­tion year, vot­ers should be armed with some ba­sic facts about their state’s tax bur­den and how it com­pares with the rest of the na­tion.

Ohio steadily has re­duced state in­come tax rates while ex­pand­ing the state sales tax base. In the mid-1980s, Ohio’s top mar­ginal in­come tax rate ap­proached 9 per­cent. To­day, it’s un­der 5 per­cent — in the low-to-mod­er­ate range among the 43 states that im­pose a per­sonal in­come tax.

In per-capita per­sonal in­come tax col­lec­tions, the foun­da­tion ranks Ohio 36th in the na­tion at $703, com­pared with the na­tional av­er­age of $1,068. How­ever, Ohio is one of only 14 states that per­mit lo­cal gov­ern­ments to im­pose pay­roll taxes. The com­bined state-lo­cal in­come tax bur­den pushes Ohio up to 16th in the na­tion at $1,186 per capita, above the na­tional av­er­age of $1,144. Lo­cal in­come taxes are limited to 1 per­cent with­out a vote of the elec­torate.

In all, 616 Ohio mu­nic­i­pal­i­ties — 240 cities and 376 villages — levy in­come taxes rang­ing from 0.5 per­cent to 3 per­cent. In Colum­bus, it’s 2.5 per­cent.

Ohio also al­lows school dis­tricts to seek voter ap­proval of in­come taxes. Of Ohio’s 614 school dis­tricts, 190 have them, in­clud­ing three in Franklin County — Bex­ley and Canal Winch­ester at 0.75 per­cent and Reynolds­burg at 0.5 per­cent.

While re­duc­ing state in­come tax rates, Ohio’s leg­is­la­tors have been ex­pand­ing the state sales tax base to cover more ser­vices. From 1984 through 2015, state in­come tax col­lec­tions sur­passed sales tax col­lec­tions. No more. In 2017, the state col­lected $10.8 bil­lion in sales taxes com­pared to $7.9 bil­lion in in­come taxes. The state’s em­pha­sis on the sales tax is likely to con­tinue.

Since Septem­ber 2013, the state sales tax has been 5.75 per­cent. How­ever, the state al­lows coun­ties and tran­sit au­thor­i­ties to levy ad­di­tional sales taxes. All of Ohio’s 88 coun­ties do so. Franklin County com­mis­sion­ers im­pose a 1.25 per­cent sales tax. COTA col­lects a 0.5 per­cent sales tax; half is per­ma­nent, and half is a voted levy that ex­pires in 2026. In all, Franklin County’s 7.5 per­cent sales tax is sec­ond high­est in the state, be­hind Cuya­hoga County’s 8 per­cent levy.

Ohio’s ag­gres­sive push on sales taxes has el­e­vated the Buck­eye State’s av­er­age weighted state-lo­cal sales tax to 7.15 per­cent — 19th in the na­tion. This has sharp­ened the de­bate over the fair­ness of con­tin­ued ef­forts to slash the state in­come tax — Ohio’s only pro­gres­sive tax.

The state’s old­est tax, on prop­erty, dates to 1825 and is the pri­mary rev­enue source for schools and county-based hu­man ser­vices. Prop­erty taxes can­not be in­creased with­out a pub­lic vote. Ohio’s per-capita prop­erty-tax col­lec­tions, at $1,271, rank 28th in the na­tion, be­low the av­er­age of $1,518.

Bot­tom line: tar­gets for tax ire abound.

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