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There's more to story on taxes
(by Dave Lange - June 22, 2011)
COUNTY LINE, BY DAVE LANGE
There's more to story on taxes
Ohio Gov. John Kasich has scored a lot of points since he began his campaign for the state's highest office many moons ago, and he has continued to do so since his election last November by claiming that we are overtaxed. He, like many others of the anti-tax persuasion, have argued that Ohio's heavy tax burden has driven countless corporations and many thousands of jobs to other states.
The point has been well-taken, but it's running out of gas.
In fact, "Politifact Ohio," a well-researched project of Cleveland's daily newspaper that verifies or discredits claims made by various politicos, recently caught Mr. Kasich in a gross falsehood regarding the tax burden on Ohioans. The governor cited dated data from the Tax Foundation in claiming that Ohio has the seventh-highest tax burden among the 50 states. Actually, the Tax Foundation's latest report shows Ohio's state and local taxes being the 18th highest in the country, and indications are that we haven't been as high as seventh since 2005.
But that's only part of the story.
The main reason that Ohio is closer to the middle of the pack is that the state slashed income taxes by 21 percent in 2005. According to Policy Matters Ohio, two-thirds of those cuts went to the richest 20 percent of households in the state. The result, according to the Institute on Taxation and Economic Policy, is that the poorest fifth of Ohio households pay 12 percent of their incomes in state and local taxes, while the richest 1 percent pay just 6.4 percent of their incomes to support state and local government.
So guess who's winning this class warfare.
The 2005 state tax cuts resulted in $10 billion of lost revenue over the past five years, most of it stashed in the pockets of Ohio's wealthiest citizens. While they're laughing all the way to the bank, Mr. Kasich and his legislative allies intend to balance the budget on the back of local services, including the public schools, for the middle and lower classes. And he's warning local governmental entities, including school boards, not to ask voters for tax increases in their attempts to offset the state raid.
But that's still not the whole story.
One reason that taxes remain higher in Ohio than most other states is that, for many years, its residents paid much more to the federal government than they got in return. That has been changing, according to the Tax Foundation, which reported that Ohio now receives $1.05 back for each $1 it pays to Washington. But 30 of the 50 states get more than that.
The top 10 states in fattening themselves on pork from the federal government are: New Mexico, $2.03 for each $1 paid; Mississippi, $2.02; Alaska, $1.84; Louisiana, $1.78; West Virginia, $1.76; North Dakota, $1.68; Alabama, $1.66; South Dakota, $1.53; Kentucky, $1.51; and Virginia, $1.51. Four of them have higher median incomes than Ohio.
The 10 states receiving the least from Washington are: New Jersey, 61 cents for each $1 paid; Nevada, 65 cents; Connecticut, 69 cents; New Hampshire, 71 cents; Minnesota, 72 cents; Illinois, 75 cents; Delaware, 77 cents; California, 78 cents; New York, 79 cents; and Colorado, 81 cents.
All 10 of those states voted Democrat in the last presidential election. Eight of the 10 states getting the most in federal tax handouts voted Republican. That's a story of hypocrisy that isn't being reported.
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