And thanks to five "Republican" State Senators, we just raised our taxes during a recession! Thanks "Republican" Senators for looking out for us!!!
From 1993-2008, Ohio Lost 231,000 Taxpayers, $19 Billion in Adjusted Gross Income
Washington, DC, January 7, 2010 – While Ohio lawmakers found a temporary fix for the state’s budget shortfall by suspending a scheduled 4.2 percent income tax cut, unless they enact permanent reforms to improve the state’s tax system, the out-migration and revenue loss that has plagued the state in recent years can be expected to continue, according a new Tax Foundation report.
Between 1993 and 2008, the state lost 231,000 taxpayers, more than 105,000 of whom left within the past five years. The state lost $19 billion in adjusted gross income (AGI) from 1993 to 2008.
“Ohio legislators may have put a band-aid over the state’s budget problems, but the more serious ailment remains: Ohio’s tax structure is hostile to business,” said Tax Foundation President Scott Hodge, who authored the report, “Ohio’s Poor Tax Climate at the Heart of the State’s Economic and Fiscal Woes.” The study is No. 207 in the Tax Foundation Fiscal Fact series and is available online at http://www.taxfoundation.org/publications/show/25674.html.
“Ohio’s high tax burden and unfriendly tax environment for business has continued to erode the state’s tax base and shrink its economy,” Hodge said.
Ohio has the seventh-highest state and local tax burden in the country, with taxes having consumed 10.4 percent of the state’s income in 2008 – higher than any of its neighbors. The state also has one of the worst business tax climates in the nation, ranking 47th in the Tax Foundation’s 2010 State Business Tax Climate Index.
Although Ohio has nearly phased out its corporate franchise tax in favor of a commercial activity tax (CAT), the latter is a particularly harmful type of gross receipts tax that results in what economists call “tax pyramiding” because it applies to all transactions, including business-to-business purchases of supplies and other materials.
The state’s top individual income tax rate of 5.925 percent is about average nationally and regionally, but Ohio’s local income taxes are unusually high. All of Ohio’s neighbors except Indiana have lower combined state and local sales tax rates than Ohio’s 6.83 percent average rate. In addition, Ohio’s sales tax applies to many business-to-business activities, which increases the cost of doing business in the state.
While Ohio’s property taxes are a relatively modest $1,165 per capita, the state undermines its growth potential by being one of 22 states with a capital stock tax (levied on the wealth of a corporation) and one of only 10 states with an intangible property tax (imposed on things such as stocks, bonds and even trademarks). Ohio also imposes its own estate tax, with a low $338,000 threshold.
“It is clear that without sensible reforms soon, economic growth opportunities will pass by Ohio and the state’s finances will continue to worsen,” Hodge said. “Cutting the state’s tax burden and implementing pro-growth tax reforms can go a long way toward reversing these dismal trends.”
The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.
Tax Foundation Fiscal Fact No. 207, “Ohio’s Poor Tax Climate at the Heart of the State’s Economic and Fiscal Woes,” is available online at http://www.taxfoundation.org/publications/show/25674.html. To schedule an interview, please contact Natasha Altamirano, the Tax Foundation’s Manager of Media Relations, at (202) 464-5102 or firstname.lastname@example.org.
Friday, January 08, 2010
Ohio’s High Tax Burden, Poor Business Tax Climate Hurting Economy