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Politics is big in these parts, and we’ve got it covered. John Arthur Hutchison and other staff writers will offer their inside information on the events, big news and little moments of the local political scene in Lake, Geauga and eastern Cuyahoga counties.

Wednesday, March 31, 2010

Is Ohio's tax burden as high as people think?

The Ohio Department of Taxation passed along a news release today that I found interesting because I often hear people say that taxes are too high in Ohio and are driving people away from the state.

The gist is that Ohio's tax burden isn't as high as our neighboring states and most of the country, according to the state agency.

Of course most people, including me, don't enjoy paying taxes, but here's the information that was passed along, so judge it for yourself and take from it what you will:

New statistics from the U.S. Census Bureau show that the burden of state taxes is lower in Ohio than most other states, including all of Ohio’s neighbors.

That’s the conclusion of an analysis of census data by the Federation of Tax Administrators, the association of the nation’s state tax departments. According to the FTA analysis of data released last week, Ohio’s state tax burden during fiscal year 2009 was:

• 35th highest on a per capita basis. In other words, only 15 other states collected less in taxes per person than Ohio did last year.
• 33rd highest when measured as a percentage of Ohioans’ personal income. By this measure, only 17 other states collected a lower percentage of taxes than Ohio.

"These new figures bear out what we’ve been saying: Ohio is not a high tax state, certainly not where state taxes are concerned,” Ohio Tax Commissioner Richard A. Levin said. “That’s what these new census figures show."

In 2005, the state tax burden in Ohio was closer to the middle of the pack: 27th highest per capita and 28th highest when measured as a percentage of personal income, according to the FTA.

Ohio’s improved national ranking seems to reflect the impact of a package of tax reductions and reforms enacted in 2005 and gradually phased in during the past five years, Levin said.

The tax cuts include a 17 percent reduction in income tax rates and the elimination of two major business taxes on corporation profits and business property. The overall net savings to taxpayers: About $2.1 billion this fiscal year alone.
"By phasing out complex and antiquated business taxes, state leaders have eliminated barriers to investment and given businesses a new reason to consider creating jobs in Ohio," Levin said. "And these changes have certainly lowered the tax burden. This package of tax reductions was the largest in Ohio in at least 70 years."

-- John Arthur Hutchison
JHutchison@News-Herald.com

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