Tax day is fast approaching and what better timing to discuss Ohio's wonky tax situation? 🥴
According to a recent report, the Buckeye state has the 15th most unequal tax system in the U.S. 🙈 The poorest residents pay a greater percentage of their income to state and local taxes than the richest. 💸
Here’s Five Fast Facts on the current Ohio tax system:
- 💰 Robin Hood Vibes - The report revealed that Ohio's poorest 20% of households give roughly 12% of their income to state and local taxes. Contrast that to the richest 1% of households who pay only 6% of theirs.
- 🛒 Bare Necessities - Much of Ohio's tax revenue is raised through taxes on purchases, like clothing, gas, and utilities. Another big chunk comes from property taxes. A lot of the inequality is due to the fact that these taxes are the same for everyone, regardless of their income levels.
- 🧘 Better Balance - To try to offset this inequality, Ohio has a progressive income tax structure in place, where the richest households pay the highest amounts. However, it's not that progressive. Critics say it's not enough of an offset to balance out sales and property tax inequalities.
- 🤷🏽♀️ Mixed Reviews - Republicans in the Ohio House and Senate proposed a plan to gradually phase out the state income tax. They say that it would make the state more attractive and draw in more new residents and businesses. However, those against the proposal look at other states who have done the same, arguing it hasn't made that much of a difference in terms of positive growth.
- ✅ Finding an Answer - How can we smooth things out? Critics of Ohio's tax system say a less regressive tax code and higher taxes on the rich would help a ton. Another way to help offset the inequality would be to offer more refundable tax credits for expensive needs like childcare.
🔥Bottom line: Depending on which side of the aisle you're on, your opinions on how Ohio should handle their tax issues may vary. However, if the poor keep getting poorer, it's bad news for everyone. The gap between the rich and the poor stinks enough. 🙊
What's your take on Ohio's tax system?
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