Were the GOP-run General Assembly to boost the state sales tax rate to 6.25 percent, that, plus county and transit piggyback taxes, would make Montgomery County’s overall sales tax rate 7.75 percent. In other Miami Valley counties, the new, higher sales tax rate would be 7.75 percent in Clark and Preble counties; 7.5 percent in Miami County; 7.25 percent in Greene and Warren counties; and 7 percent in Butler County.
Sales taxes favor well-off Ohioans at the expense of low- and middle-income Ohioans, because the latter spend a bigger percentage of their incomes on necessities. With the income tax, you don’t pay if you never got. With a sales tax, you have to pay. Period.
True, the 2017-18 budget Kasich proposed last week would increase the number of low-income Ohioans who won’t have to pay state income tax. Still, suspicious minds might think a steeper sales tax rate is aimed at covering the cost (to the state treasury) of income tax cuts for big shots.
According to budget documents, the state collected $10.3 billion in sales tax for the year that ended last June 30; meanwhile, it collected $7.8 billion in personal income tax. For the year that’ll end June 30, 2019, Kasich’s proposed budget estimates the state will collect about $11.55 billion in sales taxes – and about $6.76 billion in personal income tax. Translation: Sales tax collections would rise 12.1 percent; income tax collections would fall 13.3 percent.
The governor has argued in so many words that income-tax cuts spur business investment in Ohio. And the state does confront long-term economic challenges: Ohio’s median household income ($49,429) is 8.3 percent less than the nation’s ($53,889).
The income tax has long conflicted Ohio Republicans. It was a GOP-run General Assembly that agreed to pass Ohio’s income tax in 1971, at the behest of Democratic Gov. John J. Gilligan. Among 13 House Republicans who voted “yes” in 1971 on the income-tax were then-Speaker Charles F. Kurfess, of suburban Toledo, and future Minority Leader Corwin M. Nixon, of Lebanon. Among six Senate Republicans voting “yes” were future Senate President Stanley J. Aronoff, of Cincinnati.
Voters, given the chance by a statewide November 1972 ballot initiative to repeal the income tax, refused; only 31 percent of those voting backed repeal. And when Republican James A. Rhodes returned to the governorship in 1975, he didn’t lift a finger to get rid of the income tax.
Legislators passed the sales tax in 1934 (rate: 3 percent) when the state and local governments were going broke because of the Depression and a 1933 voter-initiated ballot issue capping unvoted property taxes at 10 mills (a cap backed by farmers and real-estate boards, one scholar wrote.)
The 1934 sales-tax bill’s title said the tax was “for the purposes of emergency poor relief, of affording the advantages of a free education to all the youth of the state … and” – as virtually every Ohio mayor and county commissioner can tell you – “for the support of local governmental activities.”
What the sales-tax bill’s title didn’t mention was subsidizing tax cuts to make life cushier for Ohio’s well-off. Got that, Republican “originalists?”
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