Earlier this year, Ohio’s General Assembly and Gov. Mike DeWine agreed upon a budget that, on its surface, seemed good for working and middle-class Ohioans.
The budget eliminated the state’s bottom two tax brackets below about $21,000 a year, increased the state’s Earned Income Tax Credit and took other measures to put money in non-wealthy Ohioans’ pockets. But it also slashed taxes for wealthy Ohioans and boosted the state’s gas tax while directing the state to collect sales taxes on online purchases — moves that will likely more than balance out the tax cuts for low-and-middle-income residents, according to a study by the Institute on Taxation and Economic Policy released yesterday by left-leaning think tank Policy Matters Ohio.
“Both the fuel tax increases and the online sales tax moves were needed – the first to provide badly needed revenue to bolster the transportation system and the second to level the playing field between online and brick-and-mortar retailers,” the study’s authors write. “However, the changes in both the gas tax and sales tax are regressive, falling more heavily on lower-income taxpayers. While needed steps, they illustrate the need for larger policies that will address the fairness of the Ohio tax system, including a refundable Earned Income Tax Credit.”
Currently, Ohio’s EITC gives tax credits on 10 percent of lower-income workers’ income. The state legislature upped that to 30 percent and got rid of a $20,000 cap on the EITC. But it also cut personal income taxes by four percent across the board and heaped on a 10.5 cent increase in gas taxes. Taken together with collection of online sales taxes, the moves mean that wealthy Ohioans will see a big cut, while lower-income Ohioans will actually pay ever so slightly more, according to ITEP’s analysis.
“The poorest fifth of tax filers, with income below $24,000 a year, will see an average tiny tax increase of $2, or 0.02% of income, while those in the top 1%, making $496,000 or more, will see an average annual cut of $746, or 0.06% of income,” the study says. “Middle-income tax filers who make between $42,000 and $63,000 a year will average a $93-a-year increase, or 0.18% of their income.”
In between these levels, upper-middle class earners do pay more under the plan. Those making between $63,000 and $101,000 will pay $93 a year more on average, while those making between $102,000 and $208,000 will pay $112 more a year on average. Above those levels, however, wealthy taxpayers reap savings. Below them, taxpayers will pay more.
This article appears in Aug 7-13, 2019.
And, lower income property owners wont see any tax savings either thanks to the ma$$ive property tax increases from late last year!!!
Once again, until crooks like thief Budish are finally recalled from office and sent to jail, nothing will likely ever change around here except paying more and more and more to our thieving politicians!!!
A single person making 24000 a year will pay $190 dollars a year in state income tax. So yes, their income tax reduction is going to be minimal. It’s hard to reduce something that is already so small.
Not complaining, they should not pay more. But it seems kind of silly to point out that they are not getting a cut when there is nothing to cut.
Considering how big the gas tax increase is I think it’s pretty awesome they are only getting hit for 2 bucks. Basically they are not getting an increase at all even with the large gas tax increase.
Seems like the poor were taken care of decently (as they should be) despite the incomplete and misleading analysis in the article.