Wednesday, May 31, 2006
New State and Local Tax Rankings Slightly Lower forOhio
Despite the rhetoric about Ohio’s tax rankings increasing, data made available by the U.S. Census Bureau Wednesday shows Ohio’s tax ranking actually dropped on a number of key measures compared to 2001-2002 when the data was last published.
In 2003-2004, Ohio ranked 20th in state and local taxes per capita. By comparison, Ohio ranked 18th in 2001- 2002. When controlling for personal income, Ohio’s state and local tax burden in 2003-2004 was 11th. By comparison, Ohio ranked 8th in 2001-2002.
On the broader measure of state and local own source revenue, Ohio ranked 21st in 2003-2004 when controlling for population. By comparison, Ohio ranked 19th in 2001-2002. When controlling for personal income, Ohio ranked 19th in 2003-2004 in state and local own source revenue. By comparison Ohio ranked 17th in 2001-2002.
The census data are the most commonly used sources data for comparing state and local tax burdens by public finance analysts.
When considering tax rankings there are a couple of things worthy of note. First, taxes paid also reflect the cost of services demanded by citizens. Second, while Ohio’s rank is higher than in prior decades, the difference between the highest taxed state and the lowest taxed state is getting smaller or converging. Consequently, there is less for states to compete over in the tax code. Finally, stronger economies have higher levels of taxation. Therefore, the notion that tax levels is harming Ohio’s economy are unsubstantiated, and therefore, incorrect.
In 2003-2004, Ohio ranked 20th in state and local taxes per capita. By comparison, Ohio ranked 18th in 2001- 2002. When controlling for personal income, Ohio’s state and local tax burden in 2003-2004 was 11th. By comparison, Ohio ranked 8th in 2001-2002.
On the broader measure of state and local own source revenue, Ohio ranked 21st in 2003-2004 when controlling for population. By comparison, Ohio ranked 19th in 2001-2002. When controlling for personal income, Ohio ranked 19th in 2003-2004 in state and local own source revenue. By comparison Ohio ranked 17th in 2001-2002.
The census data are the most commonly used sources data for comparing state and local tax burdens by public finance analysts.
When considering tax rankings there are a couple of things worthy of note. First, taxes paid also reflect the cost of services demanded by citizens. Second, while Ohio’s rank is higher than in prior decades, the difference between the highest taxed state and the lowest taxed state is getting smaller or converging. Consequently, there is less for states to compete over in the tax code. Finally, stronger economies have higher levels of taxation. Therefore, the notion that tax levels is harming Ohio’s economy are unsubstantiated, and therefore, incorrect.
