Wednesday, September 20, 2006
ABJ Finds State Tax Debate Often Misses the Point
A recent article in the Akron Beacon Journal was followed by an editorial today that reinforces points that my colleague Dr. David Ellis often makes, Ohio doesn't have the 3rd highest tax burden (that phony ranking comes from the discredited Tax Foundation), that if their is any correlation between tax burden and state wealth it's that higher tax states tend to have higher income levels, and finally the difference between states in terms of tax burden continues to shrink. The ABJ points out for instance the the dollar difference between the 20th and 27th state on U.S. Census bureau rankings is only $300. If anything is driving up Ohio's overall tax burden its the rapid growth in local taxes and that is the result of two decades of the federal and state government pushing responsibilities onto local governments and communities.
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It's evident you learned nothing (if you ever took the course) from economics 101. The Census Bureau rankings are legal incidence of taxation. The Tax Foundation measures economic incidence. Who the law says must bear the burden of a tax is not the same as who actually pays the tax. For example, the employer portion of payroll taxes are borne mostly be the workers, not the companies, although the law says that the employer bears the burden.
Even liberal groups at the national level like Brookings or Citizens for Tax Justice do economic incidence analysis of tax policy. So essentially Census Bureau data could refute their work as well.
Even liberal groups at the national level like Brookings or Citizens for Tax Justice do economic incidence analysis of tax policy. So essentially Census Bureau data could refute their work as well.
# posted by 
: 11:48 AM
: 11:48 AM
Actually I took Economics 101 and 102 at Ohio University (the home of infamous tax foe Richard Vedder). I would actually question whether the Tax Foundation correctly measures economic incidence. Of course I am not the only one to raise questions about their credibility. The current tax commissioner for the State of Ohio has leveled some of the same criticism I have. I am not aware of Brookings or Citizens for Tax Justice doing rankings of various states. I still believe that the U.S. Census rankings are probably the fairest ones out there in terms of tax burden and are free of political agendas. Thanks for reading our blog!
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