Paying too much tax? Go figure


First Posted: 1/16/2015

A report by the Institute on Taxation and Economic Policy is a classic example of how an organization can string together numbers to support any argument it chooses.

Granted, that doesn’t necessarily mean such an argument is invalid or wrong. It is just a reminder about that classic old saying: “Figures don’t lie, but liars figure.”

An analysis of income data by the Institute on Taxation and Economic Policy reported this week that lower-income citizens are paying a higher percentage of their income in state taxes than the wealthier do. It’s especially bad in Ohio, which ranks as the 18th worst state for inequality, according to the report.

The study covered tax changes in the states through 2014. It found that under nearly every state tax system, wealthier families pay a smaller percentage of their income in taxes than the lowest 80 percent of earners do. It also noted that the top 1 percent of income earners in Ohio — those making more than $356,000 — spend 5.5 percent of their income on state and local taxes. Meanwhile, those in the middle 60 percent of income, earning $18,000 to $82,000, pay on average 10.2 percent.

So, there we go. The Average Joe is getting the shaft in the Buckeye state.

But before arriving at the conclusion, consider another number: 75 percent of tax revenue comes from the wallets of the wealthiest Americans.

Also, consider this about four of the states ranked in the Top 10 for tax inequality by the Tax Institute: They are ranked among the 10 best for tax climates for job creation and businesses by another organization, the Tax Foundation.

When it comes to throwing around numbers in regards to taxes, there is likely only one thing in which the rich and poor will agree. They’ll both tell you they are overtaxed.

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