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1 Mark Robyn & Rob Shrum, Wishful Thinking about Tax Burdens in Ohio 1 (2010)

handle is hein.taxfoundation/ffccaxz0001 and id is 1 raw text is: FISCAL FOUNDATIONFC April 7, 2010 No. 220 FC Wishful Thinking About Tax Burdens in Ohio by Mark Robyn and Rob Shrum Richard Levin, Ohio's top revenue official, continues to cheerlead for the state's broken tax system, as covered by the Urbana Daily Citizen,' the Lancaster Eagle Gazette,2 and the Akron Beacon Journal.3 Levin's pronouncement late last month that Ohio is not a high-tax state would normally be dismissed as an April Fool's Day joke, but he tries to add weight to his claim by citing a report by the Federation of Tax Administrators (FTA). Levin says the numbers show that Ohio has a middle-of-the-road tax burden, but he is misconstruing Census data and consequently comes to an incorrect conclusion. Levin's Numbers from the FTA Are Just State Tax Collections Divided by Population, Which Is Not a Burden Measure and Should Not Be Used to Compare States The Federation of Tax Administrators' (FTA) analysis utilizes state tax collections data and population data from the US Census Bureau, and personal income data from the Bureau of Economic Analysis. Dividing total state tax collections by population and personal income yields the two measures in the FTA's study: taxes per person and taxes as a percent of income. These calculations show that Ohio's state tax collections are 35th highest on a per capita basis, and 33rd highest when measured as a percentage of Ohioans' personal income. On the surface this type of analysis seems cut and dry, but the numbers are easy to misinterpret. The FTA analysis of Census data used by Levin compares only state tax collections and not state and local tax collections, resulting in an apples-and-oranges comparison due to states having varying levels of local tax powers. (Ohio has high local tax collections.) Census itself warns that 1 http://www.urbanacitizen.com/main.asp?SectionlD-3&SubSectionl D-5&Articlel D- 153548 2 http://www.lancastereaglegazette.com/article/20100401 /NEWSO 1/4010304 ' http://www.ohio.com/business/89894102.html Mark Robyn is Staff Economist and Rob Shrum is Manager, Development and State Affairs, at the Tax Foundation.

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