Ohio taxes less than most other states, census shows

“These new figures bear out what we’ve been saying: Ohio is not a high-tax state, certainly not where state taxes are concerned,” Ohio Tax Commissioner Richard A. Levin said.

The issue of taxes is expected to be a major point of debate in the upcoming governor and state legislative races. A number of House Republicans and Gov. Ted Strickland’s challenger, Republican John Kasich, want to eliminate the state income tax, which Democrats say will devastate funding for schools and social-service programs.

Republicans say dropping the tax would spur economic growth and keep seniors with retirement incomes from leaving Ohio.

Republicans are expected to attack Strickland and legislative Democrats for fixing a budget shortfall by delaying a 4.2 percent income tax cut that was to take effect in January 2009.

The state’s ranking has remained steady for the past four years. Ohio hit its high-tax point this decade in 2004, ranking 24th in per-capita tax collections after Republicans approved a penny sales-tax hike a year earlier.

But Republicans in 2005 approved an aggressive tax overhaul, which has so far included a 17 percent income tax cut, elimination of the corporate franchise tax and taxes on equipment and inventory, and a new gross receipts tax on businesses.

Strickland has largely embraced the tax changes.

Ohio’s local taxes are generally higher than other states’, so when they are tossed into the mix, Ohio’s total collections rank more in the middle of the pack. Local figures were last compiled for 2007.

Kasich points to the conservative Tax Foundation, which says Ohio has the nation’s seventh-highest tax burden.

“This study only shows a piece of the picture as it looks only at taxes collected and not taxes paid,” Kasich spokesman Rob Nichols said of the census numbers. “But regardless of what they say, Ted Strickland doesn’t think Ohioans’ taxes are too high and John Kasich does. We’re content to let the voters decide who’s right.”

Levin has been sharply critical of Tax Foundation numbers, noting the group called for the repeal of two taxes in Ohio that no longer exist in any meaningful way.

“We have some very experienced people. I don’t know anyone here who knows how to replicate what the Tax Foundation is doing,” said John Kohlstrand, tax department spokesman.