Taxes played a central role in last night’s presidential debate, as Hillary Clinton and Donald Trump presented contrasting visions for U.S. economic policy. The candidates mentioned taxes over 40 times throughout the...
- The Tax Policy Blog
- Ohio Revenue Commissioner Slams Tax Foundation for Critic...
Ohio Revenue Commissioner Slams Tax Foundation for Criticizing State's Gross Receipts Tax
Former Ohio Revenue Commissioner Richard A. Levin slams the Tax Foundation for criticizing the terrible Commercial Activities Tax (CAT), a gross receipts tax that Levin himself helped usher in. Economists of all stripes agree that gross receipts taxes, while deceptively simple and low, actually introduce severe economic distortions and result in significantly different effective tax rates on similar or even identical products.
But Levin also says the Tax Foundation is wrong to criticize Ohio for its franchise and intangibles taxes, both of which he says don't exist. (He even equates them to unicorns and pixie dust). The franchise tax (with a rate of 4 mills, distinct from the corporate income tax) has indeed been repealed, but only very recently (January 2010). Our State Business Tax Climate Index, which comes out each fall, will reflect this repeal in our 2011 report.
As for the intangibles tax, it is alive and well. Levin should know, as he was the named defendant in a case involving the tax that went all the way to the Ohio Supreme Court in 2008, UBS Financial Services v. Levin. For a tax that Levin says was repealed in 1985, it seems to still be imposing significant costs on companies doing business in intangibles. I hope Levin lets UBS know that they don't need to pay that tax after all.
What really matters, though, is that state officials have long engaged in a propaganda effort to claim that Ohio's tax system is low and attractive despite significant evidence to the contrary. (Levin notes that he "sense[s] genuine excitement...about our new state tax system.") In reality, Ohio taxpayers are burdened with the 7th highest state-local tax burden in the United States. Our review of state tax structures finds theirs to be the 47th least business-friendly in the United States. Few impartial experts think that Ohio will see much in the way of job growth or capital formation without serious reform.
And it needs to be reform that leads to lower tax burdens and less economic distortions, not the "reforms" of the CAT that go in the opposite direction.
Get Email Updates from the Tax Foundation
Join the Tax Foundation's fight for sound tax policy Go
About the Tax Policy Blog
The Tax Policy Blog is the official blog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.
Recent Blog Posts
Related State Articles
- Lunch Links: Under Amour Wants Baltimore to Finance Transformation of Area to House New Headquarters; Wisconsin Governor, Fellow Republicans in Legislature Announce Tax Reform Proposals; New Tax Foundation Tool to Compare Congressional Tax Plans
- Lunch Links: Republican Plan Upcoming for Sales Tax on Internet Buys; Walmart Avoids Excessive Tax Proposed by Puerto Rico; Explaining Why States Should Index Tax Brackets for Inflation
- Lunch Links: Pairing Trump Tax Breaks Together Ill-advised; Carbon Tax an Issue in Vermont Governor's Race; Soft Serve in Many Splendid Tax Forms
- 1 of 40
- next ›