Through decades of laws and policy decisions, Washington’s elected leaders have created a tax code that is the most upsidedown, or regressive, in the nation, meaning that those with low incomes pay a much higher share of their income in taxes compared to the wealthiest. In other words, Washington’s tax policies favor certain people based on their income and wealth, while continuing to hold low- and middle-income people back.
This brief addresses the question: How and to what extent does a person’s race and ethnicity determine how Washington’s upside-down tax code impacts them?
Tens of thousands of upper-income Ohioans are qualifying for tax credits that seemingly are limited to those who have much lower incomes. It’s all legal – and it’s probably costing the state millions of dollars a year.
Not only does Ohio’s state and local tax system fail to produce enough revenue to properly fund schools, child care, transit and more, it’s upside down. In 2018, low-income Ohioans pay almost twice the share of their income in such taxes as the state’s most affluent do. Ohio ranks 13th worst in the nation in terms of state and local tax unfairness.
Property tax abatements caused 180 school districts across Ohio to forgo $125.6 million in revenue, according to financial reports the districts issued covering the 2017 fiscal year. With $43.8 million, or a little more than a third of that amount, schools across the state could refill the positions of 662 librarians whose positions were eliminated between the 2005-2006 school year and 2016-2017.[1] That demonstrates that while the forgone revenue from tax abatement is relatively small compared to total K-12 spending, it’s still quite meaningful.