Democrat Dee Gillis is campaigning to replace Bill Beagle as senator for Ohio’s District 5. (This district covers most of Dayton and all of Preble County.)

Beagle is bragging in his TV ads that he voted with the Republican majority to reduce taxes by over $3 billion each year.

Gillis needs to respond to Beagle’s boast of reducing taxes. She needs to challenge Beagle to a debate about taxes. She should make these three points:Screen Shot 2014-10-09 at 12.04.22 PM

  1. In order to reduce taxes at the state level the Republicans cut funding to local schools and local governments. These reductions have forced local communities to increase local property and local income taxes.Screen Shot 2014-10-09 at 12.10.52 PM
  2. The across-the-board reduction in state income taxes, combined with an increase in sales tax and increases in local property taxes has changed the shape of Ohio’s tax system — making it less progressive, more flat, less fair.
  3. If the last $3 billion in cuts each year to Ohio’s income tax had been made so that the progressivity of the system was not altered, each taxpayer would have received the same amount of reduction — about $750 each year.

Gillis should answer Beagle’s boast of cutting taxes by raising the question of tax fairness and tax purpose.  If income tax revenue is reduced by $3 billion, what is the most fair way to return this money to taxpayers?

Under Beagle’s $3 billion tax reduction plan, higher incomes got thousands of dollars of tax reduction each year and lower incomes got almost no tax reduction each year. Reducing the tax obligation of each taxpayer by the same amount maintains the progressively of the system. The first graph illustrates how total taxes could be reduced by 50%, without changing the progressivity of the system. As I figure it, $3 billion equally divided among Ohio taxpayers would have amounted to about $750 each year for each taxpayer. This reduction would have resulted in thousands of Ohioans, who now pay Ohio income tax, having zero Ohio income tax obligation.

The $3 billion in tax cuts Beagle is bragging about were made by reducing all income tax brackets by the same percentage. Ohio’s income tax structure is progressive so this “across the board” tax cut makes the progressively less steep, more flat. To illustrate, in the second graph the blue line shows a progressive tax system and the green line shows a 50%  “across the board” reduction in that system. Note that the green line is less steep, more flat than the blue line. The yellow line shows an 80%  “across the board” cut to that system. The more reduction, the flatter the system becomes. Note that the yellow line, showing a whopping 80% reduction, is almost completely flat.

At one time there was wide-spread agreement that to make taxes more fair, higher incomes should be taxed at a higher rate than the rate paid by lower incomes. I think there would be wide public support for the point of view that any future changes made to Ohio’s tax structure should be changes that either maintains or improves the progressivity of Ohio’s tax structure. Gillis should raise the issue of tax fairness and should challenge Beagle to a debate on the question: “Ohio’s system of taxation should be made more progressive.”

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