Tax Law

Red Alert! Sales Taxes on the Rise

Before the bell rang on September 1st launching Ohio's 0.25 percent sales tax hike, the pending increase was a mere abstraction. But this harsh reality became palpable: One of the monthly payments I mailed out prompted a friendly reminder from the local business I patronize to send in another 41 cents.  It occurred to me that many citizens of the Buckeye State may never really become aware of this small adjustment, which only begins to mitigate reduced federal largesse, as well as Ohio's reduced income tax rates.

Like it or not, the die is cast on state and local tax policy, at least in Ohio:

  • Lower income taxes, combined with higher sales taxes = a more regressive tax policy.

Whether or not this trend is fair, the changing dynamic will likely escape public attention, at least in the long run. 

But note - State legislators conduct business in Franklin County, whose commissioners have hatched plans to enrich county coffers with a 0.5 percent tax increase to be effective January 1st. As reported by The Columbus Dispatch, two themes are paramount:

  1. The commissioners' plans are grounded in intentions to fill substantive needs for improved infrastructure, projects, and social services.
  2. The commissioners' plans call for half of the 0.5 percent county sales tax increase (i.e., 0.25 percent) to expire in five years.

I would place my bets on principle #1. Indeed, the goals and objectives outlined have real merit.

I'm staying away, however, from betting on principle #2. If the tax does expire, there's always a way to reinstate it - or even to introduce a bigger tax.  There will always be compelling needs for public funding in urban areas; such needs will never truly expire.

So, when January rolls around, I can look forward to sending my friendly vendor an extra 0.75 percent (0.25% state + 0.5% Franklin County).  This means I'll need to fasten my seat belt and budget for an extra $1.23 per month, which will total an extra $14.76 in 2014.

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