When the United States adopted an income tax in 1913, a major purpose was to make the system progressive and ease growing inequality. More than a century on, Ohio’s system of taxation is having the opposite effect — it’s taxing poor residents much more heavily than the rich and driving further inequality, according to a report released this month.
In fact, Ohio has the 15th-most unequal system of taxation, according to the Institute for Taxation and Economic Policy’s 7th annual analysis, “Who Pays?”
The Buckeye State also has the dubious distinction of having the 12th-highest state and local tax rate — 12.7% — for the poorest 20% of households, the report said. That was more than double the rate — 6.3% — paid by the 1% of households with the highest incomes in Ohio. Additionally, the poorest 80% of households paid at least 10% in state and local taxes, which means the bulk of Ohioans face significantly heavier burdens than their richest neighbors.
Ohioans are hardly alone. The Institute for Taxation and Economic Policy report said that in 41 states, the highest 1% are taxed at lower rates than everyone else and that 34 — including Ohio — tax the bottom 20% at a higher rate than any other income group.
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Not only do low and middle-income households pay more of state and local taxes as a share of their own income, nationally they also pay more in terms of their share of their states’ overall incomes, the report said.
“In other words, not only do the rich, on average, pay a lower effective state and local tax rate than lower-income people, they also collectively contribute a smaller share of state and local taxes than their share of all income,” it said. “This limits states’ ability to raise revenue, particularly as inequality increases. Research shows that when income growth concentrates among the wealthy, state revenues grow more slowly, especially in states that rely more heavily on taxes that disproportionately fall on low and middle-income households.”
Poverty and inequality are serious problems in Ohio. For example, Medicaid, the state/federal health program for the poor, serves almost a third of Ohioans.
Many also lack the most basic necessities.
The U.S. Census Bureau’s Household Pulse Survey in October estimated that 357,000 Ohioans often or sometimes didn’t have all the food they need. It also estimated that members of 62,000 households who rent thought it was very or somewhat likely they would be evicted in the next two months.
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Even so, they’re being asked to shoulder more of the burden for state and local government than the richest Ohioans.
The Institute for Taxation and Economic Policy report looked at all state and local taxes people pay, including those on income and property and user fees such as sales and gasoline taxes. Since user fees are the same regardless of income, the less you earn the more of a percentage they take up of your income.
Many economists say relying too heavily on such taxes serves to make the poor poorer.
The federal income tax was proposed as a way of raising revenue — and to address growing inequality. President William Howard Taft, an Ohio Republican, in 1909 proposed a constitutional amendment allowing for it. The amendment was ratified in 1913, and in the debate leading up to ratification many representing agrarian interests said making things more equal was the entire point.
“The purpose of this tax is nothing more than to levy a tribute upon that surplus wealth which requires extra expense, and in doing so, it is nothing more than meting out even-handed justice,” said Rep. William H. “Alfalfa Bill” Murray, D-Okla.
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At the height of the push, Ohio voters in 1912 gave their OK for a state income tax by a 52-48 margin. But it wasn’t until 1971 that the General Assembly adopted it, and opponents have been chipping away and doing other things to reduce the burden on the wealthy ever since.
For example, a tax break benefitting people who can run their income through a limited liability company is costing the state $1 billion a year, despite doing little to fulfill promises to juice the Ohio economy.
In addition, the budget passed by the legislature and signed into law last year reduced the top tax rate in Ohio from 3.99% to 3.75% and then will consolidate the top two brackets and reduce them to 3.5%.
The moves seem likely to make worse what the Institute for Taxation and Economic Policy found in its analysis.
“Forty-four states’ tax systems exacerbate income inequality,” it said. “When the lowest-income households pay the greatest proportion of their income in state and local taxes, gaps between the most affluent and everyone else grow larger.”
The ex-husband of Monique Tepe has been arrested in connection with the killings of the mother and her husband Spencer Tepe, a respected dentist, in their Ohio home last week, Columbus police said Saturday.
Michael David McKee, 39, who court records identify as Monique Tepe’s ex-husband, is in custody in Winnebago County, Illinois, according to inmate records with the sheriff’s office.
McKee is scheduled to appear in court Monday, records show. He was arrested on two counts of murder in the killings on Saturday, an incident report shows, and was taken into custody “without incident” in Rockford, Illinois, police said.
Spencer Tepe, 37, and Monique Tepe, 39, were found dead with apparent gunshot wounds on December 30 in their house in Columbus. The couple’s two children, ages 4 and 1, were also inside but were not physically harmed, police said.
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The arrest marks a major development in the case after the suspect in the couple’s killings remained on the loose for more than 10 days, during which police released scant details on the investigation.
Police said Saturday they will release further information “as appropriate” to avoid compromising the “active and ongoing case progress” and urged people to contact them with any information related to the tragedy.
Authorities did not find any obvious signs of forced entry or any firearm at the scene, CNN affiliate WSYX reported.
Colleagues in Spencer Tepe’s dental practice called 911 after he uncharacteristically didn’t show up to work. One of Tepe’s friends went to the couple’s house, peered inside and saw a gruesome scene next to a bed, according to emergency dispatch audio.
“There’s … there’s a body,” the friend told 911. “Our friend wasn’t answering his phone. We just did a wellness check. We just came here. And he appears dead.”
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Asked if Tepe had been ill, the friend responded, “No, no. I was just with him yesterday.”
The couple’s two children and dog are now in the care of relatives, the Tepes’ brother-in-law said.
Students across various majors at The Ohio State University recently gathered at the Fisher College of Business to discuss how study abroad opportunities have helped them hone skills that will benefit their studies and chosen career paths.
Fisher’s Office of Global Business and its Office of Advancement hosted the inaugural Global Experience Luncheon. The event was held at the Blackwell Inn on the Columbus campus.
The luncheon brought together alumni who have donated to study abroad programs with students who have participated in them, said Dominic DiCamillo, senior director of the Office of Global Business.
“We were excited to partner with Advancement for the first time to facilitate this type of personal connection. The families that have created these endowments, oftentimes, they hoped it would have some sort of positive impact,” he said. “This is the first time for them to hear firsthand from the students who recently participated.”
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Xin Lin, a third-year finance student, shared her experiences studying abroad in Hamburg, Germany, and Chiang Mai, Thailand. While in Germany in summer 2024, Lin completed the Fisher Freshman Global Lab with Professor Michael Knemeyer and studied at the Kühne Logistics University.
During Lin’s semester in Germany, her cohort toured the facilities of several international companies, including the Mercedes-Benz auto manufacturer, Seven Senders logistics enterprise, and Jack Wolfskin outdoor apparel.
“This was my first time being in Europe,” she said. “It was a really eye-opening experience and taught me to be curious about exploring other cultures, which is why I made the decision to study abroad in Chiang Mai, Thailand.”
This past summer in Chiang Mai, Lin completed the competitive Fisher Global Consulting: Nonprofit program, which is funded by an endowment established by Chris Connor, a 1978 Ohio State alumnus, and his wife, Sara. The participating students, called Connor Scholars, gain firsthand insights into the cultures and business practices of countries in developing regions worldwide.
“We were there for two weeks working on the sustainability and the marketing for the local elephant foundation, as well as to support the villagers,” she said. “And my team and I, we worked on the sustainability curriculum for the local school.”
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Lin said participating in study abroad programs sharpened her decision-making and problem-solving skills.
“Leveraging these experiences has strengthened my understanding of international business and macroeconomics,” she said. “Most importantly, it is the growth mindset and the endless learning that these experiences have taught me, and I’m really excited to be carrying these values into my future career and my academic journey.”
Jacob Brodson, a fourth-year marketing major, said participating in the Fisher Global Marketing Lab in Taiwan this past summer was “a transformational, life-changing trip.”
“If you can go to someplace that’s so fundamentally different from what we experience here on a day-to-day basis, you should absolutely take the opportunity to,” he said. “And Taiwan is that opportunity.”
Brodson said studying marketing and visiting 10 companies in Taiwan gave him a broader perspective on business practices in different countries.
“We went to TSMC, which is the Taiwan Semiconductor Manufacturing Company. That’s the 10th largest company in the world that you probably have never heard of, but they make all the phone and computer chips that are in your cellphones,” he said. “It was an unbelievable experience to see that.”
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Brodson and his classmates also toured a Kenda Tire facility.
“They actually do a lot of marketing at Ohio State sporting events because their U.S. headquarters is out in Reynoldsburg,” Brodson said. “We got to see their entire manufacturing plant in Taiwan.”
Brodson said he was pleasantly surprised to discover a Buckeye community overseas. He met more than 25 Ohio State alumni throughout Taiwan.
“We are halfway across the world and yet the most beautiful thing is that there are still reminders of home. We’re halfway across the country and there are still Buckeyes there,” he said. “That is one of the coolest things – seeing the Ohio State alumni and the fact that this Buckeye tradition transcends countries.”
“If you can go to someplace that’s so fundamentally different from what we experience here on a day-to-day basis, you should absolutely take the opportunity to,” he said. “And Taiwan is that opportunity.”
