GOVERNMENT: State Government Finance
Positions: State Finance
Criteria (Adopted July 1989)
LWVO supports the following tax principles as criteria to be used in evaluating individual taxes and the tax mix in Ohio. Taxes should:
1. Be fair and equitable;
2. Provide adequate resources for government pro¬grams while allowing flexibility for financing future program changes;
3. Be understandable to the taxpayer and encourage compliance; and
4. Be easy to administer.
Taxes on Business (Adopted July 1989; Revised December 2010)
LWVO supports taxes on business as a source of state revenue especially because businesses should help pay for services received.
Income Tax (Adopted July 1989)
LWVO supports a personal income tax as a source of state revenue because it meets fair and equitable tax principles. The state in¬come tax rates should be graduated.
Property Tax (Adopted March 1983)
1. LWVO supports real property tax relief, fi¬nanced by the state, in the form of the Home¬stead Exemption based on age, income, and disability income.
2. LWVO supports the elimination of the real prop¬erty tax rollbacks, both across-the-board and for owner-occupied homes.
Sales Tax (Adopted March 1983; revised June 1989)
1. LWVO supports a change in the base rather than a change in the rate of the sales tax. We favor broad¬ening the base by reducing the number of exemptions.
2. LWVO supports application of the sales tax to non¬essential services, tickets for pro¬fessional ath¬let¬ic and entertainment events, and prepared food purchased for on-or off-premise consumption.
3. LWVO supports exemptions for food, other than prepared food sold for off-prem¬ise consumption, prescription drugs, prosthetic and surgical devices, and items for direct use (com-ponents in manu¬facturing and agricultural use).
Tax Mix (Adopted July 1989; Revised December 2010)
If an increase in state taxes is needed, LWVO prefers the income tax as a source of revenue because it tends to be progressive rather than regressive. Applying means testing to state property tax-relief programs would increase the revenue generated by the tax and make the system more equitable by not unduly burdening low-income individuals and families. Taxes on alcohol and tobacco are another revenue source if needed. An increase in sales tax, although less desirable, is another possible revenue source.
If a decrease in state taxes is called for, LWVO supports reducing the sales tax because it is regressive and less equitable. Tax relief for those at the lower end of the income scale should be considered if there is an increase in state taxes.
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