Arrieonna Derricoatte is working toward a Master of Public Administration at Ohio State University.
There's a push around the country for more fair tax systems.
Recently, voters in Massachusetts, Maine, Rhode Island and Washington joined other states in passing taxes on high earners, often focused on taxpayers earning over $1 million.
Even more states are following, as federal funding cuts loom over state budgets and threaten Medicaid, food assistance and other critical public services.
Adequately funded public services benefit everyone, but for decades, legislators have shifted the responsibility to fund them onto America’s working families while cutting taxes on top earners and businesses. By rebalancing who contributes to these public goods,
states can better support the services people rely on.
Together, we can build a tax system that is more sustainable, equitable and responsive to the needs of everyday people.
Fair share taxes are how we get there.
What is a fair share tax?
A fair share tax requires people to pay based on their ability to do so. People with high incomes contribute a larger share, leaving people with lower incomes more to help afford the basics.
What about Ohio?
Ohio recently implemented a flat tax: Now, millionaires in Ohio will pay the same state income tax rate as public school teachers and childcare workers. In fact, everyone earning more than $26,050 a year will pay the same 2.75% rate no matter their income.
As a result, the average Ohio millionaire will pay $19,000 less per year in state income taxes. This is more than 100 times the average tax reduction for non-millionaires – and Ohioans earning less than $26,050 don’t benefit from the cut at all.
Ohio wasn’t always this way. Back in 2004, the state had nine income tax brackets, with Ohioans paying a top rate of 7.5% on income over $200,000. By 2024, Ohio legislators had cut down to three tax brackets with a top rate of 3.5% on incomes above $100,000.
These changes are costing Ohio precious resources.
The wealthiest Ohioans should pay more
A tax system with multiple brackets (also known as a graduated income tax) means people who make more pay more. This is what most states have in place, raising valuable funding for public education, health care and human services.
Yet in Ohio, 20 years of tax cuts are costing quite a lot: roughly $17 billion a year in forgone revenue. Meanwhile, Ohio communities pay the price. For instance, last year, Ohio’s lawmakers passed a state budget that left Ohio’s schools underfunded by more than $2.75 billion compared to the actual costs of educating Ohio students as laid out by the Fair School Funding Plan.
It doesn’t have to be this way; just take a look at Massachusetts.
Its fair share tax (an additional 4% on income over $1 million) has raised over $6 billion for public education and transportation in just its first two years. Revenue from its fair share tax has repeatedly surpassed the state's initial annual estimates.
Taxing high-income earners at a higher rate in Ohio could generate much-needed revenue here as well. States that pass fair share taxes raise real revenue for public schools, transportation, health care and much more.
Ohio could do the same thing: Ask the wealthiest residents to pay a bit more and put that money into schools and public services that so many depend on to thrive. Ohio used to have a tax system built on this idea, and we can do that again.
Arrieonna Derricoatte is working toward a Master of Public Administration at Ohio State University. She recently completed a Tax Policy Research Internship for Policy Matters Ohio.
This article originally appeared on The Columbus Dispatch: Richest Ohioans aren't paying fair share. A fair tax system would fix that | Opinion
