Local Taxation Issue

[AFFIRM]

I wonder if someone can help me out here.
I moved to Ohio a few years ago and I have noticed an alarming local taxation policy here. When we receive our paychecks there is a payroll tax withheld for the municipality of the employer. Understandably this is a means of generating revenue for all cities and towns that have employers. However, as I (and I suspect, a majority of you) do not live in the same town as employment is obtained, the result ends up being that we have taxation without representation. For example, in the past years Akron has put initiatives on the ballot that I do not support. When they pass, my tax dollars pay for them. Yet I have no voice whatsoever as I do not live in Akron.
I may be going out on a limb here, but wasn't one of the major reasons this country's creation, the result of England's unfair taxation policies? I thought possibly that our state income tax rates might be lower than most other states in order to compensate for this disparity. Resoundingly they are not as the following table shows.
http://www.taxadmin.org/fta/rate/ind_inc.html
Furthermore, it appears that in many municipalities, the withholding rates are equal to (if not more than) the state rate. Where does this money go?
This policy of taxing where our employment is, while it does allow for the neighborhoods in which we work to prosper, denies largely residential towns the ability to prosper. As mentioned above, it denies us a voice to attach to our tax dollars. Thirdly, it masks accountability in how our tax dollars are spent. Lastly, and perhaps most importantly, this taxation method requires school districts in largely residential neighborhoods to constantly put levies on the ballot. When these levies fail the children suffer.

Please, someone help me to understand this ..............

[geiger]

1. Some of this is changing, but there are the converse issues to consider

there are reciprocal agreements between some cities as to where the tax will be collected. sometimes both cities collect, i think....

what is more alarming is that some municipal employees think that they should be exempt from residency requirements. Last year the firefighters union in Cleveland successfully lobbied the Ohio legislature to remove those. Cleveland has the worst disaster preparedness marks at least in the state, and maybe the whole country, and they still feel justified living whereever they please even though their salaries come from the taxpayers of the area where they work.

So, I would have to argue on the other side, if you have no (living) stake in the community, there's all the more reason to take the taxes. If you work in a community, you spend the majority of your waking hours there, using the electricity, infrastructure, roads, etc. These things are not free. I would further argue that people are more likely to be "civicly involved" where they live, if they do not also work there, thus the employer community suffers a sort of "brain drain" and commitment to local issues and causes. Plus, cities and towns have basically been at war with each other competing for new businesses and to keep new businesses, not at a small cost, in terms of tax abatement and other incentives, to boot.

I have been in both situations, and I prefer to live where I work, but we don't always have that choice, and it is indeed very frustrating, esp. when you are civically minded.

[AFFIRM]

4. converse issues

I understand these concerns. However, my reason for posting the 50 State tax rate table was to point out that our state taxes are in line with other states. What I evidently neglected to mention was how few of these states have any local municipality tax collection. I have lived in MD, CA, GA, IL, VA, NC and SC. Not one of these states has any system of local tax collection on top of their state tax collection. So my question is; How is it they are able to pay for their roads, schools and other community services without a double tax as we have?

[MeDeMax]

7. different reasons

MD & VA - are next door to DC, the overflow froth from the federal beer keg
is enough to fund everything there.

CA if I remember correctly, has one of the highest state taxation rates in
the country, do they really need local taxes on top of that ? CA offers free
college education to its residents & the governor has erected a special tent
outside the state house where he enjoys an occasional cigar...go figure !

NC tobacco taxes.

GA, IL & SC - you got me.

I feel the CCA (central collection agency) which collects local taxes in NEO,
is an un-necessary bureaucratic overhead that has resulted in inflation of
our taxes...just my humble opinion.

[geiger]

9. Georgia would be Coca-Cola

[Kolesar]

8. Some states have hundreds of dollars of "auto tag" fees per year

But lower income taxes, like Washington that had no income tax when I was there years ago.

[geiger]

10. and in Ohio we donate tag fees to anti-choice bumper plates, go figure

[geiger]

11. I lived in Texas in the eighties and there weren't even any state taxes

BIG OIL

[geiger]

12. California

is in a mess because from the time of Proposition 13, I think it was, when I was out there in college 76-79, there has been one "proposition" after another hamstringing the state budget to the point that anyone who tries to do anything about the budget, just cant, due to bogus ballot initiatives (eerily a new trend in OHio) that try for quick angry fixes but dont address underlying problems

[GOTV]

2. I understand the frustration

I work in Cleveland but live in an inner ring suburb. I pay taxes to both cities.

I'm not sure what to do about it but, I do make extensive uses of the city resources. I drive on their streets, I use Cleveland water, I walk through public spaces protected by the CPD. Should I get all those things for free?

On the other hand, I have no say in what's done with that money.

I don't like paying the taxes but how else can I help pay my fair share of the upkeep of that public space?

[AFFIRM]

5. please see my response to poly speak [above]

[mtnester]

3. In many cities/villages, you can take some portion of what you pay

to your "employment" city and credit it against your "where you live" municipality. If you do not have any income taxes in your home municipality, then there is not much recourse. You should contact the governing body of the municipality where you work AND live and let them tell you how income tax reciprocality works.

Now, please make sure your employer is withholding any income tax for your school district (where you live, NOT where you work) if that is applicable. The last thing you want is a 1% or so "surprise" at tax time. You may not have an income tax in your district, which can also be the case. By Ohio law, your employer is REQUIRED to withhold schoold district income tax, based on the school district you live in.

Ohio's taxes are ridiculous...property taxes for school districts are a nightmare...I will give everyone the clue...I live in one of the snottiest and most highly taxed school districts in central Ohio...and it ain't north of Columbus...our property taxes listed for school district are IMMENSE, plus we have an income tax on TOP of that for schools.

Bleh...taxation in Ohio is difficult, expensive and it sucks.

[AFFIRM]

6. please also see response to poli speak [above]

[Schmajo]

13. Yes, Ohio is different

Municipal income taxes are very rare in the U.S. Ohio's situation is even more peculiar, in that, initially, the muni taxes had no overriding state regulation -- they are based in the Home Rule authority of municipalities. (PA is the only other state with wide-spread city taxes, but mostly they are regulated by state law and are identical in provisions and rates.) The first city income tax was enacted in the 1940s by Toledo. Since Ohio did not have a state income tax (until 1972), the local tax was ruled consititutional, meaning it was not pre-empted by state law. Over the years, the General Assembly has increasingly passed laws to regulate the muni taxes (see Chapter 712 of the Revised Code). For example, one of the 1st restrictions (in the 1950s) was to require popular votes for all tax rates over 1%.

However, the muni income taxes long ago became an essential part of funding most city and village governments, so they are not going away.

In other states, the cities get their funds from other tax sources, e.g., property taxes, business license fees, etc.