Black Ohioans pay higher share of income in state taxes than white Ohioans
Posted February 11, 2021 in Press Releases
Black Ohioans are more likely to pay a higher share of their incomes in state and local taxes than white Ohioans, according to new analysis from Policy Matters Ohio and the Institute on Taxation and Economic Policy (ITEP).
The state’s wealthiest residents — who are largely white — pay a lower share of their incomes in state and local taxes than people with low incomes, who are disproportionately Black or brown. Fifteen years of tax cuts have benefitted the wealthiest by cutting the state’s most progressive tax, the income tax. Meanwhile, policymakers shifted the state’s reliance to the sales tax, which is not based on the ability to pay. People with lower incomes end up paying a higher share.
“Long-standing barriers to opportunity have forced many Black, brown and Indigenous Ohioans into lower-paying jobs and segregated communities,” said Policy Matters Ohio Senior Project Director Wendy Patton. “The state tax code can shrink inequality or make it worse. In recent years, certain policymakers have chosen to funnel our public resources to corporations and wealthy, mostly white residents, while draining communities of money for schools, public transit and health care.”
The analysis shows that 33% of Black and 25% of Latinx Ohioans are in the bottom fifth of earners, being paid less than $19,000 a year. Meanwhile only 8% of Black and 10% of Latinx Ohioans are in the top fifth, and are paid more than $91,800 a year. By contrast, 17% of white people are in the lowest-income fifth and 22% are in the wealthiest. Ohioans of Asian descent are most likely to be in the top income group and least likely to be in the bottom fifth. The relatively small population of Indigenous people in Ohio did not provide statistically significant findings.
As a result, the Black and Latinx Ohioans among the bottom four-fifths of earners pay 10.7% and 10.2% of their income in state and local taxes, respectively. The Ohioans in the top quintile — who are predominantly white — pay 8.6% on average.
“We all do better when everyone comes together to do their part.” Patton said. “If Ohio lawmakers are serious about making our state a place where everyone can thrive, regardless of their race, they must rebalance Ohio’s state and local tax system so the wealthy and corporations fully contribute to the state that has helped them succeed.”
Read more about Policy Matters’ tax proposals: