Brian Tucker and I Agree! Well…

Well, how about that. Who’d have ever thought?

Brian Tucker and I agree on something.

He’s no less than the Publisher and Editorial Director of Crain’s Cleveland Business.

“Clevelanders faced with taxing way of life,” said the title of a recent editorial commentary.

I’d never thought it possible that we would share the same outlook.

Let us not, however, get carried away.

The tax issue involves a Plain Dealer article about a Chicago man and the cost of living there and here. He compared costs, Chicago-to-Cleveland and two suburbs to determine whether he could afford to move here. The comparison suggests that he cannot. Sorry, taxes are too high here, though he earns a tidy $200,000 a year.

Tucker immediately concludes: SEE TAXES ARE TOO HIGH HERE.

He does not ask an obvious question: too high for whom.

“This is what we’ve created, folks. We can crow about the easier pace of life here and our great cultural amenities, but it’s going to be nearly impossible to restore Northeast Ohio until we face the fact that our taxation system is out of whack,” he writes.

Here, Tucker and I part company.

Taxes are out of whack for SOME. For others, it’s just wacko good.

The Chicago-to-Cleveland figures reveal that taxes are too high on some individuals and families here.

People of wealth particularly get enticing breaks.

The problem is between taxes that are regressive or progressive. The city income taxes are very regressive. Onerously regressive, starting on the first wage dollar one earns. (There are also high sales taxes, all regressive.)

The major difference is the city “income” tax here is really a payroll tax. There are no deductions. You pay on the entire paycheck. It makes the tax highly regressive.

Wealthy people have varied forms of income that escape the city tax. Salaries, for most people, represent their only income.

Someone earning $10,000 a year or someone making $1-million a year pays at the same rate.

Personally, I often did not pay a cent in federal income taxes, yet had to pay more than I could afford in city income taxes.

As Tucker describes it: "His total tax bill in Chicago, including income and property taxes, would be $13,000." It’s no less than frightening to read what his comparable taxes would be in the three cities he chose here. In Cleveland, he’d pay $21,000. In Lakewood, he’d pay $25,464, and in Cleveland Heights, he’d pay $26,320.

The Chicago guy shows us that we are heavily burdened by regressive income taxes. Chicago does not assess a city income or payroll tax.

I’m sure that Tucker would like to see business taxes lowered or eliminated. That’s his mindset. He never says, “Hey, go easy on the poor working guy. Please.”

The Chicago-to-Cleveland article is a revelation in other ways. I don’t believe either the person who wanted to move back but couldn’t afford it (he thought), or the PD did a very good job of making valid comparisons. For one example, the sales tax in Chicago outrageously applies to food. Not here, something to be thankful about.

The PD also allowed the Chicago person to select the elements in play, particularly assigning values that might not be correct. In fact, I believe, are misleading. The value of what money buys in housing here compared to Chicago does not ring true. You can get a lot more for your money in any of the three chosen spots than in similar areas of Chicago. We are never told where this guys lives. Where in the city? In what suburb?

Another element goes unmentioned and unexamined.

For one thing, a check of property taxes in Chicago reveals, according to the Illinois Property Tax System (IPTS), that Cook County establishes its own assessment system.

It assesses residential and commercial at different rates. The IPTS reports that Cook County assesses residential property for tax purposes at 16 percent of market value while commercial property is at 38 percent.

All real property here is assessed at 33 percent of market value. That does make a heavier burden on homeowners.

Residents, i. e. homeowners pay at a lower rate than profit-making commercial property owners in Chicago.

Historically, Cuyahoga County applied taxes similarly until the 1950s. Commercial property was assessed at a higher rate than homes for tax purposes. Then the Swetland family, owners of the Park Building on Public Square, sued, claiming the dissimilar rates were unfair. The Ohio Supreme Court agreed and ruled that both property categories – home and commercial - must be assessed at the same rate.

The Court thus gave commercial, profit-making property owners a break. That means that homeowners had to pick up the burden.

This situation has been made even worse for many homeowners as home and commercial property has been tax abated or even exempted from taxes since that Supreme Court decision. Cleveland’s 100 percent tax abatements also favor the wealthier against the long-time resident-homeowner.

The same criteria that leveled commercial taxes in Ohio with homes should be applied to abatements. They are fundamentally unfair and should be eliminated.

Now some seek an income tax or raised sales tax, both regressive, for schools.

There is no fair way an income tax that is not graduated should be applied for schools. It will tax wage earners and allow those with other than wage income to escape responsibility.

Sorry, to all those who want public schools better funded. I agree. However, not at the cost of another regressive tax that weighs heavily on lower incomes.

Fairness in taxation should be the resolve in any new taxes for schools.

That would mean Tucker would pay more. I’d pay less. Sorry, Brian.

From Cool Cleveland contributor Roldo Bartimole roldoATadelphia.net

(:divend:)