Estate tax benefits few at cost to many
In her Jan. 10 letter to the editor, State Representative Nan Baker listed a smorgasbord of so-called jobs legislation she supported in the General Assembly. But one law she supported – the repeal of the Estate Tax – is not really about promoting jobs or economic growth. It is more about making sure the wealthiest in Ohio remain so, at the expense of Ohio's middle class.
Most Ohio families – more than 90 percent, according to the nonpartisan research institute Policy Matters Ohio – will never have estate tax due after they die. According to Policy Matters' Feb. 2011 testimony to the House Ways & Means Committee, the estate tax was paid on about 7.5 percent of Ohio estates in 2009. Estate tax was finalized on just about 8,000 estates. This is not a tax on Ohio's middle class, on those families living, working and sending their children to school in Rep. Baker's District 16.
Rep. Baker claims the estate tax repeal "will encourage retirees to remain in the state, as well as their businesses and investments." PolitiFact examined this claim for Rhode Island in 2011 and determined it "False." Are rich retirees heading out of Ohio for greener pastures because of the estate tax any more than the lack of such a tax in neighboring Michigan is keeping its residents at home to create jobs?
Numerous academic studies point to climate or good health care services as discouraging or encouraging moving. Estate tax should not be used as an economic development measure designed to attract or retain rich elderly residents.
The repeal of this tax will further weight Ohio's state and local tax system in favor of the affluent. Lower and middle-income Ohioans pay a greater share of their income in state and local taxes than more affluent Ohioans do. Ohioans in the top 1 percent of the income spectrum (who made at least $352,000 in 2007), pay an average of 7.8 percent of their income in state and local taxes.
By contrast, the fifth of Ohio families in the middle, who averaged $40,5000, pay 11.0 percent. The estate tax is one of the few taxes that partially offset a tax system that falls more heavily on less affluent families. By voting to repeal the Estate Tax, Representative Nan Baker chose to promote a less progressive tax system for Ohio.
– Jeanne Bulloch, North Olmsted