Americans love lists. The internet especially loves lists. The top ten this, the bottom twenty that, five reasons you should do this, top three mistakes every business makes; no matter the subject, there is a list.
Of course, you may not be interested in the top ten Kardashian decorating tips, and those are designed purely as click bait, attempting to get someone to look at a web page. But everyone is interested in taxes. Some of those lists may be little better than the ones regarding Kardashian decorating tips.
Take rankings of highest and lowest tax states. How meaningful are they? One such list points out that Ohio ranks 44th with the sixth highest tax rate. Ohio was calculated to have an “effective” tax rate of 12.97 percent, and a median income household would pay a tax of $6,991.
While that sounds bad, the reality is that there is less difference in tax rates than the creators of these lists would like you to recognize. Note that the District of Columbia ranks 18th on the list and this sounds much more attractive than Ohio’s 44th ranking.
But the District’s tax rate is still 10.02 percent, meaning that while it is 26 states lower than Ohio, you only pay 2.95 percent less tax. While this is not insignificant, it sounds considerably less dramatic that saying Ohio has the 44th worst tax ranking.
The most important tax rate is the one you pay, and it will depend on whether you are an individual or business and a host of other factors. If you have issues with tax determination from the Department of Taxation or the Internal Revenue Service, you should probably discuss your issue with a tax attorney to understand your issue and what can be done to resolve the matter.
Source: daytondailynews.com, “Ohio tax burden near the highest in U.S.,” Rich Gillette, March 20, 2016
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