Comments on: Keeping your eye on the pea http://www.buckeyeinstitute.org/blog/2008/05/13/keeping-your-eye-on-the-pea/ Up To The Minute Analysis Of Ohio Public Policy Wed, 20 Aug 2008 15:14:37 +0000 http://wordpress.org/?v=2.6 By: Marc Kilmer http://www.buckeyeinstitute.org/blog/2008/05/13/keeping-your-eye-on-the-pea/#comment-264 Marc Kilmer Wed, 14 May 2008 17:46:04 +0000 http://www.buckeyeinstitute.org/blog/2008/05/13/keeping-your-eye-on-the-pea/#comment-264 You are right that it's very important to keep an eye on the rate of increase in government spending. But the way taxes are levied is important, too. As you point out, there will always be winners and losers in any tax policy. The important thing is that if taxes are being raised to pay for goods and services used by all, then the tax should be as broad-based as possible. This will both ensure that those who benefit pay but also that the rate is low. The earned income tax tries to single out only a small portion of taxpayers to shoulder the burden of public schools. Of course, as I mentioned in my article, not all benefit from public schools. Those with children benefit the most. In cases where only a certain segment of society imposes costs on the government, it is only fair that they pay more to compensate for those costs. But I doubt the idea of singling out parents to pay a higher school tax would be too popular as you say. So it's a difficult question. You are right that it’s very important to keep an eye on the rate of increase in government spending. But the way taxes are levied is important, too. As you point out, there will always be winners and losers in any tax policy. The important thing is that if taxes are being raised to pay for goods and services used by all, then the tax should be as broad-based as possible. This will both ensure that those who benefit pay but also that the rate is low. The earned income tax tries to single out only a small portion of taxpayers to shoulder the burden of public schools.

Of course, as I mentioned in my article, not all benefit from public schools. Those with children benefit the most. In cases where only a certain segment of society imposes costs on the government, it is only fair that they pay more to compensate for those costs. But I doubt the idea of singling out parents to pay a higher school tax would be too popular as you say. So it’s a difficult question.

]]> By: Marc Schare http://www.buckeyeinstitute.org/blog/2008/05/13/keeping-your-eye-on-the-pea/#comment-263 Marc Schare Wed, 14 May 2008 16:55:26 +0000 http://www.buckeyeinstitute.org/blog/2008/05/13/keeping-your-eye-on-the-pea/#comment-263 Any tax policy has winners and losers. A property tax exempts renters who may have kids in the district and hits business who, in theory, does not benefit from the school district at all. An income tax excludes business who could (in theory) benefit greatly from the school district. An earned income tax excludes retirees and business. A user fee would be the fairest but goes against the concept of a "free" public education. The real issue is not how the money is raised, it is how (and how much) money is spent. The rate of increase of public school expenditures in the state is much higher than the rate of increase (decrease?) of incomes in the state, so no matter how those incomes manifest themselves tax wise, if you ignore expenditures, the state is in an unsustainable situation vis-a-vis school funding. It is not a question of who deserves what, it is simply a matter of affordability over time. Any tax policy has winners and losers. A property tax exempts renters who may have kids in the district and hits business who, in theory, does not benefit from the school district at all. An income tax excludes business who could (in theory) benefit greatly from the school district. An earned income tax excludes retirees and business. A user fee would be the fairest but goes against the concept of a “free” public education.

The real issue is not how the money is raised, it is how (and how much) money is spent. The rate of increase of public school expenditures in the state is much higher than the rate of increase (decrease?) of incomes in the state, so no matter how those incomes manifest themselves tax wise, if you ignore expenditures, the state is in an unsustainable situation vis-a-vis school funding. It is not a question of who deserves what, it is simply a matter of affordability over time.

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