The Cleveland Income Tax Hike Explained (For Real This Time)

2016-02-07T17:59:21+00:00February 5th, 2016|

By Jeff Sleasman

As part of their coverage of Mayor Frank Jackson’s proposed income tax hike in Cleveland, the Northeast Ohio Media Group (now Advance Ohio) ran a strange, divisive, and misleading story entitled “Suburbanites pay 87 percent of Cleveland’s income taxes, but don’t get a vote: How does that work?” Masked as the sort of “explainer” journalism popularized by sites such as Vox.com, the piece does nothing to explain anything. Instead, it’s a collection of tangential and opaque statistics organized in a misleading attempt to drive a wedge between the city and the suburbs. This does nothing to either advance the debate on whether or not Jackson’s proposal makes sense, nor aid prosperity in our region.

[blocktext align=”right”]It’s a distinction without a difference, a favorite tactic of politicians and lawyers – and Obi Wan – when the deception can be followed with “what I said was true…from a certain point of view.”[/blocktext]Is NEOMG lying? No, not at all. They’re just deceiving. It’s a distinction without a difference, a favorite tactic of politicians and lawyers — and Obi Wan — when the deception can be followed with “what I said was true … from a certain point of view.”

Absent are the facts that might put that certain point of view in context: for example, the fact that income taxes only make up a portion of the city’s revenue. As any good homeowner knows, property taxes are a thing. This particular omission is amplified in NEOMG’s list of the city’s top employers, which does nothing to explain “how this works.” Top employers include, in order: the Cleveland Clinic, University Hospitals, the US Office of Personnel Management, Cuyahoga County, the Cleveland Metropolitan School District, the City of Cleveland, MetroHealth, KeyCorp, Case Western Reserve University, and Sherwin Williams. Those organizations are all very large and require very large facilities. Except the top seven and eight of the ten are nonprofits and are therefore mostly exempt from paying property taxes on those very large facilities — including downtown and University Circle properties with high property values.

The premise is also awkward insomuch as workers in the city would presumably object if their offices — where they spend half their waking hours — were suddenly stripped of all city services, including police and fire protection. It’s additionally dishonest because nobody would ever put such a wedge up between a suburb and another suburb. It’s not suggested that Beachwood turn over some of the control of its city to the shoppers at Beachwood Place or commuters who work at Eaton or the Ahuja Medical Center. Nor that Solon give up its right to its own affairs because commuting workers are employed in their industrial parks. As much as we’d all probably like to rein in Linndale or Woodmere for their speed traps, there’s no conversation about colonizing them because of how they choose to cover their operating costs. NEOMG intentionally splits suburbanites from the City of Cleveland for inexplicable reasons — although one can assume it’s because it makes for good clickbait.

rooftop Cleveland s

Credit: William Rickman

The real kicker comes when NEOMG decides to bring up the overwrought and misunderstood idea of “taxation without representation.” That’s just wrong. It’s factually wrong from a political science standpoint and it’s morally wrong as an inflammatory rhetorical tactic. “Taxation without representation” isn’t something one can just scream when there’s a tax that one doesn’t like. We are not taxed without representation if we travel to Las Vegas and pay high hotel taxes. We are not taxed without representation when we buy something in another state and pay their sales tax. We are not taxed without representation because there’s a visa fee to enter other countries. We have perfectly comprehensive representation on our own city councils, whether or not they are the city councils of the cities in which we work. Commuting workers get most of their income taxes rebated by their own cities when they work in one city and live in another. In its non-explainer, NEOMG mentions this but does not actually explain it. RITA is certainly not a joy to use, but there’s a solid rationale for having it. I doubt anyone would want their local votes to be negatively prorated in strength because they work outside the city of their residence and therefore don’t pay full local income tax.

[blocktext align=”left”]The bottom line is that no matter the municipality, we’re in this Rust Belt puzzle together. We can’t have fictitious cleavages tear us up just so NEOMG can add to its daily clickbait posts.[/blocktext]There are real issues that need to be discussed about Mayor Jackson’s proposal. There are real issues that need to be discussed about regionalism. There are real issues that need to be discussed about urban planning and decisions made during the second half of the 20th century, when massive government expansion led to Cleveland being a hub for employment but less so for residency. There are probably even greater issues to be discussed about urban-suburban relationships and the finances of those relationships. I fear, however, that suburbs wouldn’t like the ledger. NEOMG’s piece does nothing to advance any of these discussions. I would invite them to read Ed Glaeser, Aaron Renn, or Charles Marohn for a genuine explainer of how things work. The bottom line is that no matter the municipality, we’re in this Rust Belt puzzle together. We can’t have fictitious cleavages tear us up just so NEOMG can add to its daily clickbait posts.

I would also invite any suburbanites who feel as though they are taxed without being represented to move to Cleveland! Vote for our city council. Be my neighbor! I have no desire to drive a wedge between us and welcome you with open arms. Or maybe a CLE Clothing T-shirt if you’re not a hugger. C’mon down. We’ll have a beer … and pay alcohol tax on it.

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Jeffrey Sleasman is a skinny kid from Cleveland. He works in management at a small biotechnology company in Midtown.

Banner photo by William Rickman.

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3 Comments

  1. Bronco February 5, 2016 at 12:42 pm

    Maybe use the tax money collected to pay to help people to move somewhere else?

    • Panther February 8, 2016 at 4:28 pm

      That’s essentially what our national transportation policy is built around: increasing value of the suburbs at the expense of the urban core. It’s top-down social and financial engineering and it’s massively expensive.

  2. Mitchell Paul February 7, 2016 at 6:54 pm

    More lies from Plain Dealer… Here is the problem they won’t discuss. Protecting Armond Budish… : weco fund was a former cleveland microlender[nonprofit ein #34-1439659 if you wish to look up the public 990 irs forms every charity submits]that closed mid 2012. Spread the gospel of Wealth Education and financial literacy. The charismatic and brilliant PHD certified financial planner has hundreds of millions of assets in her trusts and investments according to her website. Elisabeth Plax also has Armond and Amy Budish investments according to the New York times also ms Plax is frequently on Armond Budishs tv show Golden Opportunities[oppurtunities to defraud the elderly i am afraid]. Elisabeth Plax should be able with such great credentials be to answer the following problem regarding the stolen 45,000$ she was resposible for as the president of weco funds board of trustees. United Way gave weco fund two grants totalling over 157,000$ in 2012. ….that same year weco fund claimed 112,000$ in income from grants!!!!! Elisabeth Plax has not denied to me that she has stolen these funds! Now it gets even more interesting as one might suspect United Way might be concerned about the missing monies…they knew about. from Bill Kitson ceo of united way”i do remember this situation,we stopped funding immediatly upon my understanding there was a problem with the agency. While it is fair to ask what happened to the money,it is unlikely we will ever find out” That is assured if no one looks …and the Plain Dealer and other news organizations will NOT LOOK. United Way also failed to report the thefts. United Way claims to carefully track the grants they make to make sure they are properly spent…an obvious lie. Also a huge amount of bad loans were made….probably made with no intention of repayment to coconspiritors.Please some real journalist look at this huge fiasco being hushed up to prevent embarassment and prosecution of these powerful theives!!

    The latest 990 report from United Way if filed yet(it’s on website, not yet on guidestar) in section 6 checks no if there was a problem significant diversion of assets… Monies were stolen. Michael HEADON has not responded to email… Or Bill Kitson who has admitted the diversion… Why not call it theft

    http://www.cleveland.com/metro/index.ssf/2016/02/united_way_leaders_confident_a.html

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