Transparency and Performance: Accountability for Public Monopolies

Limiting pay and pension costs will shrink government’s footprint, but we must also transform how government operates. Unlike the private sector, public agencies face no competition – a DMV or a school district is a monopoly provider by law. These agencies, absent regulation, can become unaccountable “looters,” extracting wealth without the discipline of the market. To protect citizens, transparency and oversight must play the role that competition does in free enterprise. That means rigorous performance audits and public scrutiny for every government entity. If a county office or city utility wants funding, let it open its books. Ohio’s Auditor of State already has a Performance Audit program, and the results speak volumes: for every $1 invested in a performance audit, local governments identified about $7 in potential savings, and school districts about $35 in savings. Over 400 such audits since 1995 found a total of $1.2 billion in excessive costs that could be trimmed. This is proof that bloat and waste are not rare exceptions – they are common in the shadows of unexamined bureaucracies.

Under our plan, regular performance audits would be mandatory for all public monopolies – state agencies, municipal, township, and county governments, school systems, transit authorities, etc. Each would be reviewed on efficiency, results, and prudent use of funds. Wasteful programs and redundancies identified by auditors must be corrected or defunded. Additionally, all public bodies must adhere to sunshine standards: budgets, salaries, and contracts posted publicly online in a searchable database. Ohio has made strides with transparency portals, but many entities still obscure how they spend your money. We the taxpayers have a right to know – down to every dollar – where our money goes and what value we receive. Such transparency isn’t a bureaucratic headache; it is the oxygen of democracy and the bane of corruption. When inefficiencies are exposed, resources can be redirected to essential services that truly warrant funding – police, fire, infrastructure, aid for the vulnerable. A leaner, performance-driven public sector means that even with lower taxes, we won’t need to fear service cuts, because we’ll be doing more with less. In short, we replace brute-force “revenue generation” with intelligence in spending. The honest, efficient government is the only kind morally fit to ask anything of its citizens – and the only kind that can operate on a constrained budget without collapse. Accountability will ensure that as Ohio cuts out property taxes, every remaining tax dollar works as hard as the taxpayers who earned it.

A New Tax System for a New Era: Prosperity Through Freedom

Having slashed the cost of government down to its essentials, Ohio can fundamentally restructure how we collect revenue. The current system punishes productivity and property: work harder and your income tax rises; invest in a home or business and get walloped by property levies annually. It’s an absurd, inverted incentive structure – as if to say we begrudge success and ownership. By contrast, productive achievement should be celebrated, not penalized. We propose to scrap the archaic property tax (and phase out state income tax) and replace them with a tax system that is simple, fair, and growth-friendly. A limited government should draw its funding in ways that minimize intrusion on individual liberty. Below are the key pillars of this new tax foundation, designed to keep the engine of enterprise running free while still funding essential services:

• Broad 10% Sales Tax (Consumption-Based Revenue): Instead of taxing income or property, Ohio will levy a constitutional maximum 10% sales tax on the final (retail) sale of goods and services. This single-rate consumption tax ensures you are taxed on what you choose to spend, not on what you earn or own. Revenue from this tax will be shared one-third to local municipalities, one-third to counties, and one-third to the state, giving local governments a direct, stable funding stream. At 10%, Ohio’s combined sales tax would remain competitive (many areas already approach this level), and it replaces the lost property tax revenue through broader participation in the tax base. Tourists and visitors contribute when they buy here, easing the burden on residents. Crucially, this tax is Constitutionally capped at 10% – no jurisdiction can crank it higher preventing an endless upward spiral. A consumption tax encourages saving and investment (since only spending is taxed), and it lets individuals control their tax burden by choosing how and when to purchase. It’s fair and proportional: wealthy individuals who spend more will pay more, while those on tight budgets can economize. For perspective, Ohioans paid $23.9 billion in property taxes in 2024, whereas the state sales tax at current rates yielded only $13.7 billion.

• Expanding the sales tax base to include a tax on the sale of residential and all commecial property and on property insurance premiums – and possibly to some services not currently taxed – and instituting the full 10% rate statewide will make more than make up the difference, especially as economic growth kicks in. The freedom to own property without annual tribute to the government will stimulate real estate markets and entrepreneurship, fueling additional sales (and thus sales tax) as prosperity grows.

• Expanding the sales tax base to include a tax on the sale of Residential Property and on Property Insurance Premiums – and possibly to some services not currently taxed – and instituting the full 10% rate statewide will make more than make up the difference, especially as economic growth kicks in. The freedom to own property without annual tribute to the government will stimulate real estate markets and entrepreneurship, fueling additional sales (and thus sales tax) as prosperity grows.

• One-Time Property Transfer Tax (Replacing Annual Property Tax): Under this plan, property tax as an annual recurring levy is abolished. In its place, we institute a one-time sales tax capped at 10% at the point of property purchase – akin to a title conveyance fee – for big-ticket items like real estate and vehicles. When you buy a home or land, you pay the retail sales tax only at the time of sale. This is a fairer approach: you pay when you acquire new wealth (similar to a sales tax on the property), but once you own it, it’s truly yours free and clear. No more yearly confiscation of your castle by the taxman – a home should not be something you rent from the government under perpetual threat of foreclosure for tax nonpayment. To avoid burdening buyers unduly, counties and cities can allow the one-time tax on large purchases (say over $20,000, indexed to inflation) to be paid in installments over up to 10 years, or the normal useful life of the asset. This deferred payment option acts like an interest-free loan of the tax, so a young family buying a house can spread the cost rather than face a lump sum. It’s essentially a self-financed “mortgage” for the tax, rather than the government forcing you into escrow.

• Additionally, property insurance premiums – which every responsible owner pays – will be made subject to sales tax. Why insurance? Because it’s directly tied to property value and upkeep; taxing premiums means those with pricier properties (and bigger policies) contribute more, and it slightly nudges people to mitigate risks (lower premiums) where they can. Altogether, these changes mean that once you’ve paid off your property and its initial tax, you can enjoy it without the specter of tax hikes kicking you out of your home. Ownership and security – the bedrock of liberty – are restored.

• Eliminate the Corporate “CAT” and Reward Community Investment: Ohio’s current Commercial Activities Tax (CAT), a gross receipts tax, is widely disliked by businesses – it taxes firms on revenue even if they’re unprofitable (One of the reasons that new business startups and entrepreneurism in Ohio are so dismal), acting as a hidden sales tax throughout the supply chain. We propose to scrap the CAT entirely.

• In its place, businesses would face a straightforward 20% tax on net profits – essentially a flat corporate income tax. However, here’s the innovative twist: that profit tax can be 100% offset (fully credited) if the company donates an amount equal to 10% of its profits to state-approved charities that improve the lives of the poor and working poor. In other words, a business can choose to pay the tax to Columbus, or invest in the community directly through charitable giving – and if they give at least 10% of profits, their tax liability is wiped out. This approach harnesses the private sector’s efficiency and local knowledge in helping those in need, rather than routing everything through government bureaucracies. Charitable donations are voluntary acts of goodwill – true charity is only moral when not coerced – but here we align voluntary charity with self-interest, since businesses can “do well by doing good,” earning goodwill in the community and tax relief simultaneously. Of course, to ensure this isn’t abused, the charities eligible for the credit must be vetted (hence state-approved) as legitimate, effective organizations addressing poverty, education, or health – the very areas government aid would target. Instead of a nameless tax, business leaders can take pride in directing funds to, say, a local church shelter or job training program, achieving real outcomes. Those who prefer not to donate will simply pay the 20% tax, contributing to the state treasury as a backstop. Either way, society benefits. This plan essentially says to businesses: we trust you to help build the community – and if you step up, the state won’t double-dip by taxing you on top of it. It’s a partnership, not an adversarial extraction. And unlike the current CAT, a profits tax only kicks in when you’re actually succeeding – a fairer system that will make Ohio far more attractive to employers. (Notably, Ohio had no general corporate profit tax for years after instituting the CAT; reintroducing one with this charitable escape clause ensures we don’t punish companies that are socially responsible.)

• Redefining Nonprofits: No More “Charitable” Millionaires: Because our plan leans on private charity to uplift the less fortunate, we must ensure that charities themselves are effective stewards of funds. Too often, large nonprofit organizations become lucrative careers for executives and staff, undermining donors’ intent. We’ve all heard of charity CEOs paid seven-figure salaries while pleading for donations on TV. In fact, among major U.S. nonprofits, it’s not uncommon to find executives making $1 million, $2 million, even $5 million a year, Such extremes are a betrayal of the public’s trust. Even beyond outliers, the median nonprofit CEO salary hovers around $130,000, which means many are paid reasonably – but a significant number rake in much more, particularly at organizations enjoying government subsidies or monopoly status. Ohio should lead the nation in refocusing nonprofits on their mission rather than becoming shadow empires. We propose that any nonprofit operating in Ohio that benefits from tax-exempt status or public grants must adhere to reasonable compensation caps: roughly ten times the state’s median per-capita income for the highest-paid executive, and no more than twice the median income for other management and staff. Given Ohio’s median per-person income (~$35,000 in 2021), the cap would be about $350,000 for a CEO – more than comfortable, and incidentally similar to the U.S. President’s salary. Staff could earn up to $70,000 in base pay, which is ample for nonprofit work, with performance bonuses of up to 20% allowed to reward exceptional outcomes. For “volunteer” roles (often meaning part-time or advisory positions that sometimes come with stipends), we’d cap compensation at about 1.5× the median per capita income ($52,000) with up to 40% in bonuses for significant success. These caps ensure no one is exploiting a charitable organization to get rich. Any nonprofit crying that it can’t find talent under these limits perhaps needs to remember the meaning of “non-profit”. True social entrepreneurs are motivated by mission. And for those truly world-class specialists (say, a renowned scientist heading a research charity) who might warrant more pay, the rules could allow case-by-case waivers given strict justification and board approval – but the default is set firmly toward frugality. By redefining nonprofits this way, Ohio ensures that the charitable contributions from businesses (and individuals) actually reach the people in need, rather than feathering nests. Every dollar a company donates to earn the tax credit must be a dollar spent on program services, not squandered on excessive overhead. This reform will restore public faith in the nonprofit sector as a partner to government in serving the poor, rather than a parallel bureaucracy.

• Sin Taxes and Casino Entry Levies: Funding by Choice, Not Force: A limited government dedicated to freedom has no business micromanaging personal behavior – but it can ask those who engage in harmful or risky behaviors to bear a greater share of the costs. So-called “sin taxes” on products like tobacco and alcohol are already commonplace; we propose giving local communities broad latitude to expand excise taxes up to 150% on cigarettes, vaping products, marijuana, alcohol, pornography, and even illegal recreational drugs.

• This isn’t to play nanny to adults’ choices, but to internalize externalities. These vices often lead to public health expenses, law enforcement costs, or other social ills. If a city or county faces harms from, say, a surge in illicit drug use, they should be able to impose stiff taxes on related paraphernalia or services (imagine a hefty tax on marijuana sales in a county that legalizes it, or fees on adult entertainment establishments). A 150% tax means the sin item costs 2.5× its base price – a strong deterrent, yet still a choice. Those who cannot resist the vice will at least be contributing mightily to public coffers, hopefully offsetting the damage or funding treatment programs.

• Meanwhile, remove the tax on gambling winnings; taking a cut from someone’s jackpot is just another income tax, and one that penalizes the lucky. Instead, we introduce a “door tax” on casinos – essentially an admission fee to gambling venues. This concept has precedent internationally: Singapore, for example, charges locals a steep entry levy (recently about S$150 per day or S$3,000 per year) to discourage excessive gambling by those addicted to gambling. Ohio can implement a much smaller, but meaningful, entry fee. Peg it to our median income: roughly $\frac{$35,000}{1000} ≈ $35 for a day-pass. Perhaps offer a discounted week-pass for triple that ($105), a month for 10× ($350), a 6-month pass for 30× ($1,050), and a full year for 50× ($1,750). The exact amounts can be tweaked, but the idea is that casual gamblers pay a modest fee, and serious habitual gamblers pay a substantial sum up front – a form of self-rationing. This “casino cover charge” would go to the state and local host community. It turns gambling from a tax loophole (where big winners sometimes evade taxes) into a predictable revenue stream anda public health measure. Those truly addicted might think twice if they have to pay $35 every time they step into a casino; those out for an occasional weekend of fun won’t mind a relatively small surcharge on their entertainment. In effect, it asks gamblers to support the public budget directly for the privilege of using a facility, rather than taxing their winnings after the fact. It’s straightforward, hard to evade, and lets winners keep what they earn in the game. And if any casino complains, note that Singapore’s casinos still thrive despite a far heftier levy– because tourists and occasional bettors (who are exempt or unimpacted) provide plenty of action. Ohio would become a much more attractive gaming destination, but with a cushion of revenue drawn from the activity - yet protect Ohioans addicted to gambling.

• Lotteries: Curbing the “Stupidity Tax” on the Poor: State-run lotteries have often been called a “tax on hope” or more bluntly a “tax on the poor,” because they disproportionately lure those of lower income into wasting money on astronomically low-odds games. While lottery proceeds do fund things like education, it is a perverse funding mechanism that effectively exploits our most vulnerable neighbors’ dreams of a lucky break. If we truly believe in personal responsibility and uplifting the poor, we should reform the lottery system even as we use it for revenue. Our proposal is to set a minimum price of $4 per lottery ticket, double the typical $1–$2 cost for many games. Of that $4, fully $2 would go directly to the State’s public coffers (earmarked for education, or perhaps to a special fund for poverty alleviation). Yes, this is a large “tax” portion – 50% of the ticket – far higher than the ~30-35% that currently goes to Ohio’s Lottery Profits Education Fund. The effect is twofold: it significantly boosts revenue per ticket (helping replace lost property tax funds) and discourages the poorest would-be gamblers from playing as frequently. Someone who might impulsively spend $10 on five $2 scratch-offs might think twice about spending $20 for five $4 tickets, perhaps buying fewer or none at all. And that’s exactly the point: we don’t want those struggling to waste their scarce dollars on false hope. By raising the cost of entry, we introduce a small barrier that filters out some habitual play, ideally nudging would-be players to save or spend their money more productively. At the same time, those who do play contribute more to the state per play. We maintain individuals’ freedom to play – we’re not banning the lottery – but we make it less exploitative. Think of it as a “voluntary tax” on gambling entertainment, one that the well-off won’t mind and the not-so-well-off will be gently dissuaded by. Over time, this could reduce the lottery’s regressive impact while still funding schools. In fact, the extra $2 could be explicitly channeled to scholarships or programs benefiting low-income communities, turning a vice into a virtue in outcome.

• Productivity Over Speculation: A Progressive Vacant Land Tax: Finally, to ensure that our no-property-tax regime doesn’t inadvertently reward land hoarders and speculators who let assets sit idle, we introduce a progressive tax on unproductive commercial property. Under our plan, any actively used commercial or industrial property – whether a factory, a store, an apartment building, or a farm – pays no recurring property tax at all. This zero-tax policy for productive property is a strong incentive to invest and do business in Ohio: build something, start an enterprise, and you won’t be punished just for owning the property. However, if a parcel of commercial land or a building sits vacant and unused for more than two years, it’s clear the owner is not contributing to the economy or community with that asset. In such cases, beginning in the third year of vacancy, the property would incur an annual tax equal to 1% of its market value, and this rate would increase by another 1% each additional year the property remains vacant and unproductive, up to a cap of 20% per year. This is essentially a use-it-or-lose-it push. For example, a vacant warehouse valued at $500,000 that has sat empty for 3 years would pay $5,000 in that third year; if it’s still empty the next year, the tax becomes 2% ($10,000), then 3% ($15,000), and so on. If an owner stubbornly holds a property vacant for 10+ years, they’d be facing five or six figures in yearly taxes – a strong motivator to either develop it or sell it to someone who will. The goal is not to raise revenue per se, but to spur development and prevent blight. Empty, decaying properties drag down neighborhoods and generate no jobs or commerce. This progressive vacancy tax flips the script: landowners are rewarded for productive use (zero tax) and penalized for squatting on idle assets. It’s a targeted approach that upholds the rights of property owners with responsibility. No one loses their land outright – they simply must pay if they choose to keep it barren for lengthy periods, because that imposes a cost on the community (lost opportunities, eyesores, lower economic activity). Notably, this is akin to a mild form of land value tax that economists from Adam Smith to Henry George praised: taxing unimproved land value to encourage efficient use of resources. For Ohio, it ensures that eliminating the annual property tax won’t lead to speculative bubbles of land ownership with no development. Productive enterprise is prized; stagnant wealth is nudged into action. And local governments, to the extent they collect these vacancy taxes, can reinvest the funds in redevelopment efforts, creating a virtuous cycle of renewal.