Tax Nonsense Coming Your Way

In the coming weeks, Wisconsinites will be inundated with misinformation, bad math, and assorted ideological drivel from snake-oil salesmen purporting to be experts on taxes. You can expect to hear from the groups ranging from the phony "non-partisan" Tax Foundation to our own Wisconsin Manufacturers & Commerce (WMC).

The theme will be simple and misinformed. The public will be told that sometime in early May they are finally working for themselves, that until then, their year's income went to government. Wisconsinites will be reminded that while residents of other states will heave earned enough to pay the tax bill by April 22nd or 23rd, Badger state residents will be working until at least the first of May for the governement.

We will be told that in Wisconsin we suffer the seventh or perhaps, the fifth highest tax burden in the United States.

And the facts are:

• All of these studies are flawed, badly flawed. When it comes to total government revenues Wisconsin ranks around 23rd or 25th, depending upon which study you use. Wisconsin collects very little of its revenues in fees and these studies do not include that less progressive revenue collection. Other states may have lower tax collections than Wisconsin but their heavy reliance on fees takes a bigger bite from the taxpayer.
• Theses studies never look at results  -the quality of the public service.
• These studies never examine the externalities of public service. The city of Madison operates Monona Terrace at a loss. But while the revenues do not show up in the Monona Terrace ledger, the facility brings in hundreds of thousands of dollars in sales taxes and tens of millions of dollars that stimulate the regional economy.
• These studies overlook obvious differentiations between governments. For example, a comparison of per capita spending between Milwaukee and Madison is meaningless unless the author factors in that public transit is in the Madison municipal budget, while in Milwaukee, the county operates the transit system.

Comments

[Ron]

However you want to sugarcoat it, we are still working almost 5 months just to pay taxes. What do you advocate for? 6 months? 7 months??

[snowbeltliberal]

I'd like to see a similar sort of disingenuous nonsensical "analysis" being publicized for health care costs. How far into the year do Americans work to pay health care premiums, co-pays, OTC medicines, and the tax portion of it (Medicare, Badger Care)? "Tax freedom day" get people riled up about taxes. I imagine it would have the same consciousness-raising effect for health care costs.

[Ronald]

Ron,

I don't know what you're talking about. It's not even four months, let alone 5 months.

Snowbeltliberal,

The Tax Foundation report actually looks at how much is spent on healthcare.

Paul,

With regards to the "phony" nonpartisan label, I think if you'd look at their website, you'll find that they do their fair share of criticizing conservatives. They've written against almost every tax credit that conservatives favor, have criticized the idiocy that is "tax cuts pay for themselves," have gone after tax preferences for real estate, health care, housing, film, and others, and have criticized at least once every Republican presidential candidate, including McCain's economic plan released yesterday.

With regards to the quality of the services, that's not what a tax burden measure is supposed to do. Your point is irrelevant. By your argument, the liberal Urban-Brookings Tax Policy Center who does measures of the federal tax burden by income class, is flawed because they don't account for the services they get from the federal government in return. I don't see you criticizing them.

On the issue of revenues, one of the problems is that not all of the revenues are paid for by residents of Wisconsin...some of them are paid for by out-of-staters. And the same for Wisconsin residents who pay taxes to other states. With regards to the definition of a tax (i.e. non-revenue sources), that is a valid point.

[Peter]

John McCain put out an economic plan? Huh. Heard nothing about it. Which is probably about right. Like any free marketeer conservative, the "plan" for an economy is to do nothing. Regardless of what common sense, history, economics, or otherwise states.

But back to the nature at hand. Taxes in Wisconsin...

If one wants only to talk about the revenue side of fiscal policy, that's fine. In fact, I think it's a far more damning critique of modern Republicanism and conservatism (one and the same). More of the tax burden falls upon wage-earners and middle-/lower-income than on the wealthy. Corporations pay little to nothing in real terms. Our tax revenue in Wisocnsin is totally out of whack.

The non-partisan, but progressive, Institute for Wisconsin's Future has done some awesome work on this. Probably better than anyone.

When the wealthiest and most powerful (the few) pay comparatively very little, and when corporations essentially shirk their entire tax duty and responsibility - beyond the pale and not just what I would prefer - we end up with a tax system that is both incredibly unfair and inadequate in terms of bringing in needed revenue.

But it's just as foolish to talk about fiscal policy in the revenue or expenditure side vaccuum. We need to drastically re-order how we do revenue and expenditures both - and conservatives are pretty much wrong on both. Progressives have it right.