State Senator Mary Lazich (R-New Berlin) represents parts of four counties: Milwaukee, Waukesha, Racine, and Walworth. Her Senate District 28 includes New Berlin, Franklin, Greendale, Hales Corners, Muskego, Waterford, Big Bend, the town of Vernon and parts of Greenfield, East Troy, and Mukwonago. Senator Lazich has been in the Legislature for more than a decade. She considers herself a tireless crusader for lower taxes, reduced spending and smaller government.
Those are daunting questions, considering all levels of government, federal, state, and local spent $4.1 trillion during 2007. Approximately two-thirds of your taxes go to the federal government with the remaining third going to state and local governments.
Using data from the U.S. Commerce Department’s Bureau of Economic Analysis, MSNBC.com crunched the numbers to calculate how your taxes are spent.
The largest chunk of tax dollars, 22 percent goes toward income security that includes Social Security, welfare, disability payments, and unemployment insurance. The next largest expenditure, 20 percent goes for health care that includes Medicaid and Medicare. A significant 42 percent of American tax dollars is spent on entitlement programs.
Public safety, including national defense and local police, fire, prison, and court costs make up another 20 percent of taxes.
Then comes education. About 74 percent of taxes spent on education goes toward elementary and secondary schools, with most of the rest paying for colleges, and the remainder for public libraries. Overall, education accounts for 16 percent of your tax dollar.
Since government doesn’t pay taxes, someone has to pay for the cost of government and that, of course is you. When government spends more than it generates in revenue (sound familiar, Wisconsinites?) and resorts to credit card budgeting by borrowing money, there is interest that must be paid. The cost of managing all levels of government takes up another 14 percent of tax dollars, with the largest portion (63 percent) being the interest paid on borrowing. Other government costs include salaries, expenses, and the cost of actually collecting taxes.
That leaves eight percent of taxes that goes to pay for roads, agriculture, airports, air and water quality, the space program, and recreation.
Let’s review how American tax dollars are spent according to the U.S. Commerce Department’s Bureau of Economic Analysis:
INCOME SECURITY: 22 percent
HEALTH CARE: 20 percent
NATIONAL DEFENSE/PUBLIC SAFETY: 20 percent
EDUCATION: 16 percent
COST OF RUNNING GOVERNMENT: 14 percent
MISCELLANEOUS: 8 percent
Finally, who pays what in taxes in America?
A 2007 report by the non-partisan Tax Foundation in Washington D.C. reported:
“In general, households that earn the most income pay the most dollars of taxes. This is no surprise, since income and payroll taxes make up a very large portion of the nation’s tax bill. Overall, the most tax dollars were paid by households in the top income group. They paid an average of $81,933 in taxes—$57,512 to the federal government in Washington in 2004, and $24,421 to state and local governments at home.
Households in the middle income group—which some refer to as the “middle class”—paid an average of $21,194 in taxes, or $13,028 in federal taxes and $8,166 in state and local taxes.
America’s lowest-earning households—those earning less than $23,700 in cash money income in 2004—face the nation’s lowest tax burden. Households in the bottom income group paid an average of $4,325 in taxes in 2004, or $1,684 to the federal government and $2,642 to state and local governments.”
Taxes at all levels of government remain too high, severely impairing income growth, job creation and retention. The best way to get a handle on taxes is to curtail runaway spending.
We will discuss the state Supreme Court race and calls for reforming judicial campaigns.
You can see Up Front with Mike Gousha this Sunday morning on Channel 12 at 9:00 a.m.
Channel 12’s Kent Wainscott interviewed me about Michael Gableman’s victory over Louis Butler in the state Supreme Court race and the call for change in high court elections.
You can see Kent Wainscott’s story here.
With the April 15 deadline for filing income tax returns quickly approaching, the Wisconsin Department of Revenue (DOR) is recommending that taxpayers file electronically.
E-filing will avoid a long wait for a refund.
The DOR offers these tips for taxpayers who choose the traditional method of filing on paper:
• Avoid using commas or cents, and follow examples on the form when printing numerals.
• Double check all math and review tax tables.
• Look over the entire return to ensure it is completely and accurately filled out.
• Sign the return, and include all necessary schedules and supporting documents.
• If tax is due, attach the payment check to the front of the return with a paper clip.
Here is more information from the DOR.
Almost a year ago, on April 2, 2007, I blogged that the U.S. Bureau of Economic Analysis reported during 2006, the rate of growth in Wisconsin income ranked near the bottom compared to all other states. Wisconsin’s per-capita personal income grew 4.3 percent. The national average of per-capita personal income growth was higher at 5.2 percent. Our income growth ranking put us in the bottom 10 states.
I also blogged about a Wisconsin Taxpayers Alliance study that found from 1999 to 2005, Wisconsin’s median household income fell 2.2 percent from $45,667 to $44,650, while the national median rose 13.8 percent from $40,696 to $46,326. Wisconsin ranked 50th in the nation in household income growth during the period. Meanwhile, spending by state and local governments in Wisconsin takes over 20 per cent of your personal income.
You can read my entire blog from a year ago here.
It’s disturbing that the downward spiral of Wisconsin income continues.
Competitive Wisconsin, Inc. (CWI), a nonpartisan group of state agriculture, business, education and labor leaders has released its tenth annual Benchmarks Survey, rating Wisconsin in 33 areas of interstate competitiveness. Seventeen benchmarks changed this year, with eight improvements, and nine declines on some key areas, signaling reason to be concerned about Wisconsin’s ability to compete nationally.
Three benchmarks stand out:
1) PER CAPITA INCOME: Wisconsin’s per capita income, $34,476, is below the national average of $36,629. As CWI reports, “Personal per capita income is often cited as a measure of a state’s relative economic health. Wisconsin’s per capita income also continues to significantly trail that of its neighbors, Illinois ($38,297) and Minnesota ($38,751).”
2) JOB GROWTH: CWI reports, “In 2006, the number of Wisconsin jobs increased 0.7%, a drop from 1.1% in 2004 and 1.2% in 2005. Wisconsin trails the national average of 1.8%.”
3) CREATION OF NEW PRIVATE BUSINESSES: Wisconsin lags behind the nation in this category as well. CWI reports, “The number of new private businesses in Wisconsin dropped 0.4% in 2006, while the number of businesses grew nationally 2.5%. Even more troubling is that all of Wisconsin’s neighbors had increases in 2006.”
The CWI study is the latest in a series of gloomy eye-opening reports clearly demonstrating Wisconsin’s fragile economy is headed in the wrong direction.
Incomes are down. Job opportunities are down. The number of new businesses opening that offer job opportunities is down.
Because hard-working families have less income, their ability to keep financing government’s whimsical spending habits is more difficult. Since families have less, it is imperative government refrain from taxing them more.
Wisconsin is struggling to resolve a $652 million revenue shortfall. The wrong solution is to raise taxes. Wisconsin taxpayers have given so much for so long that they cannot give anymore.
When families have trouble making ends meet, the last thing they do is pull out the Visa card. State government should adopt the same common-sense policy. How many more abysmal reports do we have to read before we realize the time to stop taxing and spending arrived a long time ago?
Here is the CWI report and a CWI press release.