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.
Income tax season is here. This time of the year can be overwhelming and confusing for many people. To assist with the process, the Wisconsin Department of Revenue (DOR) offers the following tips to answer questions about filing returns and preparing taxes.
The state Department of Administration released the Agency Requests and Revenue Estimates for fiscal year 2012 and 2013. The report projects a $1.5 billion gap between expected revenue and agency spending requests through mid-2013. This estimate does not include the $200 million the state has been ordered to return to the Patients Compensation fund. The payback to the Patient's Compensation fund and a federal Medicaid reduction increases the projected gap to $2.2 billion.
The November 2, 2010, statewide ballot in
The details make this issue fascinating. Voters will decide whether the state sales tax in
Proponents say the lower sales tax will increase commerce, create more private sector jobs, and will allow residents to keep more of their own money. Opponents say the tax cut will create a bigger hole in the state’s deficit.
The question will be interesting to watch Election Day given the current mood of voters. The ballot measure reads:
“Do you approve of a law summarized below, on which no vote was taken by the Senate or the House of Representatives before May 4, 2010?
This proposed law would reduce the state sales and use tax rates (which were 6.25 percent as of September 2009) to 3 percent as of Jan. 1, 2011. It would make the same reduction in the rate used to determine the amount to be deposited with the state Commissioner of Revenue by non-resident building contractors as security for the payment of sales and use tax on tangible personal property used in carrying out their contracts.
The proposed law provides that if the 3 percent rates would not produce enough revenues to satisfy any lawful pledge of sales and use tax revenues in connection with any bond, note, or other contractual obligation, then the rates would instead be reduced to the lowest level allowed by law.
The proposed law would not affect the collection of moneys due the Commonwealth for sales, storage, use or other consumption of tangible personal property or services occurring before Jan. 1, 2011.
The proposed law states that if any of its parts were declared invalid, the other parts would stay in effect.
A YES VOTE would reduce the state sales and use tax rates to 3 percent.
A NO VOTE would make no change in the state sales and use tax rates.”
If Congress fails to take action by the end of the year to extend the so-called Bush-era tax cuts, Americans will suffer a big jolt to their pocketbooks. Tax Foundation President Scott Hodge says, "Most federal income tax rates will rise, the estate tax and the marriage penalty will return, capital gains taxes will rise, and more.”
The key question is what will be the direct impact on you, the individual American taxpayer if the Bush tax cuts go away? To supply the answer, the Tax Foundation has created a free online calculator that will inform how your 2011 income taxes will change under the following possibilities:
1) The tax cuts expire.
2) The tax cuts are extended.
3) President Obama’s budget is enacted.
4) Congress passes a tax bill with a statutory pay-as-you-go provision.
The Tax Foundation provides this example. A married couple filing jointly making $80,000 with two children would pay $2,137 more in federal income taxes next year if Congress fails to extend the Bush tax cuts.
Check out how this issue would affect you personally here.
A construction area near
“That $3.0 billion commitment will be the largest commitment made to any transit project anywhere in the
Those assembled responded with obligatory applause, including then- New Jersey Governor Jon Corzine. Today, Chris Christie is governor, and on October 7, 2010, Christie officially killed what has been reported as
“I have made a pledge to the people of
Fifteen months after groundbreaking for the ballyhooed tunnel, the project funded with billions of federal dollars is dead. Christie’s remarks uncannily mirror the political debate surrounding the controversial $810 million high speed train between
Opponents of the
The cost of the rail line is equivalent to two Miller Parks. The contentious debate about
Because the federal allotment for the rail line is nearly $8-million short of expenses, there is a deficit to the project. The state must find a way to fund nearly $8-million every year for operating expenses.
Job creation claims made by proponents are dubious. The Milwaukee Journal Sentinel looked at the state’s application for the $810 million in stimulus money and reports, “Only 55 permanent jobs would be created to operate and maintain the trains, tracks and stations, starting in 2013, per the application.”
Sensing growing opposition to the Milwaukee-Madison project, U.S. Transportation Secretary Ray LaHood defiantly responded, "High-speed rail is coming to
A Public Policy Forum poll of residents in
“The state-level opposition is a reminder of the challenge of building a national transportation project in the
Prudence mandates slamming the brakes on high-speed rail in
And now, NJ Governor Christie may have set a precedent with his bold and fiscally responsible move to reject an unaffordable project because his state is broke, he fears cost-overruns, and he knows his state would be responsible for the additional costs. Sound familiar,
Even the pro-rail website alltransit.com concedes, “The problem is that, while (stimulus) money has already been allocated to high speed rail projects in
A hefty amount of cash
We need to follow
The nonpartisan Wisconsin Taxpayers Alliance (WISTAX) provides some revealing data in its latest SchoolFacts report. Among WISTAX’s findings:
Since 1999-2000 (school year), per student spending has risen an average of 4.0% per year.
The increase in spending came in spite of state cuts in school aids and allowable revenue increases.
General (school) aids were reduced 2.9%.
The drop in general school aids resulted in above-average school property tax increases.
Total school levies rose 6.0% in 2009-10, the sixth increase over 5% in the past seven years.
School property tax increases topped 10% in 116 districts, compared to 72 last year.
Another 151 had levies rise between 5% and 10%, versus 115 in 2008-09.
A new development this year was 98 districts that did not tax to the maximum allowable under state law, including 47 that levied property taxes at least 5% under their limits.”
The Heritage Foundation has been carefully analyzing the impact of President Obama’s tax and spending proposals. The President claims he will raise taxes, and the increases will only be imposed on the wealthy.
The implication is clear. President Obama hopes most Americans will have a knee-jerk reaction that the wealthy can afford higher taxes, so why not? The Heritage Foundation says because spending is so out of whack, the president’s plan does not come close to fixing the economy:
“Obama’s current tax hike plan would raise the top two income tax rates from 33 and 35 percent to 36 and 39.6 percent, respectively. This tax hike will take effect on January 1, 2011, if he has his way and will slow the already badly struggling economy. This will keep unemployed Americans out of work longer and suppress the wages of those fortunate enough to retain their jobs. In fact, the higher tax rates Obama calls for will destroy an average of 800,000 jobs per year by the end of the decade and lower incomes by $720 billion over that same period. Over the next 10 years, the Obama tax hikes will take almost $700 billion from taxpayers. That is only 8 percent of the nearly $9 trillion President Obama’s budget adds in debt over that same period.”
The Heritage Foundations reaches the proper conclusion:
“Low tax revenues are not the cause of the debt explosion; spending is. If President Obama and Congress committed to spending reductions, the deficit could be lowered to more acceptable levels without raising taxes a dime.”
Read more here.
A blistering article about the Milwaukee Area Technical College (MATC) by the Milwaukee Journal Sentinel was stunning. However, it was not surprising. The newspaper reports:
The Journal Sentinel also reports, “MATC already sets its property tax rate at the maximum amount allowed, and other revenue options are limited.”
The MATC Board is in the process of formulating next year’s budget that assuredly will include a property tax increase with the question being, the amount increase.
MATC is one of the state’s 16 technical colleges. Consider the total tax levies for the schools. According to the non-partisan Wisconsin Taxpayers Alliance, the technical college tax levies have increased from $251 million during 1992-'93 to $622 million during 2005-'06. That’s an increase of almost 150 percent compared to a 75 percent increase in overall levies during the same time period. The Legislative Fiscal Bureau reports property tax levies for the technical colleges increased to $680.6 million during 2007-08.
Technical college property tax hikes are considered by, voted on, and approved by unelected technical college boards that are free to raise tax levies leaving powerless taxpayers without recourse. The process is the perfect example of taxation without representation.
I support making unelected technical college boards with taxing authority elected bodies that are accountable to voting taxpayers. I also support extrapolating that concept to other unelected boards in the state.
It appears Congress will wrap up its work this week without taking a vote before the November elections on extending the Bush-era tax cuts. The tax cuts are scheduled to expire December 31, 2010. Without a vote to extend the tax cuts, rates would increase on income taxes, estate taxes, capital gains and dividends.
Approval of an extension of the tax cuts is critical. Pete Sepp, Executive Vice President of the National Taxpayers Union and National Taxpayers Union Foundation has compiled ten reasons tax relief needs to be approved for American taxpayers:
1) Failure to extend the tax cuts will result in the worst tax increase in our history.
2) Extending the tax cuts preserves the progressive tax system.
3) The potential tax increases would not be imposed on just the wealthy.
4) Those who wish to end the tax cuts are not sincere about cutting the deficit.
5) Without the tax cuts, a complex tax system would become even more complex.
6) Tax increases have already hurt our middle class.
7) Jobs depend on the tax cuts.
8) Small businesses depend on the tax cuts.
9) Claims of revenue losses from the tax cuts are speculative.
The National Taxpayers Union provides more detail about the significance of this issue here.
Many Wisconsinites reserve great disdain for local property taxes. The largest source of combined state and local tax revenue is the heavily relied upon property tax.
Property tax bills that arrive mid-December fuel heated emotions. Consideration of tax bills should begin months earlier at the time the property tax timetable begins. Keep in mind that state government administers tax laws. Local districts are responsible for valuation and tax collection.
Property assessments are typically completed by the second Monday during May. Local assessors inform property owners in writing at least 15 days prior to the meeting of the Board of Review or Board of Assessors. The written notice includes the amount of the assessment and the time, date, and location of the local Board of Review or Board of Assessors meeting. The notice also includes information about the procedures used to object to the assessment. The Board must meet during the 30-day period beginning with the second Monday during May.
If you object to your assessment and do not agree with the Board’s decision, you may appeal to the Circuit Court, the state Department of Revenue (DOR), or the municipality. Complete details about the appeal process can be found on the DOR’s website.
School districts in
According to the National Tax Foundation in
Forty-six states increased their property tax collections. Four states,
Read the report here.
Nine times residents went to the polls to consider implementing a state sales tax. Nine times voters rejected the idea.
It is stunning
With an increase of $727 million poring into
Stateline reports, “In May, stunned lawmakers listened as the state economist outlined a new, $577 million shortfall in the current, two-year budget — the result of continued hemorrhaging in income tax collections. Last month, the National Conference of State Legislatures released a report showing
What happened to the money from the January tax increases?
The January tax increase ballots provide a lesson, and will be a hot campaign issue this fall in
The Tax Foundation in
“By the term ‘average middle-income family,’ we are referring to the average of the families in the middle 20 percent of the income distribution. This is different from the ‘average family,’ which would have a much higher income level than the ‘average of the middle-income families,’ given the skewed distribution of income.”
If the Bush tax cuts expire January 1, 2011, the average middle-income family in
If the tax cuts are extended, the average middle-income family in
That means sales on clothes and supplies, and 16 states have a back to school sales tax holiday. Eighteen states utilize some form of sales tax holiday.
Stateline.org reports, “
Come August, sales taxes for a brief time are forgiven on items like pencils, notepads, even computers. Budget crisis infested
Two organizations, The Tax Foundation in Washington D.C. and the liberal Citizens for Tax Justice, according to Stateline.org concur on sales tax holidays: “Since the holidays only include special items — school items during back-to-school season, guns and ammunition during hunting season — they still unfairly impose sales taxes on everything else. In other words, they discriminate against consumers who don’t go hunting every fall and don’t have to buy their children notebooks and pencils.”
The Tax Foundation has just issued a new report on the impact of sales tax holidays. Their conclusion: Bad policy that sounds good. The report states:
“Despite their political popularity, sales tax holidays are based on poor tax policy and distract policymakers and taxpayers from real, permanent, and economically beneficial tax reform. Sales tax holidays introduce unjustifiable government distortions into the economy without providing any significant boost to the economy. They represent a real cost for businesses without providing substantial benefits. They are also an inefficient means of helping low-income consumers and an ineffective means of providing savings to consumers. Sales tax holidays do not promote economic growth or significantly increase consumer purchases; the evidence shows that they simply shift the timing of purchases. Some retailers raise prices during the holiday, reducing consumer savings."
Well...I say,The Tax Foundation and the liberal Citizens for Tax Justice can cry me a river. The vast majority of my constituents appreciate any tax break they can get. A sales tax holiday is a more worthy stimulus that the stimulus
Read more from Stateline and the Tax Foundation.
Following approval of a soda tax in
However, the pendulum is swinging. Taking full note, the beverage industry decided to fight back, and successfully killed soda tax proposals in
Stateline.org reports, “In every state where a soda-tax plan has been proposed, it’s been met with a heavily-funded campaign from the beverage lobby to oppose any type of increase. The tactics are unique to each state, but the message is usually the same: Don’t lay the blame for obesity solely on soda.”
Read more here.
The Wisconsin Department of Revenue (DOR) has released general purpose revenue collections (state income, sales, excise, and corporate taxes) from June of fiscal year 2010. Compared to June of fiscal year 2009, collections during June fiscal year 2010 show the following:
Income tax collections are up 4.5 percent.
Sales tax collections are up 2.3 percent.
Corporate tax collections are down 8.2 percent.
Excise tax collections (cigarette, tobacco products) are up 18.7 percent.
General Purpose revenue collections are up 3.9 percent.
Collections to date show the following when fiscal year 2010 is compared to fiscal year 2009:
Income tax collections during fiscal year 2010 are down 2.2 percent compared to the year before.
Sales tax collections during fiscal year 2010 are down 3.9 percent compared to the year before.
Corporate tax collections during fiscal year 2010 are up 26.9 percent compared to the year before.
Excise tax collections during fiscal year 2010 are up 17. 2 percent compared to the year before.
The bottom line: Total General Purpose Revenue collections are flat so far during fiscal year 2010, having increased 0.0 percent compared to the year before.
Here are the numbers.
The economic recovery has yet to arrive. This is not a good time to go on a tax and spending spree.
According to the Wisconsin Taxpayers Alliance, property taxes are taking more from
"Property taxes claimed 4.5% of personal income, the highest statewide share since 1996 (4.7%)."
That follows a property tax increase of nearly 5% over 2009:
Last month I blogged about the new tanning salon tax that is part of ObamaCare.
Several news outlets are now reporting on the inconsistent, arbitrary tax, including the prestigious Wall Street Journal:
“When Jeanne Chamberlain turns up at work, she's going to have to grapple with America's first federal tax on tanning services, a 10% levy designed to help pay for Congress's health-care overhaul.
Ms. Chamberlain runs a video-rental store.
These would normally be unrelated facts, but 20 years ago, Ms. Chamberlain followed a number of her peers in adding tanning services to smooth out the bumps in her Rice Lake, Wis., business. Today, she wants to offer one free tan for every three rentals. Should that freebie be taxed? Ms. Chamberlain doesn't know, and even if she did, she doesn't yet have the software in place to help with the calculations.
It's a universal truth in
The newspaper reports Senate Democrats originally wanted to tax cosmetic surgery to help pay for government health care, however, under pressure AMA, dumped that plan. Indoor tanning salons got burned, instead, to the tune of $2.7 billion over the next decade.
Read more in the Wall Street Journal.
During the 2008 presidential campaign, Barack Obama said this at a stop in
“I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.”
To inform taxpayers of the president’s broken promise, Americans for Tax Reform has produced a clever reminder:
“Americans for Tax Reform presents the ‘Obama Tax Hike Exemption Card’. The card fits neatly in your wallet and contains a list of the tax hikes signed into law by President Obama that violate his tax pledge, as well as a few other taxes that have been threatened: a European-style Value-Added Tax, Cap and Trade taxes, and even a federal soda tax.”
Read more here.
September 12, 2008,
A startling reminder from the Tax Foundation in Washington D.C. Considering property taxes as a percentage of property value,
Using Census Bureau data, the Tax Foundation calculated the median real estate taxes as a percent of median home value for all 50 states. The
The key to reducing property taxes is to control spending. Wisconsin property owners certainly have paid more than their fair share.
Common fiscal sense would dictate that when the federal debt is over $13 trillion, every aspect of
The amount of taxpayer subsidization of abortion is astounding. According to a Government Accountability Office (GAO) report, since 2002, six organizations that promote or perform abortions spent nearly $1 billion ($967.1 million) in taxpayer money during fiscal years 2002-2009.
Elisabeth Meinecke reports on Human Events about the stunning numbers from one of those organizations: “Planned Parenthood’s 2006-2007 annual report, for example, states the organization performed 289,750 abortions in 2006 alone—a year it spent $100 million of taxpayer’s money. It performed 306,310 abortions in 2007, when it spent $97.6 million of federal funds.”
Is this Hillary Clinton’s definition of keeping abortions “rare”?
The Heritage Foundation reported during March 2010, “A CNN poll taken shortly after the House vote (on federal government health care) found that 60 percent of Americans oppose public funding of abortion. One month later, a
Rita Diller, the national director of Stop Planned Parenthood (Stopp), also dug into the GAO report and discovered this eye-opener, written in a column in the Washington Times:
“Planned Parenthood Federation of America's (PPFA) audits show the organization spent just $657.1 million between 2002 and 2008 from federal government grants and programs, but the abortion behemoth's own annual reports show that it took in $2.3 billion from government grants and programs during the same time period.
Since 2009, at least five nationwide polls have confirmed that a majority of Americans consider themselves pro-life. Someone, then, needs to explain to all those people why $2.3 billion in tax dollars have been doled out to an organization that admits to systematically having killed more than 1.8 million pre-born babies between 2002 and 2008 and then reports it only spent $657.1 million in federal dollars.”
The time has come to eliminate all federal funding for abortions.
Here is the GAO report.
My sincere appreciation to Wisconsin Congressman Paul Ryan who was one of the members of Congress that requested this information from the GAO.
Mind-boggling numbers and data highlight the Heritage Foundation’s 2010 edition of "Federal Spending by the Numbers." The staggering report authored by UW-Madison graduate Brian Riedl, the Heritage Foundation’s lead budget analyst, outlines out of control taxing and spending in Washington D.C. with fiscal irresponsibility reigning.
One has to wonder how this idea got by Wisconsin Democrats.
It’s called the bag tax. Fifteen states have proposed charging for paper, plastic bags or both ranging from five cents in Connecticut, Maryland, Massachusetts, New Jersey, New York, and Virginia to 25 cents in Hawaii and the city of Baltimore.
The rationale offered by the bag taxers is that the additional charge will lead more consumers to reject paper and/or plastic and a cleaner environment will result. Like most good-intentioned policies, this one comes up short.
The Tax Foundation in
How is the
Because the intended use of the bag tax is being altered, that makes the additional charge per bag, by definition, a tax as opposed to a fee. Proponents of the charge have preferred spinning it as a fee, claiming those paying stand to benefit. However, revenue collected and results have both been minimal. So the fee is actually a tax, just another means of seeking general revenue.
One of the consequences of a bag tax has consumers rushing to buy paper or plastic bags in bulk. In essence, as the Tax Foundation emphasizes consumers will “purchase products that have the same chance of ill effects as grocery bags.” In
Proponents can be their own worst enemies. Seattle bag taxers oversold the concept, making ambitious pitches that the extra revenue would lead to reduced greenhouse emissions, reduced landfill deposits, and less street and ocean litter.
I suspect that despite the many question marks, bag tax proposals will surface across the country. Read more from the Tax Foundation.
One of the biggest news stories around tax deadline time this year was the growing number of Americans that don’t have to pay federal income taxes.
The nonpartisan Tax Foundation in
Here’s an astonishing fact. The Tax Foundation reports, “There are millions of other Americans who have some income but not enough to be required to file a tax return. The
Read more from the Tax Foundation.
You can check the status via telephone or the Internet. Here are details from the Wisconsin Department of Revenue.
On May 1, 2009, I blogged the list of provisions included in Governor Doyle’s proposal to fully implement
“That is an interesting list. The question I have is this:
How does any of this create sustaining jobs?”
Almost one year later, the National Association of Business Economics (NABE) offers reason for optimism. The NABE reports, “The NABE’s April 2010 Industry Survey confirms that the
Some of the highlights of their survey of 68 members about business conditions:
- Industry demand increased for a third consecutive quarter.
- Expectations for economic growth in 2010 have improved significantly.
- Profit margins expanded for the third quarter in a row.
- Job creation increased for the first time in the past two years of this NABE survey.
- The percentage of firms increasing payrolls rose to 22% from 13% in the January survey.
- The percentage of firms cutting jobs moved lower—from 28% in January to 13% in April.
- The share of respondents expecting their firms to add employees over the coming six months rose to 37%, up from 29% in the previous survey.
Governor Doyle and legislative Democrats increased the state cigarette tax in the 2009-11 state budget by 75 cents.
The Centers for Disease Control (CDC) surveyed data from the 15 states and the
Bob Lang, director of
Clearly, the intent of the 42.4 percent cigarette tax increase was not assisting smokers to quit or preventing individuals from starting. The intent was to balance the budget on the backs of smokers.
Read the CDC report here.
You know how hard you work to manage your money, and you know that you turn a sizable chunk of it over to government. How much do you turn over to the government?
Numerous tax studies abound annually. A simple and relatable report is the Tax Freedom Day report compiled by the nonprofit national Tax Foundation at
Tax Freedom Day is the day Americans earned enough money to pay all federal, state, and local taxes for the year. This year, Tax Freedom Day arrives April 9, meaning average Americans will work over three months to fulfill their tax burden at all government levels.
Each state has its own Tax Freedom Day. National Tax Freedom Day is April 9, 2010; however,
Last week at a state Capitol news conference and during several media interviews about my request for a public hearing on Senate Joint Resolution 62, I referred to penalties for Americans that don’t purchase health care under the approved federal health care legislation. Citizens that fail to pay taxes go to jail. Is that, I asked, what will happen to those refusing to purchase mandated health insurance?
IRS Commissioner Doug Shulman spoke Monday before the National Press Club in Washington D.C, and attempted to minimize one of the key provisions of the legislation, fines for people shunning health care purchases.
"These are not the kinds of things we send agents out about," Shulman told the audience. "These are things where you get a letter from us. Congress was very careful to make sure there was nothing too punitive in this bill."
Chuck Devore, a candidate for U.S. Senate in
You can guess what has happened since the November 2008 vote. Cost estimates are increasing with a one-way fare from
Estimates of ridership, according to Devore who cites a newspaper report, were based on public employees intentionally holding back final projections to help get the ballot project approved.
Devore adds paying back the bonds will be extremely costly.
If all this sounds familiar, it should.
The Legislature’s Joint Finance Committee quickly approved spending $810 million of federal stimulus money for high speed rail between
Specific figures about the cost of fares and ridership are unknown. The Milwaukee Journal Sentinel has reported that only 55 permanent jobs will be created.
Devore concludes his piece on Big Government with this advice:
“As for the rest of
We would be wise to pay attention.
Here is the latest about California high speed rail from the LA Times.
During December 2007, I blogged “Taxes Go Up, People Move Out.” It read, in part:
During the five years prior to the 2000 census, almost 669,000 people either moved to or out of
Individuals with college or advanced degrees were more likely to leave, while those with less education tended to come. Individuals with household incomes above $75,000 left
The huge exodus of wealthy Wisconsinites leaving the state caused a loss of an estimated $4.72 billion in net worth and a loss of $455 million in income over the five years of this study. That means far fewer in-state bank deposits, less stock in
We are losing our best and brightest at a very young age, and we're experiencing retiree flight.”
There is new evidence that taxes are a serious factor considered by the affluent in choosing where to live. Using data from the Federal Reserve’s Survey on Consumer Finances, the Census Bureau and the Internal Revenue Service. the Center on Wealth and Philanthropy at
Here are some of the study’s key findings:
I am extremely disappointed that the legislature’s powerful Joint Finance Committee (JFC) voted along party lines to approve spending over $800-million in federal stimulus money to construct a high-speed rail line between Madison and Milwaukee. Some of the money will also be used to update existing track that connects
The cost of the rail line is equivalent to two Miller Parks. You may recall the contentious debate about
Because the federal allotment for the rail line is nearly $8-million short of expenses, there is a deficit to the project. The state must find a way to fund nearly $8-million every year for operating expenses.
Subsidizing this massive project will jeopardize current and future Wisconsin projects across the state that have been put on hold due to the state Transportation Fund deficit that is exacerbated by Governor Doyle’s numerous Transportation Fund raids.
Job creation claims made by proponents are dubious. The Milwaukee Journal Sentinel reports, “Only 55 permanent jobs would be created to operate and maintain the trains, tracks and stations, starting in 2013, the application says.”
An amendment to conduct a cost-benefit analysis of the project was rejected along party lines.
According to a Legislative Fiscal Bureau memo, “Approval of the Governor’s request for $810 million for the
The rush to judgment on rail will cost the state heavily at a time it can least afford.
Every state in
State governments have options to deal with huge deficits. My preferred route is to cut spending and avoid all tax increases.
Possibly comprehending the anger of taxpayers nationwide, some state officials around the country are attempting to increase revenue without boosting taxes. However, the Washington Times reports they are trying to do so in a sneaky way. They simply call the tax increases something else, even though they are tax increases.
Fee hike? It is a tax increase.
Hunting license increase? Tax increase.
Increased fines? They are tax increases.
A tax exemption that is eliminated? That, too, is a tax increase.
The Washington Times writes, “A report issued in December by the National Association of State Budget Officers (NASBO) and the National Governors Association found that states raised taxes and fees by $23.9 billion in fiscal 2010, nearly tripling the $8.1 billion in such increases implemented the previous year. More increases are likely in the coming year.”
Popular tactics by tax-increasers according to the Times include raising taxes on high-earners and implementing so-called sin taxes.
The trick is then to call the increase anything but a tax. The ploy is called doublespeak that I wrote about during 2007 when Governor Doyle wanted to impose what amounted to a gas tax increase.
Governor Doyle called the tax increase, “an assessment on oil companies,” a prime example of doublespeak since any tax increase on oil companies found to be constitutional would merely be passed on to consumers at the gasoline pump.
A tax is a tax is a tax, no matter the disguise.
Read more in the Washington Times.
The State of the State is historically a speech that is upbeat and optimistic. There’s little positive to say about the state’s current fiscal climate and our immediate future.
The governor should have been brutally honest about the economic problems that still lie ahead and the measures we need to take to climb out of our deficit, the largest in the state’s history. We cannot afford any new spending programs. We need to cut spending and eliminate recent tax increases.
The governor claimed job creation will be his top priority. That is too little too late. The governor should have emphasized job creation in his first State of the State speech, not his last.
The governor bragged about job creation, a slap in the face to the many that are unemployed.
A new health care program was proposed when the state cannot operate existing health care programs without scandal or appropriate oversight.
The governor called global warming legislation a jobs bill when a recent study demonstrated the bill will result in lost jobs and increased taxes and energy costs. A
The governor tried to pass himself off as a champion of the property taxpayer at a time that
Overall, the governor’s speech did little to build the optimism of
I stood in support of Scott Walker with my Republican legislative colleagues today during his speech in the Capitol rotunda. Scott Walker is correct that tax cuts are an essential component of a successful plan to restore
According to the website Stateline.org, 37 governors are delivering State of the State messages knowing they face voters this November. The best advice for the incumbents given dire economic straits is to play it safe and refrain from any bold overtures.
Stateline.org has reviewed the 27 State of the State speeches given thus far finding that “the recession — which many economists believe ended late last year — has not yet turned the corner into a quick recovery for most states. Governors are using their annual speeches to brace state lawmakers and voters alike for another year of deep budget cuts, which will be made all the more difficult because the ‘easy cuts,’ as they like to say, have already been made.”
Governor Doyle is not up for re-election. Therefore, the governor has a golden opportunity to be brutally honest about our true status during his last State of the State speech Tuesday night.
Here are ten items Governor Doyle should openly discuss in a candid, frank manner with the
1) Some experts might be suggesting the recession is over. However, in
2) The latest figures show state unemployment around nine percent.
3) Our deficit is worse than it has ever been in our state’s history. Undoubtedly, the legislature will have to work this year on a budget repair bill. Given our rocky economy, we must act accordingly.
4) The stimulus is gone. The pot that we thought contained magical gold is now empty. It didn’t work. We will not have a similar reserve to fall back on.
5) We cannot afford any new spending programs. The time to make fancy promises that are simply unaffordable is over.
6) We need to cut spending. Families across
7) Eliminate recent tax increases. While people are losing jobs and taking salary cuts, where is new tax money supposed to come from? May I remind everyone of Governor Doyle’s statement during his 2003 State of the State address: "We should not, we must not and I will not raise taxes." In the past, the governor liked to trot out the bullet point that he didn’t raise state income or sales taxes. That’s impossible Tuesday night. Of the many tax increases contained in the 2009-11 state budget, the largest was individual income taxes totaling $529.8 million according to the Wisconsin Taxpayers Alliance.
8) Every fiscal or policy decision should be examined, analyzed, and then be decided upon with the taxpayer, job creation, and the dramatic improvement of our business climate in mind as our top priorities.
9) We must examine ways to shrink the size of government. Stateline.org reports, “Almost every governor’s speech to date has contained references to the need for a smaller and more efficient state government. Washington Gov. Chris Gregoire (D), for example, said she would seek to eliminate 78 boards and commissions and close 10 state institutions, including five prison facilities. Iowa Gov. Chet Culver (D) called on lawmakers to approve efficiencies he said would save taxpayers $200 million a year.”
10) We cannot budget on a wish and a prayer. Stop making fiscal policies based on wild hopes that
Refrain from comparing
Governor Doyle could be more forthright with the
Read more from Stateline.
The Wisconsin Legislative Council provided a briefing Wednesday about global warming legislation to the Senate Select Committee on Clean Energy that I serve and the Assembly Special Committee on Clean Energy Jobs.
My role as a member of the Senate Select Committee is to analyze the complex legislation, gather information, ask questions, and consider the cost and benefits to determine whether the legislation is beneficial to my constituents and to the state of
Several components of the legislation are troubling.
“Fees and assessments” will fund programs. You and I know those are code words for taxes.
There will be a new standard for the percentage of electricity sales that must be from renewable sources. The current standard for electricity sales from 2010 to 2014 is six percent must be from renewable sources and10 percent for 2015 and thereafter. Under the proposed global warming bill,
The legislation would prohibit freight truck drivers after January 1, 2011 from idling their engines for more than five minutes during any 60-minute period that the temperature is above 10 degrees Fahrenheit and below 90 degrees Fahrenheit. Prisoners in
A model parking ordinance would be adopted meaning certain vehicles would be given priority parking spaces.
New efficiency requirements for consumer electronics will result in more expensive TVs, DVDs and iPods.
A Low Carbon Fuel Standard will cause the price at the pump to increase.
The Department of Natural Resources will be given greater authority to create new government programs, rules and regulations.
This massive bill refers to costs and benefits. However, at Wednesday’s briefing, I asked Legislative Council attorneys whether the legislation specifically and clearly defines the meaning of costs and benefits. The legislation does not.
The WPRI reports, “The policies (of the legislation) would cause the state to shed 43,093 private-sector jobs. Annual wages would drop $1.6 billion, with disposable income falling by $1,012 per capita.”
This legislation grants the Wisconsin Public Service Commission a blank check, increases taxes, over-regulates, and costs Wisconsin jobs and businesses during a recession.
You can see the Wednesday power point presentation here.
The 2009-11 state budget signed into law by Governor Doyle that was crafted exclusively by Democrats and primarily behind closed doors authorized the creation of several new regional transit authorities (RTAs).
An RTA managed by members that are unelected and unaccountable to the taxpaying public enjoys wide powers. An RTA may operate a transportation system or provide for its operation by contracting with a public or private organization; impose, by its board of directors adopting a resolution, a sales and use tax in the RTA’s jurisdictional area at a rate not exceeding 0.5 percent; acquire property by condemnation; and issue tax-exempt revenue bonds.
RTAs would administer bus systems and commuter rail lines and be funded via local sales tax. The non-partisan Legislative Fiscal Bureau has reported that a half-cent sales tax increase to fund RTA's would cost about $172 per household a year.
During May 2009, I wrote in a column during state budget deliberations that approved RTAs in the wee hours of the morning:
“Hang on to your wallets, there goes millions of dollars. I vehemently oppose these new taxes and Regional Authorities. Our taxes are high enough, and in our darkest hours while we were asleep, the Grim Reaper swiped our credit cards, big time. Boards and authorities with appointed members having taxing power should end, and new ones should not be created. This is taxation without representation. The power to tax should only come from elected representation.”
High speed rail systems costing billions of dollars have been discussed and light rail could be on the horizon. Commuter or light rail systems are too expensive, fail to attract new riders, and fail to reduce traffic congestion and air pollution.
Against this backdrop, Democrat legislators in
Supporters of the legislation point out that it allows, but does not mandate, the inclusion of
Under the proposed legislation, according to the Legislative Reference Bureau, “an IRTA may generate revenue by imposing a local motor vehicle registration fee, levying a room tax of up to eight percent on the privilege of furnishing hotel and motel rooms to transients, similar to the current law room tax that a municipality may impose, imposing, by the adoption of a resolution by the IRTA’s board of directors, a sales and use tax if approved in a referendum in the IRTA’s jurisdictional area; or charging a membership fee to the participating political subdivisions of the IRTA. “
Because this legislation is problematic for so many reasons, I am in strong opposition.
A report from the Wisconsin Taxpayer Alliance (WISTAX) certainly sounds like good news. WISTAX reports, “Over the past 15 years,
A WISTAX headline reads, “State Tax Rank Out of Top 10 for Second Consecutive Year.”
WISTAX provides its usual thorough and comprehensive analysis. However, I would urge caution before any champagne corks are popped.
WISTAX also reports, “The study was based on Census Bureau figures from 1993 to 2007, the most recent year for which data are available.” That means data from 2008, 2009 and the 2009-11 state budget when
My guess is when the fine folks at WISTAX crunch those numbers, kiss the rosy headlines goodbye.
Here is one way of looking at just how bad the deficit is by using numbers.
A new study by the Tax Foundation In Washington D.C. finds that in order to close our nation’s budget deficit during 2010, federal income tax rates would have to be TRIPLED.
The Tax Foundation reports, “To close the deficit, federal income tax rates for joint filers which today range from 10 percent to 35 percent would have to be increased to between 27.2 percent and 95.2 percent—a tax hike of unprecedented size.
The study’s author, William Ahem says, “If high-income people had to pay a federal tax rate over 90 percent, plus state and local income taxes and other taxes, total tax rates would be well over 100 percent for many households.”
You can read more about the study and other tax issues in the Tax Foundation’s latest edition of Tax Watch.
I have blogged that the National Governors Association and the National Association of State Budget Officers has released the second of its two yearly reports analyzing the fiscal status of the states. “The Fiscal Survey of States” includes financial data from surveys done by Governors’ state budget officers in all 50 states.
Key findings from the survey:
The largest tax increase in the states during fiscal 2010 was in personal income taxes ($10.7 billion).
The increase in personal income taxes came during a recession as the unemployment rate rose above 10 percent.
Tax collections were down. The forecast is that the decline in tax collections will continue for fiscal year 2010. And it gets worse. The survey offers this grim outlook:
"State finances worsened in 2009 and are forecast to decline further during fiscal 2010 and into 2011 and possibly 2012."
You can read my blog that contains the “Fiscal Survey of States” here.
Jim Geraghty of National Review Online offers more analysis in a column about the report with this open:
“State governments know we’re in a recession, and they know you’re hurting. That’s why they’re demanding more from you.”
Here are excerpts from the rest of Geraghty’s piece:
“A new survey of state governments shows that 29 states enacted tax and fee increases this year that are expected to take almost $24 billion from their residents.
How did states get into this mess? Over the past two decades, most states enacted gargantuan increases in spending.
While this year’s tax increases are the worst — by a lot — it’s not as if state tax and fee revenues have declined in recent years. They’ve increased every year since 2002, except for a 2.1 percent decline in 2007.
And this is just state taxes. Local governments are hiking taxes as well.
More tax hikes are coming down the pike.”
Here is Geraghty’s column, “The Highest Tax Increases Ever.”
Despite limited resources and continuing serious problems with delivery of social service program benefits, the state is surging forward with plans to expand existing programs like BadgerCare. Before the state goes any further, I am formally asking the co-chairpersons of the Joint Committee on Audit that I serve on to request that the Legislative Audit Bureau conduct a full review of the BadgerCare program.
Where there’s smoke, there’s fire. We are still trying to figure out all the things that went wrong with Wisconsin Shares, and we still haven’t learned our lessons from the food stamp debacle a few years ago. Writer George Santayana is most famous for his quote, “Those who cannot remember the past are condemned to repeat it.” Santayana’s historic words are especially true applied to recent controversies in
Warning signals that could and should have prevented scandals of today were apparent years ago. During 2003, the Audit Bureau reported that “
Serious errors occurred in the food stamp program, followed by fraud in Wisconsin Shares. A Milwaukee Journal Sentinel investigation turned up astounding levels of fraud in Wisconsin Shares, identifying nearly $750,000 in suspicious child care disbursements. Since then, the Audit Bureau has estimated that fraud and errors cost
Problems continue. Earlier this year, the state created BadgerCare Plus Core, an extension of the BadgerCare Plus program to include adults that don't have children. The state Senate Health Committee that I serve on was informed the waiting list for BadgerCare Plus Core has ballooned to about 7,000 people. The earliest the waiting list applicants would be eligible for insurance would be March 2010 and by then the waiting list could grow to over 20,000.
The Milwaukee Journal Sentinel reports a flood of applicants to BadgerCare Plus Core, about 600-700 has caused backlogs for the new food stamp program, FoodShare resulting in thousands of people waiting months for benefits. The newspaper reports the US Department of Agriculture views
There’s more. At a meeting last month of the state Senate Health Committee that I serve on, DHS announced three options being explored to expand BadgerCare Basic.
Option 1 covers emergency room (ER) visits and applies a Medicaid standard plan cost sharing. Generic drugs have a $3 copayment per script. Total cost: $100.05.
Option 2 limits inpatient hospital to two visits. ER visits are unlimited. There is a $15 copayment for outpatient non-ER services and professional services and $60 for ER visits. Inpatient hospital has a $100 co-payment per visit and generic drugs have a $5 copayment per script. Total cost: $131.66
Option 3 has a $7,500 deductible on all hospital services including ER visits. Once the deductible is reached, all hospital services are covered generic drugs carry a $5 copayment per script, and modest Medicaid standard plan cost sharing applies. Total cost: $106.89.
No matter the option (s) chosen by DHS, problems are sure to follow. Each option would result in another expansion of membership, pressuring an already strained system. Option 2 with its unlimited ER visits would attract applicants in droves. The high deductible provision arguably makes Option 3 the most cost-effective; however an unaffordable increase in members is likely.
The fiscally irresponsible pattern starts with the mantra that people need coverage followed by the argument that people are under-covered. Programs keep getting bloated, never getting smaller. Government falls further and further behind in its attempts to keep promises and then makes the injudicious decision to make more promises, create more programs, and spend more money it does not have.
The options considered by DHS are even more imprudent when the 2009-11 state budget is factored in. The governor and legislative Democrats cut about $600 million from Medical Assistance. DHS continues to struggle with making up for the cut. Their answer is to develop more programs the state can’t afford or administer appropriately. To draft and then seriously consider such options given our current fiscal and human service delivery problems is mind-boggling.
In a letter I sent to Joint Audit Committee co-chairs and the state Auditor requesting an audit of the BadgerCare program, I wrote, “My intent is not to cast blame, or to scapegoat, it is to have the Audit Bureau identify inefficiencies or problems that the Department of Health Services can utilize to assist more individuals properly and effectively. A BadgerCare audit by the Wisconsin Legislative Audit Bureau is preventative medicine to ensure the state does not repeat previous scandals. The outstanding Audit Bureau can make sure the state does not.”
We owe it to the taxpayers to ensure their money is being spent as wisely and efficiently as possible.
I blogged about the need to direct
A better use of our stimulus $$$: Fix our water problems
I repeat: Use stimulus money to clean up
However, The problems go beyond
The New York Times reports:
“More than 20 percent of the nation’s water treatment systems have violated key provisions of the Safe Drinking Water Act over the last five years, according to a New York Times analysis of federal data.
That law requires communities to deliver safe tap water to local residents. But since 2004, the water provided to more than 49 million people has contained illegal concentrations of chemicals like arsenic or radioactive substances like uranium, as well as dangerous bacteria often found in sewage.
Studies indicate that drinking water contaminants are linked to millions of instances of illness within the
The newspaper found violations of the Safe Drinking Water Act in all 50 states.
So again, I say that if the nation was going to spend such an incredible amount of stimulus money, a top priority should have been targeted toward sewer and water.
Instead, we have made a colossal waste of our opportunity.
Kudos to the
The newspaper sifted through a financial report from the Southeastern Wisconsin Regional Transit Authority RTA) and discovered an excerpt it calls, “more than enough to make any citizen explode with a, ‘Say what’?"
Mueller Communications Inc. billed the RTA $1.2 million public relations work done between October 1, 2006 and Sept. 30, 2009. That’s nearly half of the money collected for a state-imposed $2 car rental fee that is funding an RTA study of regional transit options like commuter and light rail.
Have you grumbled, ‘Say what’ yet?
The newspaper correctly emphasizes that the problem is governmental agencies and bodies should be their own public relations machines rather than forking out, in this case, $1.2 million for materials the RTA could have and should have generated itself.
The Journal Times writes, and I concur:
“This is the type of expenditure which fuels cynicism about government's ability to control expenditures and generates remarks about gorging at the public trough.”
From the past.
“The latest news reports indicate Congress is poised to approve the $825 billion stimulus package. Some see the package as the savior for state governments suffering from massive deficits. That won’t be the case…….a stimulus package would fail to come close to resolving the budget woes of the states.”
From my January 27, 2009 blog, “Congress does not have the magic wand to help the states.”
“What happens, though, when this one-time money, and it is important to note that this is one-time money, dries up? What happens when it is all gone and our needs and wants continue? Using it to prop up our budget would be like using lottery winnings. Once the winnings run out, the expenses remain and we simply face the same problem in two years, only without the same one-time money.”
From my February 25, 2009 blog, “State stimulus package a budget gimmick that won’t work.”
The Wisconsin Taxpayers Alliance (WISTAX) examined the state property tax relief system and found that during fiscal year 2007, of all state-local revenue collected, 60.5 percent was collected at the state level and only 39.5 percent was collected at the local level. Meanwhile, state spending comprised only 41.8 percent of all state-local expenditures. Local governments spent 58.2 percent.
As WISTAX writes, “Put another way, state government accounted for 60.5% of all revenue collected here but only 41.8% of all spending. Conversely, local governments raised only 39.5% of total revenue but did 58.2% of all government spending. Either way (60.5 - 41.8 = 18.7 or 39.5 - 58.2 = -18.7), there was an 18.7 point gap between where monies were raised and spent.”
Some states, including
One of the ramifications of this tax increase is that wealthy residents will pack up and move, taking their investments, job creation capabilities, and charitable donations with them.
Jacking up taxes for the wealthy may sound appealing, even fair to some. However, as Edwin Feulner, the president of the Heritage Foundation emphasizes, almost half of Americans don’t pay income taxes. It makes sense that at the same time, about half of Americans feel the amount they pay in federal income taxes is about right. As Feulner writes in a recent column, “If you’re paying nothing, that probably does seem like a good deal. Even if it isn’t either fair or sustainable.”
The percentage of taxpayers is declining while spending continues to increase sharply. Feulner writes, “When government gives people cash and programs that cost more than they pay in taxes, most of them will favor ever bigger spending and more government. Who doesn’t love a ‘free lunch’? And, having had one today, who wouldn’t want one tomorrow, next month -- indeed, every day?”
At some point, Feulner concludes the wealthy that are already paying their fair share and then some, will decide that enough’s enough.
Read Feulner’s column here.
I have blogged several warnings about the negative ramifications for
One of the major provisions in the 2009-2011 state budget put together and approved by Governor Doyle and legislative Democrats was the immediate elimination of the QEO. The result is devastating for taxpayers, especially as we remain trapped in the throes of a recession.
The Milwaukee Journal Sentinel reports, “
The news media is focusing on reduction in state aid. However, it is undeniable the QEO has kept property taxes from being even worse in
A new report by the nonpartisan Tax Foundation in Washington D.C. highlights state and local government spending priorities.Spending is broken down into ten specific categories:
A new study shows the impact of government health care reform on private health insurance would be quite costly.
“1) Insurance market reforms and consumer protections that would raise health insurance premiums for individuals and families if the reforms are not coupled with an effective coverage requirement.
2) An excise tax on employer-sponsored high value health plans (or "Cadillac plans") that in a few years could also raise premiums for some moderate value plans.
3) Cuts in payment rates in public programs that could increase cost shifting to private sector businesses and consumers. These changes are expected to more than offset the potential reduction in cost shifting resulting from providing coverage to the uninsured.
4) New taxes on health sector entities that are likely to be passed through to consumers.”
Here is what the study found:
“The overall impact of these provisions will be to increase the cost of private insurance coverage for individuals, families, and businesses above what these costs would be in the absence of reform.
On average, the cost of private health insurance coverage will increase:
- 26 percent between 2009 and 2013 under the current system and by 40 percent during this same period if these four provisions are implemented.
- 50 percent between 2009 and 2016 under the current system and by 73 percent during this same period if these four provisions are implemented.
- 79 percent between 2009 and 2019 under the current system and by 111 percent during this same period if these four provisions are implemented.
Earlier this month, I wrote about a new tax on electric bills that could go unnoticed by consumers.
The Milwaukee Journal Sentinel has more, including this line:
“The utility bill surcharge for district attorneys is required by law to end on June 30, 2011.”
History is new taxes are extended. Like so many new taxes, they do not sunset. They are extended and in some cases used for other purposes.
A September 1, 2009 blog is just one of many entries I have blogged about
The word is out about our through the ceiling income taxes. First, the Wall Street Journal took notice. Now, the New York Times has picked up the story.
When two of the nation’s most widely-read and prestigious newspapers proclaim for all the world to see that Wisconsin has such high income taxes, it makes it that much more difficult to attract the best and the brightest and their expertise to relocate or stay here.
Read more from the Wisconsin Taxpayer Alliance.
Here’s a big surprise. From the Reuters news agency:
“The nonpartisan Joint Committee on Taxation reported the (government health care) bill would raise $121 billion in fees on drug companies, health insurers and the makers of medical devices, up from the $92 billion it reported last month.”
This revelation is one of the reasons there could be more delays in Congressional action on government health care legislation.
Suddenly, the federal overhaul of
An old saying in politics says, “The devil is the details.” The axiom is especially true in the current debate in
Montana Democrat Max Baucus chairs the U.S. Senate Health Committee that is working on a federal overhaul of
A condom, classified as a class I medical device by the Food and Drug Administration is, at this point, tax-free. However, government health care proponents have to find ways to pay for their takeover. Since class I medical devices are exempted, class II medical devices are still covered.
That means powered breast pumps used to bottle milk for babies will be subject to the new tax that Washington Times columnist Amanda Carpenter calls, “the new mommy tax.”
The national political blog, Hot Air analyzed the medical devices that would be taxed to fund government health plan. The list includes:
- Dentures, both partial and full
- Fetal cell-screening kit
- Female condoms, single use
- Treponemal syphilis test
- HIV saliva test kit
- Patient data storage and transmission software
- Stair-climbing wheelchair
- Inflatable penis prosthetic
- Hip, knee, ankle, breast prosthetics
- Soft contact lenses, extended wear
- Dialysis catheters
- Dental X-rays
- Sickle-cell anemia tests
Some very alarming news comes from the Wall Street Journal by way of new data from the US Census Bureau about tax collections during the second quarter of 2009. The newspaper reports:
David Vogt of
The Wisconsin Department of Revenue (Page 16) reports:
“Effective October 1, 2009, state, county, and stadium sales taxes and the premier resort area tax are imposed on the sale, lease, license, or rental of specified digital goods and additional digital goods at retail.
Effective October 1, 2009, state, county, and stadium use taxes are imposed on the storage, use, or other consumption of specified digital goods and additional digital goods purchased from any retailer, if the purchaser has the right to use the specified digital goods or additional digital goods on a permanent or less than permanent basis and regardless of whether the purchaser is required to make continued payments for such right.
‘Specified digital goods’ means digital audio works, digital audiovisual works, and digital books.
It sure was great to see popular
However, it is realistic and prudent to question whether
The LA Times notes that in the case of “Public Enemies,” after the tax breaks were dished out that helped offset costs for, among other expenses, Depp’s hair stylist, makeup artist, and two chauffeurs, the net gain was debatable as to its worth.
The nonpartisan Tax Foundation in
The latest rankings are out, with the #1 state being the best state to do business and #50 the worst. The Tax Foundation reports:
“The top 10 states in the 2010 Index, from 1st to 10th, are
“The blame for
The new tax bracket hurts the wealthy that invest and create jobs.
The Tax Foundation writes:
“The ideal tax system, whether at the local, state or federal level, is simple, transparent, stable, neutral to business activity, and pro-growth. In such an ideal system, individuals and businesses would spend a minimum amount of resources to comply with the tax system, understand the true cost of the tax system, base their economic decisions solely on the merits of the transactions,
The Wisconsin Family Council has released a study demonstrating that Congress has the power and ability to raise revenue, increase employment, and stimulate the economy if it moves to repeal the estate or “death” tax. The death tax is a tax on the total worth of an estate and especially hurts small businesses when owners die.
Getting rid of the death tax costs taxpayers nothing. The study incorporates findings from Douglas Holtz-Eakin’s new study, Changing Views of the Estate Tax: Implications for Legislative Options that shows repealing the death tax would create 1.5 million jobs and reduce the unemployment rate by nearly a full percentage point over the next two years. The administration wants to create 3.5 million jobs during that time period. The death tax repeal would get the president about halfway to his goal.
The study says ending the death tax would increase workers’ income by $79 billion.
How much will the federal government in
How much will
And where does most of the money go?
The actual numbers are staggering.
Wisconsin native, UW-Madison graduate and Grover M. Hermann Fellow in Federal Budgetary Affairs in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation, Brian Riedl, analyzed financial data from the Office of Management and Budget and applied it to
Now comes the sticker shock. Riedl found that during 2009,
Here is the breakdown on how $33,880 per household is spent in the nation’s capital:
Social Security/Medicare: $9,418. Employers and their workers split the payroll tax. Unless the number of workers can keep pace with the increasing number of baby boomer retirees, Riedl projects an increase in taxes per household of $12,000 to cover costs.
Financial Bailouts: $6,328. This includes stimulus expenditures and the rescue of financial institutions.
Defense: $5,850. Anything military falls under this category that saw a decrease in spending because Communism fell in the early 1990’s, only to increase again post 9/11.
Anti-poverty programs: $4,745. Half goes to state Medicaid programs. The rest is spent on food stamps, housing and child-care subsidies, Supplemental Security Income (SSI) and low-income tax credits.
Interest on the federal debt: $1,210.
Federal employee retirement benefits: $982.
I have written extensively about
In terms of average tax rate paid, filers in the low-income category paid an average rate of 1.75%, while middle-income filers paid 4.3%. Those in the high-income category paid the highest average rate at 5.52%. Filers at the very top ($200,000 or more) paid an average rate of 5.83%.“
Now is the worst time to consider and approve big increases in taxing and spending given the inability of
Read more from WISTAX.
The nonpartisan Wisconsin Taxpayers Alliance (WISTAX) reports property taxes across the state increased 3.3 percent during 2008. Local governments levied property tax increases of 4.5 percent.
WISTAX also reports, “Technical college levies were up 5.0% in 2009. Since 1999, property taxes for the state’s 16 technical colleges have risen the most, climbing an average of 6.1% per year.”
Un-elected technical college boards impose property tax increases. Board members have no accountability and taxpayers have no recourse.
Read the latest from WISTAX.
During March 2009, I wrote an op-ed piece for the Milwaukee Journal Sentinel that a better use of
“If we cannot use the stimulus money in ways that would actually stimulate the economy, then it should be used on infrastructure. The stimulus money should be used for one-time projects or on projects with a life long enough that they are almost one-time. Here is an example: Wastewater, raw sewage, problems in Lake Michigan and elsewhere in
Our water in various areas of the state is questionably unsafe. Uncontrollable contamination of
How about using the stimulus money to keep raw sewage out of
You can read my column here.
I was very pleased to read Lynn Broaddus’ piece in the Crossroads section of the Milwaukee Journal Sentinel Sunday reacting to the results of a three-year study about discharges into
Broaddus, a local environmentalist responded in her Sunday column, “As in times past, today we again need our leaders to lay the path to safe, sanitary water. There are a number of funding streams, including stimulus dollars, that should be strategically targeted to rebuilding our infrastructure in a way that gives us clean water while hopefully also improving the energy efficiency and resiliency of our water and sanitation systems.”
I wholeheartedly concur. Cleaning up our water systems would be the best use of stimulus dollars, and going after the low hanging fruit by beginning to separate some of the combined sewers using stimulus money is by far the best way to begin addressing safe, sanitary conditions and reduce pollution going into Lake Michigan.
You can read Broaddus’ column here.
One national website used this blaring headline to describe the occasion:
August 12, 2009 was Cost of Government Day, not to be confused with Tax Freedom Day.
Tax Freedom Day is the day Americans will have earned enough money to pay this year’s tax obligations at the federal, state and local levels. In
Tax Freedom Day is bad enough. Cost of Government Day is even worse.
Cost of Government Day is the date of the calendar year on which the average American worker has earned enough gross income to pay off his or her share of spending and regulatory burdens imposed by all levels of government, federal, state and local. Wisconsin’s Cost of Government Day fell on August 12, 2009, the eleventh worst Cost of Government Day among all 50 states
Let’s put Cost of Government Day in perspective. During 2009, you had to work 224 out of the 365 days in the year (61.3 percent) just to earn enough to pay for spending and regulations at the federal, state, and local levels of government, 26 days longer than 2008.
Clearly spending and regulatory costs for all levels of government are increasing at a faster pace than income, creating a heavier burden on working taxpayers. The recession caused by the economic downturn has shrunk income making it far more difficult to pay for continued government taxing and spending
At the federal level, the Emergency Economic Stabilization Act (EESA) that created the Troubled Asset Relief Program (TARP) and the American Recovery and Reinvestment Act of 2009 (ARRA), designed to stimulate the economy and create self-sustaining jobs have failed miserably. The stimulus packages have only served to greatly expand federal spending. According to Americans for Tax Reform, the 2010 budget proposed by President Obama and approved by the Democrat-controlled Congress comprises a record 28.5 percent of the Gross Domestic Product (GDP).
At the state level, the 2009-11 budget signed into law by Governor Doyle spends 9.4 percent more, according to the nonpartisan Wisconsin Taxpayers Alliance (WISTAX). The Legislative Fiscal Bureau (LFB) reports that under the 2009-2011 state budget, property taxes on a median-valued
Locally, municipalities and school districts are considering property tax levy increases, some in double digits.
The president’s intentions to raise the top two income tax rates will have negative effects on the economy. Forcing wealthier Americans to pay even more will slow the creation of jobs, reduce the stimulation to work, and do nothing to shrink deficits.
The Heritage Foundation has analyzed the flawed logic behind increasing taxes for the wealthy and found seven myths.
You may find this hard to believe. Then again, you may not given
As of August 12, 2009, you are no longer working to pay your share of federal, state and local government costs. Wednesday was Cost of Government Day, a stunning reminder of the depth of government spending at all levels.
Read more from Americans for Tax Reform.
There are a number of studies concluding that in other countries, high corporate tax rates tend to depress wages. A new study by the nonpartisan Tax Foundation in
States with high corporate income taxes see the wages of their workers depressed over time. States with lower corporate taxes enjoy an increase in worker productivity and wages.
The Tax Foundation writes the following in its report, “The Corporate Income Tax and Workers’ Wages: New Evidence from the 50 States” that reviewed state data from 1970 through 2007:
“A one percent drop in the average tax rate leads to a 0.014 percent rise in real wages five years later. In dollar terms, that means wages rise $2.50 for every one dollar reduction in state-local corporate income taxes. The reverse is also true: A one percent hike in the average tax rate leads to a 0.014 percent drop in real wages, or roughly a $2.50 loss in wages for each one-dollar rise
The Legislature’s Joint Finance Committee (JFC) voted along party lines last Tuesday to spend over $47-million to purchase train sets for a high-speed rail system. The committee action is outrageous for a number of reasons.
The price tag is obscene given our recession and continuing state deficit.
There was no bidding process.
The plan was hastily put together by the Doyle administration and rushed through the committee.
The company chosen, Talgo, is from
The decision is final. The full Legislature will not have any say on the matter.
Most importantly, the need for such a rail system is highly questionable.
Read more in the Milwaukee Journal Sentinel and the Wisconsin State Journal.
The legislature’s Joint Finance Committee (JFC) will hold a hearing at 10:00 a.m., Tuesday, August 4, 2009 in Room 412 East at the State Capitol to consider the expenditure of millions of dollars of federal stimulus funding.
The JFC agenda for the meeting includes this item:
“The Department of Transportation requests approval of the use of $48,000,000 in proceeds from general obligation bonding authorized under s. 20.866(2)(up) for the purchase of two train sets for the Chicago-Milwaukee-Madison rail line under s. 85.061(3)(b). If market conditions permit, some or all of these bonds will be issued as Build America Bonds pursuant to the American Recovery and Reinvestment Act of 2009.”
That would be Governor Doyle’s $48-million dollar rail boondoggle.
Here is a JFC memo that includes stimulus spending requests from Governor Doyle.
Take a look at the requests and you will note they are government expenditures to perpetuate existing or new government programs. This remains a major flaw with the stimulus concept: the wrong people are spending the money in the wrong places, failing to create sustaining jobs.
The exorbitant federal stimulus expenditures were supposed to create jobs. Some states are basking in the numbers they claim show that jobs are increasing.
The Associated Press (AP) checked to make sure the bragging was on the level. What the AP found was that there is a whole lot of spinning going on. The AP reports:
We are in trouble if states can’t even perform the simple task of counting jobs.
Read the AP article.
There has been documentation about vast amounts of stimulus money virtually being wasted across the country.
Here is another example. Tens of millions of stimulus dollars are being spent on bathrooms, everything from outhouses to facilities in national forests.
Nice restrooms are always a plus. However, a major problem with the expenditure of stimulus funds is that government is providing the jobs instead of small business, often referred to as the engine that drives our economy.
How does the repairing of aging toilets create sustaining jobs?
Read more in the New York Post.
The expenditure of millions and millions of federal stimulus dollars was supposed to provide a much-needed booster shot to an economic downturn and put Americans back to work. Stateline.org reports a stunning analysis about how states used their share of the stimulus, not to create jobs, but to plug huge holes in their budgets.
Stateline reports the National Conference of State Legislatures reviewed the stimulus spending in 25 states, including
One Democrat quoted by Stateline seems to understand what critics of the stimulus concept have been arguing from the very beginning.
“What’s the exit strategy when this is over?” asked state Rep. Steven Costantino, a Democrat from
Correct. When that occurs, how will states like
Read more in Stateline.
During April 2008, I blogged that one of the ramifications of a cigarette tax hike is an increase in cigarette smuggling.
The Wall Street Journal (WSJ) reports bootlegging of cigarettes is becoming a much larger issue, leading states to beef up law enforcement. How serious is the problem? The WSJ reports:
Here is astounding evidence the Qualified Economic Offer (QEO) kept property taxes from being even worse than they are in
Waukesha School Superintendent Todd Gray told the Waukesha Freeman research he conducted about teacher salaries in
Fears about the elimination of the QEO may not have been unfounded. School officials are deeply concerned about the effect the loss of the QEO will have on school funding and local property taxes.
Gray says in the short term, arbitrators might be sympathetic to economic conditions. However, he sees struggling school districts in the years ahead.
Read more in the Waukesha Freeman.
Congressional Democrats have found their answer to how to pay for a massive, exorbitant government health care plan: a surtax on big wage earners that would be an anti-stimulus.
The Tax Foundation in
Here are the Tax Foundation details.
The Cato Institute explains why tax hikes on high wage earners is bad fiscal policy.
Unelected boards with vast taxing authority in
I have argued for that change for some time. During February 2006, I wrote a column about this issue:
I am proposing legislation requiring that all appointed boards in
If boards are going to increase taxes, they must be accountable to the people paying taxes. Right now, taxpayers do not have recourse. It is fundamentally unfair and a violation of one of the basic concepts of good, open, clean government. If taxes are going to be increased, the boards should have to stand up and defend the increase and then vote to increase taxes. Finally, they need to face the people that pay the taxes in an election. The concept is called taxation with representation, and one that we should always adhere.”
In another column a year later, I provided the following numbers:
“It appears from all the data, the (tax) increases being hoisted upon taxpayers are substantial. Consider the total tax levies for the state's 16 technical colleges. According to he non-partisan Wisconsin Taxpayers
Talk show host columnist, and author Neal Boortz has some intriguing thoughts about how the stimulus should have been handled. Writing in his latest piece, Boortz agrees with the general concept:
“Clearly, to stimulate our economy money had to be spent.”
Boortz then raises a critical question:
“Who gets to spend the money?”
Recalling that a Texas Congressman suggested a one-month federal income and payroll tax holiday for Americans, Boortz took that idea and proposed extending the holiday to six months.
“Do you remember how much that stimulus bills was? Let’s just call it $750 billion. For the sake of argument let’s accept that this $750 billion had to be borrowed and spent to get our economy cranking again. It seems that $750 billion is almost exactly equal to the amount of federal income, Social Security and Medicare taxes withheld from American paychecks over a six-month period.”
The problem, and Boortz nails it, is that the wrong people were put in charge of spending stimulus money.
“Here are the two possible scenarios our politicians had to work with:
A Wall Street Journal analysis finds great inequities in the distribution of federal stimulus money. Some states with high unemployment rates have received less stimulus dollars per capita. The newspaper reports:
Here is the Wall Street Journal story and a chart comparing the states’ stimulus spending by resident with unemployment rates during February and May 2009.
More and more Americans are losing faith in the spending of federal stimulus dollars. A new Washington Post-ABC News poll shows support is dropping. The Washington Post reports:
“Overall, 52 percent now say the stimulus package has succeeded or will succeed in restoring the economy, compared with 59 percent two months ago. The falloff in confidence has been sharpest in the hard-hit
The uneasiness is being felt across party lines:
“Confidence in the package's effectiveness has dropped from 81 percent to 73 percent among Democrats and from 32 percent to 26 percent among Republicans. Among independents, it has dropped from 56 percent to 50 percent. What was once a clearly positive assessment of the program among independents (56 to 39 percent) is now an almost even split (50 to 47 percent).”
I am not surprised.
There is a growing sentiment in Congress that I support to repeal the rest of the stimulus money.
Sometimes lost in the national news coverage of the federal government assuming control of yet another industry is discussion about an equally significant, if not more so story: the largest tax increase in American history, the cap-and-trade energy tax.
Under the Democrats’ cap and trade proposal, the federal government establishes a specific cap on the amount of carbon dioxide American industries can emit. In order to enforce the cap, a limited number of allowances are sold. Utilities, factories and other businesses regulated by the cap and trade law would be required to submit the appropriate number of allowances determined by the amount of carbon dioxide they emit into the atmosphere annually.
Hundreds of billions of dollars in new costs will be created for American businesses. Care to guess how they will address the huge new expense? Of course, they will pass the costs onto consumers, making cap and trade a large tax on energy. Some
During March of this year, the nonpartisan, nonprofit Tax Foundation in
What kind of financial burden would cap and trade impose on your household? The Tax Foundation has devised the Household Cap-and-Trade Burden Calculator. Calculate the cost of cap and trade to your household here.
I have signed the No Climate Tax Pledge that shows my opposition to any effort to include cap and trade, a huge tax increase, in climate control legislation.
You probably have heard of Tax Freedom Day.
Did you know this Sunday, June 7, 2009 is Friedman Day? Named after the late Nobel-laureate economist Dr. Milton Friedman, it’s the day the American Institute for Economic Research calculates Americans start earning money for themselves rather than paying the government.
Friedman Day comes later than Tax Freedom Day because Friedman Day includes money borrowed by the government to fund spending that isn't covered by tax revenue.
During September 2003, Friedman gave an interview to conservative columnist John Hawkins.
Friedman told Hawkins the following:
“I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it’s possible. I believe the big problem is not taxes. The big problem is spending. The question is, ‘How do you hold down government spending?’ Government spending now amounts to close to 40 percent of national income, not counting indirect spending through regulation and the like. If you include that, you get up to roughly half. The real danger we face is that number will creep up and up and up. The only effective way I think to hold it down, is to hold down the amount of income the government has. The way to do that is to cut taxes.”
Friedman would not be pleased to see the gap between Tax Freedom Day and Friedman Day now stretching almost two months. Investor’s Business Daily explains why in this editorial.
The Wisconsin Jobs Now Task Force that I serve on along with other Republican legislators has been holding roundtable discussions around the state, listening to the expertise and concerns of businesspeople about
As promised, the input from the roundtables has been incorporated into a final report of recommendations to the Legislature to create jobs and stimulate our economy.
Among the report’s recommendations:
Reduce the Personal Income Tax
The Task Force recommends an overall reduction in individual and employer taxes to keep businesses here and attract new businesses and job-creation opportunities to
Repeal 11% Employer Tax Hike Passed in February
The Task Force recommends repealing the new combined-reporting tax and the new tax on custom software.
Freeze property taxes
The Task Force recommends maintaining a strong property tax freeze to reduce the ever-increasing burden placed on businesses looking to expand or trying to attract new employees.
Simplify and Streamline Tax Code
The Task Force recommends streamlining, consolidating, and cutting fees on employers.
Stop the increase in the Capital Gains Tax
The Task Force recommends opposing an increase in the capital gains tax that is in Governor Doyle’s proposed state budget and the budget recently adopted by the Legislature’s Joint Finance Committee.
Reduce the Tax Burden on Expansion/Retooling
Stop the “Brain Drain”
The Task Force recommends creating a business-recruiting team to bring high-tech and cutting-edge industries and startups to
Freeze on new regulations
The Task Force recommends a freeze on all new regulations until the economy improves.
Expediting the permitting process
The Task Force recommends guaranteeing agency permitting responses within a reasonable amount of time.
Help small businesses afford health insurance
The Task Force recommends allowing small businesses to pool together to achieve significant health insurance cost savings.
Guarantee reasonable caps on non-economic damages for medical malpractice cases
The Task Force recommends establishing low long-term caps on non-economic damages.
Stop raids on Injured Patients and Families Compensation Fund
The Task Force recommends prohibiting future government raids on the fund to attract and retain high quality health care providers.
Move Toward Patient-Centered Care
The Task Force recommends that
Don’t repeal the 1995 reforms in Joint-Several Liability statutes
The proposed changes could make an employer who is as little as 1% at fault, 100% liable for damages.
Don’t increase auto insurance costs
Proposed changes will increase auto insurance rates by more than 33% and bring Wisconsin rates from the 3rd lowest in the country to one of the highest, increasing costs on employers, and killing jobs.
Don’t increase the state minimum wage above the federal minimum wage
Don’t adopt proposed changes to Prevailing Wage Law
You can read the final report of the Wisconsin Jobs Now Task Force here.
This is becoming a pattern with the Democrat-controlled state Legislature. While you slept, or as Frank Sinatra once sang, in the wee small hours of the morning, the Joint Finance Committee (JFC) approved tax, fee, and spending increases and major policy changes during the worst budget crisis in
It all took place following days of secret budget negotiations by Democrats that control the JFC held behind closed doors. Dozens of items were considered with little or no opportunity for review by the general public, the news media, and minority Republicans.
A vote on a 67-page omnibus motion crafted in secret Wednesday and most of Thursday was approved by the JFC along party lines Thursday night at about 10:20. Most state residents had already retired for the day. The final vote approving the budget along party lines, 12-4 was taken by the JFC at 5:30 this morning.
Why the mad rush to meet all night and through the early morning hours to ram through such a critical document? The worst kept secret in the Capitol the past few days was that it was critical the budget work be completed in time for a Senate Democrat golf fundraiser scheduled Friday morning at 9:30.
The depth of the assault on taxpayers along with troubling changes in policy is breathtaking. Let’s examine the damage done by the JFC.
Overall spending increases about seven percent. How and why do you increase spending when the state is $6.6 billion in the hole?
A new hospital tax totaling $44 million over two years would include outpatient surgery centers.
A tax on oil companies was approved that could be unconstitutional. Any tax imposed on oil companies would almost assuredly be passed on to consumers via higher gas prices at the pump.
The JFC slashed state spending on schools and local governments by 2.5 percent. The action might lead local municipalities and school boards to raise property taxes. If cuts in state aid to municipalities somehow fail to result in property tax increases, eliminating the QEO certainly will. The JFC voted to end the QEO that has held the line on property tax increases since 1993.
There is yet another raid from the transportation fund, this time totaling $140 million.
The capital gains exclusion on the individual income tax was reduced from 60 percent to 40 percent.
The cigarette tax increase was approved. A sales tax will be charged to all downloaded items including music and books. This is commonly referred to as the iPod tax.
The per child licensing fee for group child care centers and day camps was raised from $10.33 per child to $16.94 per child.
Consumers would be charged 75 cents a month on phone lines to fund police and fire departments.
There is an increase in the minimum amount of auto insurance motorists would be required to purchase if they choose to have insurance.
The JFC increased the time a recipient can be on W-2 from 24 months to 60 months.
Funding Governor Doyle cut from the Wisconsin Shares Program, a program I requested be reviewed by the Legislative Audit Bureau, was restored by the JFC.
A provision to require school districts to transport pregnant teens that live less than two miles from school was approved.
Illegal immigrants would be allowed to acquire driver’s licenses, opening up all kinds of possibilities for voter fraud and convenient access to other government services.
The budget was kind to criminals and felons. It cuts funding for sex offender management by reducing funding related to the GPS monitoring program. The JFC cut GPS monitor funding of sex offenders further than the governor by over $5 million dollars and cut 91.25 positions over the biennium. Criminals with class C through I felonies would be allowed to earn positive adjusted time to go towards early release.
The JFC eliminated current joint and several liability rules. A plaintiff could collect damages even when he or she is more at fault for the injury than any individual defendants, as long as the plaintiff’s liability is not greater than the combined negligence of all the persons against whom recovery is sought.
The above and so much more...
This all transpired under the cloak of darkness while the vast majority of
Early this morning, while you were asleep, the legislature’s Joint Finance Committee, controlled by Democrats, was voting to increase your taxes.
The committee voted 11-5 to create a board that would have the power to impose a one percent sales tax in Milwaukee County. Sales tax revenue would fund transit, parks, and emergency medical services. Milwaukee County’s sales tax rate would, if this plan is approved by the full Legislature and Governor Doyle, increase to 6.6 percent.
The five members of the board that would set a one percent sales tax increase would not be elected by the voting public, and thus, would not have accountability for their actions. They would be appointed by the Milwaukee County Board chairman, the Milwaukee mayor and the governor.
The committee also voted 12-4 to establish a regional transit authority in Milwaukee, Racine and Kenosha counties. A $16 car rental fee would fund the authority. The current fee is $2. The authority would operate a Kenosha-Racine-Milwaukee commuter link that more than likely will be very costly. The nine-member authority, again, would be un-elected. Members would be appointed by the chairmen of the Milwaukee County and Racine County boards, the Kenosha County executive, the mayors of Milwaukee, Kenosha and Racine; and the governor.
As the Milwaukee Journal Sentinel reports, “The structure would ensure that local officials with Democratic ties would get to make appointments to the board while those with Republican links would not. For instance, Kenosha County Executive Jim Kreuser, a former legislator, would get to make an appointment while Milwaukee County Executive Scott Walker – a Republican running for governor next year – would not.”
The Joint Finance Committee also rejected the idea of a requirement that light rail could be built in Milwaukee County only if voters approved.
I oppose the creation of boards or authorities with appointed members having taxing power. This is taxation without representation. The power to tax should only come from elected representation.
Hang on to your wallets, there goes millions of dollars. I vehemently oppose these new taxes and Regional Authorities. Our taxes are high enough, and in our darkest hours while we were asleep, the Grim Reaper swiped our credit cards, big time.
Global warming legislation is moving along in the Democrat-controlled Congress. There is great concern the legislation will be used to include the largest tax increase in American history, the cap-and-trade energy tax.
The Heritage Foundation says, “The $1.9 trillion generated over eight years from a cap-and-trade bill would still be larger than the $1.5 trillion from NASA, the New Deal, and Hurricane Katrina.”
President Obama conceded last year in an interview with the San Francisco Chronicle that under his plan, energy prices would “skyrocket.”
Another economic report card, another horrible ranking for the state of Wisconsin.
The American Legislative Exchange Council (ALEC) has released its 2009 edition of “Rich states, poor states” that ranks all 50 states on their economic policies and performance, and also forecasts the states best equipped to rebound from the rough economy.
Wisconsin has the tenth worst economic performance ranking, dropping 11 spots from last year, and ranks #27 for its economic outlook (A property tax burden ranking of #42).
A press release from ALEC about the report says, “(It) shows how the federal bailout of the states may simply encourage out-of-control spending by states, which is up 124 percent over the last 10 years, without requiring them to make the tough decisions needed to bring about financial stability.”
Co-author of the report and highly acclaimed economist Dr. Arthur B. Laffer said, “States cannot tax their way into prosperity.”
One of the report’s conclusions:
“As budget problems become more severe, states must utilize every cost-saving measure possible to avoid economically damaging tax hikes. Increasing taxes during the current downturn is a non-starter for states that wish to remain competitive. Instead, we hope states will use their current financial problems to put their fiscal houses in order and say no to profligate spending and irresponsible budget practices, which have caused many of the current difficulties.
As lawmakers return to session in 2009, many will be faced with a budget crisis. A handout from Washington, D.C., might seem to help in the short-term, but as many seem to overlook, dollars from Washington rarely come without costly strings attached. Furthermore, a federal bailout would do nothing to address the fundamental problem of a decade’s worth of state overspending. If anything good comes out of the budget problems in the states, maybe it will highlight the key to good budgeting: having the ability to say ‘no.’ Hopefully the next time we face an economic downturn, states will have policies in place to avoid another crisis of their own making.”
On April 1, 2009, the federal cigarette tax increased from 39 cents to $1.01 per pack, resulting in an increase of $6.3 billion according to the Tax Foundation in Washington D.C.
Increased tax revenue will be used for the federal State Children's Health Insurance program. However, there will be a corresponding reduction in the amount of disposable income of residents across America. In Wisconsin, the increase in federal cigarette taxes will be $117,357,576.
Fewer cigarettes will be sold. Cigarette purchases will drop by about 10 percent.
The federal cigarette tax increase also impacts state and local government revenues. Revenue lost by state and local governments in Wisconsin resulting from the 62-cent federal cigarette t ax increase for Fiscal Year 2010 (July 1, 2009 - June 30, 2010) will be $70,919,000.
Governor Doyle’s proposed 75-cent cigarette tax increase would only make matters worse. Under Doyle’s proposed state budget, the state cigarette tax would increase to $2.52 a pack, causing Wisconsin to jump from the 15th highest state tax to the third behind only New York ($2.75) and New Jersey ($2.58). Wisconsin’s total tax, combined with the federal tax increase that went into effect this month would be $3.53.
Read more from the Tax Foundation.
For quite some time, Governor Doyle has embraced the idea of a so-called assessment on oil companies. The public knows quite well that is doublespeak for a tax, a tax that might be unconstitutional, and if enacted, would only be passed on to consumers at the gas pump. Editorial boards are blasting the idea:
The Milwaukee Journal Sentinel
The Wisconsin State Journal
The Racine Journal-Times
The governor is now backing off a bit on his ill-advised oil tax scheme and is, instead, open to the idea of a three-cent increase in Wisconsin’s gas tax.
Wisconsin’s gas tax is already one of the highest in the country. The Tax Foundation in Washington D.C. reports Wisconsin's gasoline tax is variable and stands at 32.9 cents per gallon, the nation's 8th highest.
We do not need an increase in the gas tax. Here is a thought. Maybe the governor should stop raiding the transportation fund and there would not be a need to discuss raising the gas tax.
Stateline reports the total of the budget gaps in all 50 states is now over $200 billion.
As a result, many states, including Wisconsin are making bad choices by increasing a number of taxes and fees.
Read more from Stateline.
This is not good.
The New York Times writes that Special Inspector General Neil Barofksy issued an eye-opening report Tuesday that the price tag for TARP (Troubled Asset Relief Program) has ballooned from $700 billion to $3 TRILLION.
The report describes the bailout program as one of “unprecedented scope, scale and complexity.” It also warns that there is too little oversight, and too little information about how tax money is being spent.
This opens the door for widespread fraud.
You can read more details in the New York Times.
All last week, I blogged about the findings of the Tax Foundation’s 2009 nationwide survey on attitudes of American taxpayers.
Former senior adviser to President George W. Bush, Karl Rove writes in the Wall Street Journal, “It hasn't gotten a ton of attention, but people are fed up with the complexity of their tax code and ready to do something about it.”
Rove is correct. The Tax Foundation conducted its survey between February 18 and 27, 2009 among 2,002 adults (aged 18 or older). One of the questions the Tax Foundation asked respondents was about tax complexity:
“How complex do you think the current federal income tax is?”
The response was a record for the Tax Foundation as 85 percent say the federal income tax is very complex or somewhat complex, up from 83 percent during the tax Foundation’s last nationwide survey conducted during 2007. Only 1 percent say that federal taxes are not complex at all, and 8 percent say they’re “not too complex.”
A subsequent question asked if Congress should reform the federal tax code. Again, it was a record response with 82 percent saying, “It should be completely overhauled” or “It needs major changes.” That is up from 78 percent during 2007. Another 12 percent say that “it needs minor changes” and only two percent say “it is fine the way it is.”
The Philadelphia Bulletin wrote last week:
“One of the most obvious reasons to reform the current tax code is its sheer complexity. The code is over 60,000 pages and includes more than 1,100 forms and supplemental publications. Experts estimate that the total time Americans spend to file all of their paperwork is 6.6 billion hours. Many pay hundreds of dollars annually to pay tax professionals to file their returns, and businesses pay even more. ‘The present tax code is about 10 times longer than the Bible, a lot more complicated, and, unlike the Bible, contains no good news,’ joked former Sen. Don Nickles.”
Here is the complete report on the Tax Foundation 2009 survey.
According to Stateline, the Obama administration has given its approval to $6.5 billion of the $27.5 billion in federal stimulus funding for highways and bridges.
Which state leads the way in number of projects and amount of federal funding?
Is it New York?
Are you kidding?
The correct answer is…..are you sitting down?
Illinois has 249 approved projects and over $606 million in federal funding.
Wisconsin has 43 approved projects and just under $129 million in federal funding.
Stateline reports, “Obama and Transportation Secretary Ray LaHood both represented Illinois on Capitol Hill, but the administration says favoritism didn’t play a role in the state's landing the lion’s share of the projects and funding so far.”
The nonpartisan Tax Foundation in Washington D.C. has just released the results of its 2009 nationwide survey on attitudes of American taxpayers. The survey was conducted between February 18 and 27, 2009 among 2,002 adults (aged 18 or older).
For the first time, this question was posed to taxpayers:
“Currently, most state governments raise revenue through government-run gambling operations, such as lotteries, keno games and video lottery terminals (which offer casino- type games such as poker, blackjack and slots), for the purpose of general government spending. In general, do you favor or oppose such government-run gambling operations?”
Here are the results:
27 percent: somewhat supportive
26 percent: strongly supportive
12 percent: strongly oppose
10 percent: somewhat opposed
I am not surprised that over half of the respondents approve of state-run lotteries. The Tax Foundation reports, “State-run lotteries are the most popular form of commercial gambling in the U.S., with half or more Americans participating in any given year. In 2008, total consumer spending on lotteries was over $60 billion – or $199 per capita– and in 2004 the average American spent more money on lotteries than on reading materials and movie theater tickets combined.”
During June 2008, I blogged that most states, including Wisconsin, are hooked on gambling.
However, I have to wonder what the results of the Tax Foundation survey might have been if there had been a follow-up to their single, very general question about lotteries. For example, what if the Tax Foundation had added a second question like this:
“Would you favor or oppose government-run gambling operations if the social costs associated with this type of gambling exceeded government-run gambling -related tax relief?”
There are tremendous costs to the families of troubled gamblers. There are financial loses. Serious problem gamblers lose or quit their jobs, steal money to support their gambling habit, think about and actually plan suicide, and some even make suicide attempts. Children of problem gamblers develop behavior and adjustment problems suffering from depression, anxiety, and cynicism.
A Wisconsin Policy Research Institute study in 1996 reported the average serious problem gambler imposed costs close to $10,000 upon Wisconsin each year with a total annual social cost impact of over $307 million. That was during 1996. The number of problem gamblers has increased since, so the societal cost has also increased.
A July 2008 audit of the Wisconsin lottery by the Legislative Audit Bureau found that property tax relief totaled $697.9 million over the past five fiscal years, including $160.0 million in 2006-07.
Social cost of gambling: over $307 million/yr
Property tax relief for the latest year available: $160 million
The social costs far outweigh the gain in property tax relief. However, the state gambling genie is out of the bottle and will probably never return.
My blog of January 27, 2009, “Congress does not have the magic wand to help the states,” reported several forecasts that the huge federal stimulus package would not solve the budget crises afflicting all 50 states. We now have hard, cold evidence, at least from one state, that those predictions are true.
New York is the first state to approve a state budget that uses federal economic stimulus money, and look at what has happened. New York accepted its entire stimulus allotment, approximately $7.2 billion. Despite the newfound pot of money, New York raised taxes and layoffs are planned by the state and at schools, local governments, and hospitals.
New York’s budget deficit during January 2009 was $13.7 billion. Stateline reports, “New York’s latest official forecast is for an out-year deficit of $11 billion.”
If New York is any indication, the stimulus package only makes fiscal matters worse for the states.
Read more in Stateline.
When it comes to Americans’ views about taxes, there is a stark contrast between political parties and ideologies.
The nonpartisan Tax Foundation in Washington D.C. has just released the results of its 2009 nationwide survey on attitudes of American taxpayers. The survey was conducted between February 18 and 27, 2009 among 2,002 adults (aged 18 or older).
This year, the Tax Foundation for the first time asked respondents to give their party affiliation from four choices: Republican, Democrat, Independent and Other. Respondents were also asked to identify their political philosophy: conservative, moderate and liberal.
You will note the difference of opinion from the answers given by the various groups.
Republicans are more inclined to believe their federal income tax bill is too high, 61 percent, than Democrats, 51 percent. Independents are at 61 percent.
Two-thirds, 66 percent of conservatives say their federal income tax is too high, moderates, 55 percent, liberals, 44 percent. A slightly higher percentage of liberals, 45 percent believe their income tax bills are just right.
What about the maximum percentage of income that should go to all taxes?
Democrats say 17 percent, Republicans, 14.4 percent, Independents, 14.8 percent. The average percentage for liberals was 18.9 percent, moderates, 15.1 percent, conservatives, 14.4 percent.
Government Services and Spending
Respondents were asked how much they would be willing to pay in a year for all government services.
Republicans would pay an average of $9,985, Democrats, $7,616, Independents, $5,805, moderates, $8,171, liberals, $7,714 and conservatives, $6,668.
Republicans, 46 percent, and Independents, 42 percent, are more likely to support a decrease in services and lower taxes than keeping taxes and services where they are (35 percent for Republicans, 29 percent for Independents).
For Democrats, the numbers are much different, with 44 percent wanting to keep taxes and services where they are, and 21 percent wanting to decrease services and taxes.
More liberals, 35 percent, and moderates, 42 percent want to keep services and taxes where they are than want to decrease services and taxes (23 percent, liberals, 27 percent, moderates).
Over half, 54 percent of conservatives support a decrease in services and taxes, 27 percent want to keep taxes and services where they are.
What about increasing services and raising taxes?
Democrats are more likely to want to do both at 16 percent than Independents, 12 percent, and Republicans, two percent, liberals, 23 percent, moderates, 10 percent, and conservatives, three percent.
Tax Deductions and the Estate Tax
Respondents were asked if they would be willing to sacrifice some deductions in return for an across the board cut in federal income tax rates.
Republicans were more likely to be in support, 51 percent than Democrats, 40 percent and Independents, 45 percent.
More conservatives like the idea, 51 percent than liberals, 40 percent, and moderates, 41 percent.
Respondents were asked if they support the total elimination of the estate tax. Republicans overwhelmingly said yes, 79 percent compared to Democrats, 55 percent. Independents came in at 74 percent. Support among conservatives was 81 percent, liberals, 50 percent, moderates, 65 percent.
Fairness of “Non-Payers” and Wealth Redistribution
Respondents were asked if it is fair or unfair that millions of filers have no federal income tax liability after credits and deductions.Three-fourths, 75 percent of Republicans said all should be required to pay some minimum amount of tax compared to 63 percent of Democrats and 65 percent of Independents, 75 percent of conservatives, 49 percent of liberals, and 67 percent of moderates.
Democrats, 74 percent, and Independents, 53 percent like the idea of higher tax rates for higher wage-earners while 58 percent of Republicans oppose. Liberals, 74 percent, and moderates, 60 percent, support the idea, and 57 percent of conservatives oppose.
The nonpartisan Tax Foundation in Washington D.C. has just released the results of its 2009 nationwide survey on attitudes of American taxpayers. The survey was conducted between February 18 and 27, 2009 among 2,002 adults (aged 18 or older).
As part of the survey, taxpayers were asked if they would be willing, in order to balance the budget, to pay their share of the federal budget deficit. The last time the Tax Foundation conducted this survey during 2007, the figure was $1,789 per individual tax return. This year, due to the federal bailouts, the Troubled Asset Relief Program (TARP), stimulus spending and fiscal year 2009 omnibus spending bills, that figure has increased significantly, 392 percent, to $8,798 per individual tax return.
Care to guess what percentage of American taxpayers admitted they were willing to pay $8,798 in order to help balance the federal budget deficit? Try six percent with 81 percent unwilling, and 12 percent unsure.
The Tax Foundation asked those willing to pay $8,798 an additional question: “If you paid that extra $8,798 in additional taxes, how do you believe today’s Congress would use it?”
About half, 48 percent said the government would use the money to increase spending and not pay off the deficit, and 17 percent believed the government would use the money to pay off the entire deficit. About one-third, 32 percent thought the government would pay off a portion of the deficit and use the rest of the money to increase spending.
I am not surprised American taxpayers are unwilling to pay a huge chunk to fix the budget boondoggle Washington created and proliferated, and that they lack the confidence that Washington would fix the deficit even with the ability to do so.
The Milwaukee Journal Sentinel is running an ongoing series of reports called, “Following the money: How stimulus funds are being spent.”
Today’s article in the series reports that Governor Doyle and other Midwest governors want to use $3.4 billion in stimulus funding to build three high speed rail routes: Chicago to the Twin Cities, Chicago-to-St. Louis and Chicago-to-Detroit. The Chicago to the Twin Cities route would include a Milwaukee to Madison segment.
Here are the details.
Other publications around the country are also keeping track of how your tax dollars are being spent under the stimulus umbrella. Here are a few examples:
$75 million to repave three miles of rough pavement on Interstate 710 in Los Angeles. That is $25 million/mile.
Ohio wants millions, not to build road projects, but to study them.
Beach sand replenishment
Stimulus money for casinos
Bridge connecting two Microsoft campuses
And the kicker: Stimulus jobs going to illegal immigrants
This entire concept is supposed to stimulate the economy and create sustaining jobs? It sounds like America was sold a bill of goods.
The nonpartisan Tax Foundation in Washington D.C. has released the results of a national poll about taxes, perfectly timed for the April 15 tax filing deadline.
Here are some of the findings:
A majority of U.S. adults think that federal income taxes are "too high."
Most say the tax code is complex.
Most say the tax code needs to be revised.
Republicans are more likely to say that their federal income tax bill was too high than Democrats.
Republicans are willing to pay more for services than Democrats.
The estate tax is viewed as the most unfair federal tax.
At the local level, the gas tax is considered the most unfair.
Most adults say that everyone should be required to pay some minimum amount of tax to help fund the government.
There is strong opposition to taxes on food and drink considered unhealthy.
Here are complete details on the Tax Foundation survey results.
MSN Money has an interactive map showing where the states rank on gasoline, cigarette, beer and sales taxes. On three of the four Wisconsin has some of the highest taxes in the nation.
MSN Money predicts there will be a push in many states to increase the so-called “sin” taxes to address budget shortfalls. As MSN Money puts it, “no matter where you live, expect to start paying more.”
You can read more here.
The Wisconsin Petroleum Marketers & Convenience Store Association (WPMCA) has begun a statewide radio campaign against the oil franchise tax proposed by Governor Doyle and legislative Democrats. The ads correctly emphasize that oil companies will not pay such a tax. Instead, the tax would be passed on to consumers.
Click here for links to the two WPMCA radio ads and press release.
Tax Freedom Day is the day Americans will have earned enough money to pay this year’s tax obligations at the federal, state and local levels.
Tax Freedom Day in Wisconsin will also fall on April 13, 2009. That compares to last year’s Tax Freedom day of April 21, 2008.
If that sounds like good news, it depends on your view. Wisconsin’s 2008 Tax Freedom Day was the 14th worst in the country. This year’s Tax Freedom Day is the 12th worst of all the states.
That is the total amount of tax and fee increases in Governor Doyle’s proposed 2009-11 state budget: $1,707,734,400.
The figure was released in a memo I received today from the nonpartisan Legislative Fiscal Bureau.
"We should not, we must not and I will not raise taxes."
Governor Doyle’s 2003 State of the State address
The governor of Illinois is preparing to propose an incredible tax increase this week. The Chicago Tribune reports, “The Tribune has reported that sources familiar with the governor's budget speech on Wednesday say (Governor Pat) Quinn is considering raising the state's personal income tax rate, to 4.5 percent from 3 percent.”
That is a 50 percent increase. Yikes!
Read more in the Chicago Tribune.
According to the nonpartisan Tax Foundation in Washington D.C., corporate income taxes cost the average American household $3,190. The Tax Foundation is running these ads about the burden of business taxes.
Here is the :30 TV ad.
Wisconsin Congressman Paul Ryan, the ranking Republican on the House Budget Committee is calling for significant reform in tax, monetary and entitlement policies. Ryan characterizes President Obama’s federal budget as taxing "work, savings, investment, capital and risk-taking far more than we are today" and "hurting our chances of coming out of this recession robustly."
Ryan spoke with the Manager of Media Relations for the nonpartisan Tax Foundation in Washington D.C. about his reform ideas.
Listen to the Tax Foundation podcast with Congressman Ryan
Governor Doyle re-introduced his hospital tax proposal that was rejected during the 2008 state budget repair bill deliberations. It was included in the governor's budget repair bill that was signed into law last week. Doyle calls it an assessment, however it is a tax that supporters claim will bring in more federal dollars to the state.
Illinois has implemented a hospital tax, and is now experiencing a major problem: the promised federal money has yet to arrive.
The State Journal Register of Springfield, Illinois reports:
“The idea is for hospitals to pay money to the state. That money then is used to generate extra Medicaid funds from the federal government. The result is a cash boost for hospitals and state government.
The first step in the assessment program, however, requires the state to come up with some cash — about $1 billion as of Friday. That hasn’t happened.
Hospital officials throughout the state say the delay has left them in the lurch. They’ve put off large purchases and reduced travel and other expenses, but they say patient care hasn’t been affected.”
Here’s the entire article.
I voted against the budget repair bill and Governor Doyle’s hospital tax that will drastically increase hospital rates.
Last month, I blogged about the national rankings of Wisconsin counties based on property taxes paid using U.S. Census Bureau data. The rankings were compiled by the nonpartisan Tax Foundation in Washington D.C. Here are the top ten counties in Wisconsin and their national ranking.
Property Tax on Owner-Occupied Housing, by County, Ranked by Property Taxes Paid, 2005-2007 Average
The county is listed, followed by Median Property Taxes Paid on Homes, then the national ranking with #1 being the highest in property taxes:
1) Dane County $3,977 46
2) Ozaukee County $3,924 51
3) Waukesha County $3,864 54
4) Milwaukee County $3,544 76
5) Pierce County $3,395 87
6) Washington County $3,372 90
7) Kenosha County $3,363 93
8) St. Croix County $3,245 103
9) Racine County $3,101 114
10) Walworth County $3,013 126
I raise the issue again because the Pew Research Center conducted a national survey asking people what metropolitan area they would most like to live. Certainly weather was a factor in the responses. I believe tax climate also provided a strong consideration for the survey respondents. Let’s examine the top 10 most popular metropolitan areas people would like to live and their property tax rankings by the Tax Foundation:
Property Tax on Owner-Occupied Housing, by County, Ranked by Property Taxes Paid, 2005-2007 Average
The city and county are listed, followed by Median Property Taxes Paid on Homes, then the national ranking with #1 being the highest in property taxes:
1) Denver (Denver) $1,233 811
2) San Diego (SD) $2,633 177
3) Seattle (King County) $3,297 101
4) Orlando(Orange County) $1,918 372
5) Tampa (Hillsborough) $1,967 352
6) San Fran.(SF County) $3,737 65
7) Phoenix (Maricopa) $1,286 760
8) Portland (Multnomah) $2,604 183
9) Sacramento (Sac.) $1,980 348
10) San Antonio (Bexar) $2,212 281
Here is the complete listing.
The Milwaukee Journal Sentinel is reporting that, “A state law that prevented Milwaukee property owners from getting full court review of disputed assessments is unconstitutional. In March 2008, the Legislature passed a law allowing municipalities to adopt ordinances that would prevent property owners who challenge assessments from getting a full-blown court trial if they appealed boards of review decisions. Within weeks, Milwaukee and a few other communities adopted such ordinances. The law allows property owners to seek a review of an assessment but does not permit a new trial on all the issues.”
I cast the lone dissenting vote against the legislation in the state Senate during March 2008 and explained the reason on my blog:
“Property taxpayers in Wisconsin already bear a heavy burden. Stacking the deck against them in court before a hearing even begins, assuming that the assessor is correct, and slapping them with a fee is bad public policy. The Governor should have vetoed this bill.”
This court ruling is a victory for taxpayers who rarely get a chance to celebrate in Wisconsin. Thank you to Judge Jean DiMotto for an excellent court ruling.
During the previous legislative session, I strongly opposed the Senate Democrats’ $15.2 billion government health care plan. As expected, Democrats plan to reintroduce another budget-busting proposal.
State Senator John Erpenbach told WCLO Radio in Janesville there might be some changes, but the enormous price tag remains the same.
While Wisconsin proposes government health care that will result in the largest tax increase in American history, other states are cutting back on health care.