Walker Aide Supports Tax Shift

Huh.

Former state budget director Rick Chandler says hiking the sales tax from 5 percent to 7 or 7.5 percent would allow the state to reduce income and property taxes, which rank among the highest in the nation.

“The idea here is to shift the burden to taxes that are less hated,” Chandler told a Monday breakfast gathering hosted by the conservative-leaning Wisconsin Policy Research Institute.

Chandler—who emphasized he was speaking for himself and not Walker—noted that Wisconsin has made some progress on the tax front over the past two decades.

I’m not philosophically opposed to this.  The nice part of the sales tax is that it is collected from more people thus broadening the tax base.  It is also something that people have some control over paying.  If I can’t afford the sales tax right now, I can reduce my spending.  The down side is that people get used to it, so it’s usually less painful for politicians to raise it.

BUT, or shall I say BUT... the only way I could support this is if the other taxes are cut to offset the increase in the sales tax AND overall taxation and spending are decreased.  Tax shifts virtually never work because the politicians always neglect the other side of the equation.  Increasing the sales tax can only be done as part of an overhaul of our system of taxation. 

UPDATE: On the bright side, this is really only a theoretical discussion.  It ain’t gonna happen.

“Governor-elect Walker is going to tackle Wisconsin’s budget deficit by cutting spending. He will not raise taxes, whether that is the income tax, sales tax or corporate tax,” said a statement from Walker spokesman Cullen Werwie.

Walker’s fellow Republicans in the Legislature have also rejected the plan.

“While it’s an interesting idea, it is dead on arrival in the state Assembly,” said the incoming Assembly Majority Leader Scott Suder (R-Abbotsford).