My column for the West Bend Daily News is online. Here it is.
“Wisconsin is a tax hell and we are sick of it. The Legislature has made some attempts to restrain government spending … . As I watch the budget process move forward, I am all but certain that the truth will remain: Wisconsin is a tax hell.”
I wrote those words almost 10 years ago in this space while advocating for a Taxpayers’ Bill of Rights. In the past decade, Wisconsin has turned slightly more fiscally conservative, but when it comes to taxes, the state still burns hot. A recent report from Lt. Gov. Rebecca Kleefisch and Department of Revenue Secretary Rick Chandler serves as confirmation.
Gov. Scott Walker tasked the lieutenant governor and secretary with roaming around the state to collect feedback about tax reform. Over the course of 23 roundtable discussions all over the state to which people of varying perspectives and experiences were invited to participate, the report indicates that five familiar themes bubbled to the top as critical concerns.
The first and most common concern was Wisconsin’s incredibly onerous property tax. Wisconsin’s property taxes have consistently been more than 20 percent higher than the national average for decades and accounts for 40 percent of all taxes paid by Wisconsinites. Many property owners receiving their property tax bills this month are seeing a rare decrease in their property taxes thanks mainly to an infusion of $178 million in state taxes into the technical college system and Act 10, but Wisconsin still has higher property taxes than 45 other states and is the worst in the Midwest.
Income taxes were next on the list of concerns. The Republicans have made some small gains in reforming Wisconsin’s income taxes by reducing the number of brackets and the rates, but the income tax remains a big reason why many high-earners seek employment in states without one. Wisconsin ranks in the top 10 states when it comes to the burden of income taxes.
The issue ranking third from participants in the roundtables was the complexity of the tax code. By a margin of 23:1, participants said that they would prefer lower, flatter rates in lieu of a patchwork of incentives, exemptions, credits, deductions and other devices used by politicians to manipulate behavior through the tax code.
Fourth on the list was how Wisconsin’s tax and regulatory burden adversely impacts small businesses. Small businesses are vital for job growth and entrepreneurship in any state. They can also least afford the expensive taxes and regulations that drastically increase the cost of doing business.
The fifth item on the report’s list finally gets to the root of all of the other problems with taxes in Wisconsin: spending. The roundtables’ participants voiced concerns about the efficiency and cost of government. According to the report, they acknowledged that government costs money, but want to ensure that the taxpayers are getting a good value for every dollar spent.
The report that took a year to build certainly confirmed what most Wisconsinites already knew. We live in a state that taxes, regulates and spends too much. What the report failed to do is make any recommendations as to what to do about it. Perhaps that is because the answer is obvious.
Wisconsin should tax less, regulate less and spend less. But if the Republicans really want to move the needle on these initiatives and make Wisconsin truly a leader, they need to advance some fundamental and seismic reforms.
There has already been some talk of eliminating the state income tax completely. The Republicans should do it.
The state should:
■ freeze property taxes and take a chainsaw to the regulatory structure that shackles Wisconsinites;
■ match massive tax cuts with massive spending cuts;
■ abolish shared revenue as Gov. Scott McCallum wisely advocated years ago;
■ cut funding for transportation;
■ reform the criminal code and cut prison funding;
■ cut the lavish funding for the University of Wisconsin;
■ and continue to reform and cut spending on K-12 education.
One of the reasons that Wisconsin’s government has become so bloated and expensive is because it has enough sacred cows to constitute a herd. If the Republicans hunt the entire herd at once, a few of the weaker ones will be separated.
For those who think it can’t be done — that we can’t cut that much spending — hogwash. According to the Kaiser Family Foundation, Wisconsin has the highest per capita state spending in the Midwest and the 11th highest in the nation. Wisconsin’s state spending is 38 percent higher than the national average.
Somehow the vast majority of other states manage to fund their needs while spending and taxing less than Wisconsin. Many of them do it without a state income tax; without shared revenue; with lower property taxes; and with great schools, better roads and a much stronger state economy.
Walker and the Republican leadership have made a lot of consequential changes to the benefit of Wisconsin and its taxpayers. The voters rewarded them with firm control of the Legislature and the executive. Now is the time to truly transform Wisconsin into a national leader, if only they have the courage to act. Audentis fortuna iuvat (fortune favors the bold).
(Owen Robinson’s column runs Tuesdays in the Daily News.)