Tag Archives: Taxes

West Bend School District Levies 7.17% Tax Increase

I see a story in the Washington County Daily News today where the West Bend School District has returned to the cloudy language of taxes.

WEST BEND — Good news for property owners in the West Bend Joint School District: the budget is balanced and the mill rate — read: taxes — will not increase from last year.

The district’s mill rate will remain $7.97 per $1,000 of assessed value. Thus the owner of a home valued at $203,000, for example, will pay $1,617.91 in taxes to the district.

There are several factors behind the district’s decision not to raise taxes.

West Bend is a low spending district, and was awarded an extra $299 per student in state aid for the coming year. It does have declining enrollment…

This is the game that the school district and other taxing bodies like to play. They try to pretend that the mill rate is equivalent to tax burden. It is not. For several years, after a lot of public discussion, we finally got the West Bend School District to stop doing this. It looks like they have returned to their old ways.

Here’s the deal… the tax burden is the total money extracted from the taxpayers. If the district decides that they want to extract $40 million from the taxpayers through a property tax levy, they simply divide that amount into the aggregate property values to derive the tax rate – called the mill rate. It is a simple calculation. When it comes to discussing the tax burden, the mil rate and the property values are irrelevant. The tax levy is everything.

In this case, despite receiving an increase in state aid, the West Bend School District is increasing property taxes by 7.17%.

Last year, the school district levied $39,174,600. This year, they are going to levy $41,983,435. That is a 7.17% increase in taxes no matter how you slice it.

The school district is celebrating that they kept the mill rate flat, but that is only because property values in the district have increased thanks to the good economy. They are simply raising taxes at about the same pace as property values are increasing, thus keeping the rate flat.

Why does this matter?

It matters because, despite the proclamations of the school district, the tax burden is increasing for a school district with declining enrollment. For example, let’s say you are a senior on a fixed income living in a house that was valued at $200,000. Your property taxes for the school district were $1,594 last year. After a reassessment, your house is now valued at $218,000. Even though the school district is keeping the mill rate the same, now your property taxes for the school district will be $1,737.46 – a $143.46 increase. Your income didn’t increase. You don’t derive any value from the increased property value unless you sell your house. But you are paying more. Yes, your taxes went up despite the district maintaining a flat tax rate.

The mill rate in meaningless. It is simply a derived number. The levy is everything. The levy is how much money the taxing body is extracting from the taxpayers. And however they want to spin it, the West Bend School District will increase property taxes 7.17% in a single year.

Credit to the Finance Director, Andrew Sarnow, for making this point later in the story:

“Early estimates say they will not give us much more money; in fact, it probably will be a little less,” he said. “So where does the rest of the money come from if they say we can have a little more money per child? Property taxes — which is why our levy is going up about seven percent.”

But property values are growing by about the same amount. This year, the district is worth almost $5.3 billion, which is an increase from the $4.2 billion of value last year. This is growth in size; new residences or

businesses, with a very small increase from homes getting reassessed. If homes were reassessed for a higher value, then the taxation rate does not increase but more money is acquired through taxes. A homeowner’s taxes for everything, not just the school district, would also increase if this were true. But the seven percent increase came largely through growth and not reevaluation.

What I disagree with is the supposition that most of the property value increase is from growth. Some of that is true, but in 2018, the residents of West Bend saw an average property value increase of 12% after a city-wide assessment. The City of West Bend is not the entire school district, but it is the lion’s share of property value.  So if my property value went up 12% and my mill rate is flat, did my taxes go up? yes, they did. And did my income necessarily rise to meet the tax burden? Nope. So the tax burden continues to eat into my disposable income and standard of living.

Rich Lefties Support Wealth Tax

Heh.

A group of nearly 20 wealthy Americans on Monday released a letter asking for all 2020 presidential hopefuls to support a “moderate wealth tax” on the richest one-tenth of the richest 1 percent of Americans.

“America has a moral, ethical and economic responsibility to tax our wealth more. A wealth tax could help address the climate crisis, improve the economy, improve health outcomes, fairly create opportunity, and strengthen our democratic freedoms,” the letter says, as published by The New York Times.

“Instituting a wealth tax is in the interest of our republic,” it continues.

The document is signed by financier George Soros, Facebook co-founder Chris Hughes, heirs like Abigail Disney and others.

The letter calls for the tax revenue to be used in “smart investments for our future,” including addressing climate change, providing student loan debt relief and universal child care, modernizing infrastructure and providing tax credits for low-income families.

Here’s the thing… there is nothing stopping these folks from liquefying their assets and cutting a check to the Treasury Department. But that’s not what they want. They want to tax YOUR accumulated wealth. If you think that they are going to stop at just taxing the top tenth of one percent, you’re nuts. Remember that when the income tax was implemented in 1913, it only taxed people making over $20,000 per year (at 1%, no less). That’s would be people making over $507,000 in today’s dollars. That is, conveniently, less than 1% of income earners in today’s America.

Then, over time, the threshold was lowered and the rates increased. The people who wrote this letter aren’t stupid. They know that. What they want is a wealth tax to be implemented so that it can be eventually expanded to include anyone with any accumulated wealth. It will never end with just the super rich paying it. They are just drying to open the door on a wealth tax by appealing to people’s envy.

So…. no.

Feeling the weight of government

Here is my full column that ran in the Washington County Daily News yesterday.

April 15. A date that lives in infamy. As the date by which all Americans must submit their income tax forms to make sure the government has extracted enough hard-earned money to fund the bureaucracy, April 15 also serves as a good date to contemplate the cost of government. Given that this April 15 is on the cusp of Wisconsin’s biennial budget debate, it is also a good date to look at how much more costly our new governor wants to make our government.

According to the Tax Foundation, Tax Freedom Day in 2019 is April 16. That means that every dollar that every single American earned up until April 16 is needed to pay the nation’s total tax bill of $5.29 trillion. The nation’s total tax bill is more than the nation’s total combined bill for housing, clothing, and food. Big government isn’t cheap. In Wisconsin, Tax Freedom Day comes even later on April 19. The cost of Wisconsin’s government is still more than most states.

If Governor Tony Evers has his way, Wisconsin’s Tax Freedom Day will push later into the year like Illinois or New York. The governor’s budget proposal includes over a billion dollars in tax increases and would increase taxpayer disparity.

When the Supreme Court ruled last year that states can collect sales and use taxes on internet purchases, Gov. Scott Walker and the Republicans neutralized the tax burden for Wisconsinites by offsetting the new sales tax collections with an equal across-theboard income tax cut. Governor Evers would reverse that decision and give the entire tax savings to only those in the lowest tax bracket.

At the same time, Evers’ budget proposes increasing the Earned Income Tax Credit, a welfare scheme paid through the income tax system, and lower taxes in the lower tax brackets. All of these ideas would lower income taxes for those at the lower end of the income scale.

In order to make up for tax decreases to the lower brackets, Governor Evers would increase taxes on the higher brackets by forcing single people who earn more than $100,000 and couples who earn more than $150,000 to pay regular income taxes on their capital gains. This is estimated to increase taxes by $505 million on Wisconsin’s higher earners.

For some perspective, figures calculated by the Wisconsin Taxpayers Alliance show that income filers earning over $100,000 comprise about 12% of all income tax payers, but they pay over 61% of all income taxes in the state. Evers’ budget proposal would continue the effort to foist more and more of the cost of government on an ever smaller group of income earners.

Not content to only hammer individual taxpayers with higher taxes, Evers would also cap the Manufacturers and Agriculture Credit to a mere $300,000 of income for manufacturers. This is projected to result in a whopping $516.6 million in higher taxes on Wisconsin’s manufacturers.

Just in case anyone thought they might escape Evers’ tax increases, he also proposed to increase gas taxes by eight cents a gallon and then index the tax increases to inflation. That way taxes would automatically increase without politicians having to bother going on record to do it with a vote. This would raise taxes another $485 million through the budget term.

Governor Evers has made it perfectly clear how much he would raise taxes if he had the power to do so on his own. As the legislative Republicans formulate their budget proposals, they should begin with the mirror image of Governor Evers’ proposal. The Republicans should start with a billion dollar tax cut for all Wisconsinites and let the Governor try to negotiate from that starting position.

Wisconsin’s tax burden is not good, but it has been improving for the last eight years. Republicans should fight hard to maintain that trajectory for the benefit of all Wisconsinites.

Feeling the weight of government

My column for the Washington County Daily News is online and in print. It seemed appropriate on tax day to take another look at all of the tax increases that Governor Evers wants to impose on us. Here’s a taste:

Governor Evers has made it perfectly clear how much he would raise taxes if he had the power to do so on his own. As the legislative Republicans formulate their budget proposals, they should begin with the mirror image of Governor Evers’ proposal. The Republicans should start with a billion dollar tax cut for all Wisconsinites and let the Governor try to negotiate from that starting position.

Wisconsin’s tax burden is not good, but it has been improving for the last eight years. Republicans should fight hard to maintain that trajectory for the benefit of all Wisconsinites.

 

State should refund tax surplus to the middle class

Here is my full column that ran in the Washington County Daily News yesterday.

The state of Wisconsin has a problem. Thanks to the manufacturing renaissance, economic boom, and record employment fostered by the Republican policies of the previous eight years, tax revenue has been cascading into Madison at record levels. According to the Legislative Fiscal Bureau, this will leave an estimated budget surplus of over $600 million in state government coffers at the end of the current fiscal year.

In a perfect world, the government would do one, or both, of two things with a budget surplus. They would either give the money back to the taxpayers who paid it or pay down some of the state’s outstanding debt. What they should never do is use surplus money as an excuse to spend more.

It is worth pausing for a moment to consider what surplus tax revenue really is. Every tax dollar that is taken from a citizen by the government is a dollar that cannot be used by that citizen for anything else. It cannot be used to pay for the citizen’s food, child care, health care, education, clothing, or housing. It also cannot be used to start a business, support a charity, or saved for retirement. Politicians should treat each tax dollar as sacred because every dollar represents an opportunity seized from a citizen with the coercive power of government.

The Republicans in the Legislature are on the right track with their handling of the surplus. The Republicans are working to pass a middle-class tax cut that would simply give the tax surplus back to the taxpayers by increasing the standard deduction for the income tax for families who earn up to $155,000 and individuals who earn up to $127,000.

It is not a perfect plan because it does not refund the surplus to all of the taxpayers who actually paid the tax. By excluding higher income Wisconsinites from the tax cut, the Republicans’ bill still panders to the vanity of politicians seeking reelection by redistributing tax dollars to a favored subset of the populace — in this case, the middle-class taxpayers. But the Republican tax cut is still elegant in its simplicity and clarity of purpose. It is also far superior to the governor’s plan.

Gov. Tony Evers opposes the Republicans’ plan and has proposed a tax increase in its stead. While the state’s coffers are overflowing with the hard-earned money of Wisconsin’s taxpayers, Governor Evers is proposing a redistributionist scheme whereby he would increase taxes to pay for more welfare and a more restricted income tax cut.

In Evers’ plan, he would jack up taxes on Wisconsin’s manufacturers by capping the manufacturers’ tax credit. Then he would use that money to expand Wisconsin’s Earned Income Tax Credit, which redistributes tax dollars to many people who did not pay income taxes, and provide a modest graduated income tax cut to families who earn less than $150,000 or individuals who earn less than $100,000.

Evers’ plan still leaves about $375 million unfunded, which means it would have to come out of the state budget. Given that Evers has announced plans to support spending increases in every major area of state government, one would presume that he would have to find another tax to increase to pay for the $375 million.

Noticeably, Governor Evers does not factor the surplus into his plan at all. His plan is a straight redistributionist scheme that raises taxes on one group of Wisconsinites to give it to another group of Wisconsinites. Presumably, Evers wants to just spend the surplus on some other spending boondoggle. In other words, Evers has made it clear that he wants to spend every extra dollar sent to Madison and then hike taxes even further to spend more. Fortunately, Wisconsin’s voters elected a Republican Legislature to check Evers’ tax and- spending ways.

The Republicans in the Legislature should pass their middle-class tax cut and surplus refund and put it on Evers’ desk to sign forthwith. Then the taxpayers will see whether our new governor prioritizes his tax and spending increases over refunding the tax surplus to middle class Wisconsinites.

State should refund tax surplus to the middle class

My column for the Washington County Daily News is in print and online. Here’s a sample:

The state of Wisconsin has a problem. Thanks to the manufacturing renaissance, economic boom, and record employment fostered by the Republican policies of the previous eight years, tax revenue has been cascading into Madison at record levels. According to the Legislative Fiscal Bureau, this will leave an estimated budget surplus of over $600 million in state government coffers at the end of the current fiscal year.

In a perfect world, the government would do one, or both, of two things with a budget surplus. They would either give the money back to the taxpayers who paid it or pay down some of the state’s outstanding debt. What they should never do is use surplus money as an excuse to spend more.

It is worth pausing for a moment to consider what surplus tax revenue really is. Every tax dollar that is taken from a citizen by the government is a dollar that cannot be used by that citizen for anything else. It cannot be used to pay for the citizen’s food, child care, health care, education, clothing, or housing. It also cannot be used to start a business, support a charity, or saved for retirement. Politicians should treat each tax dollar as sacred because every dollar represents an opportunity seized from a citizen with the coercive power of government.

The Republicans in the Legislature are on the right track with their handling of the surplus. The Republicans are working to pass a middle-class tax cut that would simply give the tax surplus back to the taxpayers by increasing the standard deduction for the income tax for families who earn up to $155,000 and individuals who earn up to $127,000.

Tax Cut Works Through Assembly

I like the policy and I like the political tactic.

MADISON – A panel of Republican lawmakers advanced a plan to cut income taxes for middle-class families that Gov. Tony Evers has said he would oppose because of the way it’s funded.

The $338 million plan would reduce an average married couple’s income taxes by about $300 and heads to the Assembly floor next week.

But Evers reiterated he wouldn’t support the plan less than two hours after it passed the Legislature’s finance committee 10-3 over the objection of Democratic members.

“Republicans proved today that they’re more interested in protecting handouts for millionaires than providing tax relief for middle-class families,” Evers’ spokeswoman Britt Cudaback said about the Republican plan. “Introducing a competing proposal that uses one-time funds and leaves taxpayers on the hook for millions of dollars in the future isn’t compromise, it’s just fiscally irresponsible.”

But Republican leaders of the finance committee said, “we are delivering a real, middle-class tax cut for Wisconsin families.”

On policy, this is a very simple concept. The State of Wisconsin has a surplus of tax revenue and this would give it back to the taxpayers who paid it. For example, if you overpay for a cup of coffee, you get the surplus back, right? We call it “change.” Evers opposes this simple concept because he doesn’t really want a tax cut. He wants to keep most or all of the surplus and redistribute it back to people he likes. It would be like if you overpaid for that cup of coffee and Barista Evers handed your change to the bum shooting up in the Starbucks’ bathroom. Evers’ policy is neither fair nor right.

On the political front, the Republicans are doing exactly the right thing. Push this tax cut through the legislature and put it on Evers’ desk. Then he will be forced to veto a middle-class tax cut as one of his first acts as governor or let it pass. Hopefully, his better Angels prevail and he gives the taxpayers change for overpaying the cost of government this year.

On guns, taxation, and tyranny

Here is my column that ran in the Washington County Daily News yesterday.

Governor Elect Tony Evers has begun to select his staff and he is choosing people from the far Left of the political spectrum. This indicates that Evers does not have any intention of compromising with the Republican-led legislature. Evers plans to govern from and for the radical Leftist base that elected him. Radical Leftist doctrine dictates that Evers must seek to restrict gun rights and raise taxes. Wisconsin made a lot of progress on both of those issues under Governor Scott Walker, so it is a good time to go back to basics and remember why gun rights and lower taxes are important.

When the Founders of our great nation enshrined the protection of the individual right to keep and bear arms in the 2nd Amendment to the Constitution, they did so for a single reason: to preserve the ability of the people to throw off a government that has become despotic.

When the Bill of Rights was written, the American experiment in self-governance was still in its infancy. The soldiers’ wounds were still healing from the long war of secession from the Great Britain and the dead were still being mourned by their families. Newly minted Americans had paid a heavy price to throw off one despotic government and knew that it would take just as much blood if they had to do it again.

The Right to Keep and Bear Arms does not exist for the purpose of hunting, shooting sports, or even self-defense. It exists, as the Declaration of Independence says, so that, “when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government.” Throwing off a government requires an armed populace, which is why every tyrannical regime in the history of humankind has disarmed its citizens.

Americans are free because they are armed, and they are armed because they are free.

One of the principal powers granted to any government is the power to tax. At its best, a good government will collect taxes from the citizenry and use it for things that are for the general good, and for which the private sector is ill-equipped to do. The obvious things that fit this kinds of use of tax dollars are the military, law enforcement, large infrastructure needs, border enforcement, etc. At its worst, a bad government will collect taxes from the citizenry and use them to enrich favored people, oppress other people, or just waste the tax money. Welfare, corporate cronyism, wasteful government spending, etc. are examples of bad governance.

A totalitarian government can be a good government, but it is illegitimate without the consent of the governed. Conversely, a representative government can be a bad government when a tyranny of the majority fleeces a minority for its own gain.

In a totalitarian government, the power to tax is absolute and people must pay what the autocrat demands, or suffer consequences ranging from confiscation to imprisonment to death. In a representative government, the only difference is that it is not a single autocrat demanding the tax, but the majority of citizens. The consequences of refusing to pay a tax in a representative government is the same as in a totalitarian government.

Governments, whether totalitarian or representative, are the only entity in a civil society with the legal power to commit violence. That violence is directed against enemies of the nation in the form of a military, and it is directed against citizens of the nation who disobey the laws set forth by the government. The power of government is based on applied violence.

Oppressive taxes are not only a drain on our economy and fuel for bad government, but it siphons the ability of individuals to pursue their own happiness. Every dollar a government spends is a dollar that was taken from someone who can no longer use it for their own needs and wants.

Over the next several years, we can expect the Evers Administration to make a strong push to restrict gun rights and raise taxes. State legislators and the citizens of Wisconsin must see through the toxic rhetorical gas and fight for principles of more gun rights and less taxes.

School Districts Fight to Avoid Tax Cut

From MacIver

[Madison, Wisc…] Homeowners in 148 school districts across Wisconsin will be getting an unexpected tax cut next year, but many of those districts would prefer to keep that a secret – and backfill those savings with new spending.

The reason for the tax cut is the termination of the Energy Efficiency Exemption (EEE). This loophole allowed school districts to raise taxes for supposed energy efficiency projects without going to referendum.

The energy savings on many of these projects is negligible. It will be decades before the savings justify the expense – which was considerable. Last year alone, districts collected an additional $92.3 million through the EEE. With the program eliminated, property taxes in those 148 school districts will automatically drop $92.3 million.

However, 21 of those districts see this as an opportunity to downplay the true tax impact of their referendums on next month’s ballot. For example, the Hartford J1 School District has a referendum for $5.5 million. According to the district’s website, “If the referendum is approved, there would be no impact on current school tax rates over the life of the 15-year borrowing term.”

Southern Door County Schools has a $6,270,000 building referendum that “would not increase your taxes over current levels.”

The Edgerton School District has been more transparent about this tactic than most. It’s trying to convince local residents that a $40.6 million building referendum plus a $1.25 million recurring annual operating referendum will only raise their tax rate by less than a dollar. The finance director, Todd Wehner, openly describes this tactic as a “levy opportunity or a levy shelf.”

Close the dark store loophole

Here is my full column that ran in the Washington County Daily News yesterday.

If you are voting in West Bend, be sure to turn over your ballot. Like many municipalities in Wisconsin, West Bend’s voters are being asked to weigh in on whether or not the state Legislature should close the so-called “dark store loophole” in the property tax laws. The question is: “Should the state Legislature enact proposed legislation that closes the Dark Store loopholes, which currently allow commercial retail properties to significantly reduce the assessed valuation and property tax of such properties, resulting in a substantial shift in taxes levied against other tax paying entities, such as residential home owners, and/or cuts in essential services provided by an affected municipality?”

At issue is how commercial properties are valued for the purposes of property taxes. In a pure sense, the value of anything is the price that a willing buyer is willing to pay to a willing seller. For tax purposes, the government must assess what that price might be.

Residential properties are relatively easy to assess. Based on the condition, size and location of a house, the assessor can compare it to similar houses that have recently sold and come up with a reasonable price. Assessing the value of commercial properties is far more difficult and much more subjective than residential properties. There are at least five common, but different, ways to calculate the value of commercial property for tax and accounting purposes.

In Wisconsin, government assessors have generally set the value of commercial real estate based on how much the property is worth based on the property being occupied and generating revenue for the owners. For example, a retail store in a great location that generates millions of dollars for the owners is worth quite a bit to the owner — even if the property would not be worth as much to a different owner.

In recent years, several of Wisconsin’s largest commercial property owners like Walmart, Menards, Walgreens, etc. have been suing municipalities to have the value of their properties lowered based on the “dark store” method of valuation. Under this method, the value of the property is calculated based on what it would be if the store were empty. In other words, the companies want the value of the property to be set at what that they think they could sell it for if they closed up shop and left. Commercial property owners have been winning appeals of their property assessments under this theory across Wisconsin and drastically lowering their property tax bills.

Both valuation methods are equally valid, in an economic sense, but have vastly different outcomes for Wisconsin. As more commercial properties are valued under the dark store valuation method, they are paying far less in property taxes. The result is that local governments must either reduce spending to account for the reduction in taxes being collected, or shift the property tax burden to residential propertyowners.

Let’s look at one small example. In West Bend, Walgreens’ two stores were once valued at $14 million. Last year, Walgreens appealed under the dark store theory and won, thus reducing the combined assessed value of the two properties to $4.8 million. That change in value reduced Walgreens property tax obligation by a whopping $180,000 per year. Each of the local governments that rely on property taxes for funding now have to find a way to fill that hole. Multiply this equation by dozens or hundreds of commercial properties in each municipality in Wisconsin and the hole becomes impossible to fill.

While there are several perfectly rational and valid ways to determine the value of commercial properties, Wisconsin needs to determine a uniform and fair way that will be used for the purpose of property taxes. Closing the dark store loophole is a good step toward that goal.

Close the dark store loophole

My column for the Washington County Daily News is online. Here’s a taste:

At issue is how commercial properties are valued for the purposes of property taxes. In a pure sense, the value of anything is the price that a willing buyer is willing to pay to a willing seller. For tax purposes, the government must assess what that price might be.

Progressive Income Taxes

Oh, so progressive.

Americans who earned in the top 1 per cent paid more individual income tax than the bottom 90 per cent combined in 2016, according to new figures released by the Internal Revenue Service.

That year, the United States government collected a total of $1.44trillion from 140.9 million income taxpayers, according to the IRS.

These filers reported a total of $10.2trillion in adjusted gross income.

The statistics show that the top 50 per cent of all taxpayers paid 97 per cent of total individual income taxes.

The bottom 50 per cent paid the same amount of income tax as the top 0.001 per cent, according to the IRS figures compiled by Bloomberg.

That means approximately 1,400 taxpayers – who make up the top .001 per cent – paid 3.25 per cent of all income taxes.

Interestingly, the tax reform last year that was supposed to be, according to the lefties, be a giveaway to the rich, actually resulted in the rich paying a higher percentage.

In 2018, the top 20 per cent of income earners – those earning at least $150,000 a year – will pay 87 percent of income tax, according to the Tax Policy Center.

That is an increase from about 84 per cent of income tax that the top 20 per cent paid in 2017.

The figures show that 1,400 taxpayers paid about the same amount of taxes as 70 million taxpayers who earn incomes that are in the bottom 50 per cent

The highest earners – those making $3.2million a year – who account for the top 0.1 per cent will pay 22 per cent of all income tax in 2018.

That is an increase from 18.9 per cent in 2017.

Vote for Tony Evers if you want higher taxes

Here is my full column that ran in the Washington County Daily News yesterday.

During the era of Gov. Jim Doyle, Wisconsin was a tax hell. Our state consistently ranked in the top tier for overall tax burden and worst tax climate for business. Gov. Scott Walker and Republicans in the Legislature have made great strides in lowering taxes to the point that Wisconsin is now slightly worse than the average state in these rankings. That is a remarkable improvement in less than a decade. Perhaps it is now fair to say that Wisconsin is a tax purgatory, but it certainly has not ascended to a tax heaven yet.

If Wisconsin’s voters elect Democratic candidate Tony Evers to be our next governor, he will certainly push Wisconsin back down into the depths of the tax hell we just escaped. One may be tempted to think that this is just another baseless “Democrats will raise your taxes” attack. Evers is a doctrinaire liberal, so it would be easy to just assume that he wants to raise taxes. But one need only look at Evers’ own words to see that it is true. In fact, increasing taxes to support more government spending seems to be Evers’ answer to every issue facing the state.

Evers’ core issue, as one would expect, is public education. As the head of Wisconsin’s Department of Public Instruction, he has served as the titular leader of public education in the state for years. Yet, year after year, he failed to advance any initiatives to actually improve education. His one solution has always been, and is now, to spend more.

In his role as superintendent of the DPI, he submitted a budget that would increase state spending on public education by $1.7 billion in the next budget. That is a massive increase in spending. On Tony Evers’ campaign website, he says that if elected he will, “increase investments” and “increase funding” in virtually all aspects of the public school oligopoly.

Evers claims that such spending increases will not require tax increases because other state spending can be reprioritized. The problem with his math is that he wants to increase spending on all of the other major state spending items too.

When it comes to state spending on transportation and infrastructure, Evers says that he will “invest more in local road maintenance,” and “increase funding for public transit.” He will also “repeal changes made to Wisconsin’s prevailing wage laws.” Those changes will save the taxpayers millions of dollars — if they are not repealed.

For the environment, Evers will “invest in our natural resources” and shield the Department of Natural Resources from public oversight. For health care, Evers will “invest in preventative health programs” and “accept federal Medicaid expansion dollars,” which is already forcing more state spending in the states that accepted it. For economic development, Evers promises to “ensure access to high speed broadband,” “invest in our roads, bridges, ports and airports,” and “increase our investment in education.” For the University of Wisconsin System, Evers promises to “increase investments in both our technical schools and UW System.”

One thing becomes very clear in reviewing Tony Evers’ plan for Wisconsin. Whatever problems the state faces, the solution, in Evers’ mind, is to spend more money. The short list of items above comprises more than 60 percent of all state spending, and Evers wants to increase spending on all of it. What will he cut to offset that spending? Pensions? Law enforcement? Local aids?

There is no doubt that Tony Evers will raise taxes if given the chance. There is no other way to support the incredible increases in spending he envisions for the state. The only questions is how much taxes will go up under a Governor Evers.

Vote for Tony Evers if you want higher taxes

My column for the Washington County Daily News is online. Here’s a taste.

During the era of Gov. Jim Doyle, Wisconsin was a tax hell. Our state consistently ranked in the top tier for overall tax burden and worst tax climate for business. Gov. Scott Walker and Republicans in the Legislature have made great strides in lowering taxes to the point that Wisconsin is now slightly worse than the average state in these rankings. That is a remarkable improvement in less than a decade. Perhaps it is now fair to say that Wisconsin is a tax purgatory, but it certainly has not ascended to a tax heaven yet.

If Wisconsin’s voters elect Democratic candidate Tony Evers to be our next governor, he will certainly push Wisconsin back down into the depths of the tax hell we just escaped. One may be tempted to think that this is just another baseless “Democrats will raise your taxes” attack. Evers is a doctrinaire liberal, so it would be easy to just assume that he wants to raise taxes. But one need only look at Evers’ own words to see that it is true. In fact, increasing taxes to support more government spending seems to be Evers’ answer to every issue facing the state.

WI to Exempt Some Small Retailers from Internet Sales Tax

Not only do I not like the tax increase, I thoroughly dislike that an unelected agency is making these arbitrary decisions instead of the legislature.

The Department of Revenue’s administrative rule to allow the state to begin collecting the sales tax on some online transactions will include an exemption for smaller retailers.

The DOR’s announcement yesterday is consistent with the U.S. Supreme Court ruling that cleared the way for states to begin collecting the sales tax from online and remote sales involving retailers with no physical presence in their states.

That means retailers must have annual sales of at least $100,000 in Wisconsin or at least 200 transactions before having to collect the sales tax.

The Walker administration told WisPolitics.com on Monday that it planned to begin collecting the tax Oct. 1 and was in the process of notifying retailers.

The Legislative Fiscal Bureau on Monday released a memo projecting the state could collect an additional $90 million in the current fiscal year if it began collecting the tax Oct. 1. It would then bring in an estimated $120 million annually.

Wisconsin politicians should reject tax increase on internet purchases

As you could have read yesterday in the Washington County Daily News, here is my column urging Wisconsin’s Republicans to reject a tax increase.

Thanks to a 1992 ruling of the U.S. Supreme Court that said that states could only collect a sales tax on businesses with a substantial presence in their state, consumers have been largely exempt from paying sales taxes for purchases made online. Those days may be coming to an end.

Last week the Supreme Court overturned its 1992 ruling. The new legal landscape means that states can now levy a sales tax on internet sales, but they are not required to do so. States like Illinois and California, with their self-inflicted derelict financial situations, are salivating over the opportunity to capture more tax revenue. What should Wisconsin do?

A report last year from the U.S. Government Accountability Office estimates that the imposition of Wisconsin’s sales tax on online purchases would result in between $123 million and $187 million in annual tax revenue for Wisconsin. The important thing to remember is that this projected tax revenue is not “found” money. It is additional money that would be extracted from the pockets of Wisconsinites by state government. It is not a tax on the online businesses who sell to Wisconsinites. It is a tax increase on Wisconsinites.

That is not to say that imposing a tax increase is necessarily a negative thing. There are some compelling reasons for states to impose a sales tax on internet purchases. The primary reason is for the cause of tax fairness. Wisconsinites pay the sales tax at brick-and-mortar stores without question or debate. The fact that those same Wisconsinites can buy products online without paying the sales tax gives online retailers a material advantage over the brick-and mortar stores. In the name of fairness, government should treat businesses equally regardless of their mode of delivering products.

The problem with that argument is that the unequal treatment of businesses is a consequence of a policy decision. The sales tax is not imposed on the businesses. The businesses are merely tasked as an agent of government to collect the tax. The consumers are paying the tax. The implementation of the sales tax whereby consumers must pay it at a physical retailer but are exempt from paying it at an online retailer is fair. Every consumer — the people actually paying the tax — is being treated equally in this regard.

It must also be acknowledged that the different sales tax treatment of brickand- mortar purchases and online purchases is an extremely small driver of the societal trend toward online purchases. The infinite selection, ease of browsing, competitive prices, easy shipping and the ability for consumers to sit on their couches in their skivvies while they shop are far more powerful disruptive forces than the sales tax. Furthermore, even as online purchases have soared in the past two decades, they still only represent about 10 percent of all retail purchases in America.

Given that the ruling by the court is still fresh, Wisconsin’s political leaders are still pondering the consequences and possibility of imposing the tax increase. Some of them are lusting after the money with an eye to spend it on their priorities. Gov. Scott Walker and other Republican leaders are floating the idea of imposing a new sales tax on internet purchases, but using it to offset state income taxes in accordance with a law that Republicans passed in 2013.

Such a use of new sales tax revenue would be laudable. By using sales tax revenue to offset income taxes, it would keep Wisconsin’s total tax burden static, but shift some of that burden to the broader population of retail consumers and off of the shoulders of income earners.

History tells us, however, that raising one tax to offset another never works over the long term. While Walker and legislative Republicans may set up such a tax offset initially, over time there will be different politicians with different priorities. Inevitably, some future politicians will begin to carve out a percentage of online sales tax revenue for some spending “priority” or “crisis.” Then that percentage will increase over time until the notion of a tax offset is all but forgotten except by crotchety curmudgeons who write columns.

Wisconsin’s Republican leaders should resist the temptation to tax online purchases and make sure the whole nation knows that Wisconsin is the place to live if you want to continue to make tax-free online purchases. The best tax is the one that is never imposed.

Wisconsin politicians consider tax increase on internet purchases

In my column this wee in the Washington County Daily News, I take a deeper dive into the issue of a potential sales tax on internet sales following the decision by the Supreme Court last week. Here’s a snippet, but pick up a copy of the Washington County Daily News to read the whole thing!

That is not to say that imposing a tax increase is necessarily a negative thing. There are some compelling reasons for states to impose a sales tax on internet purchases. The primary reason is for the cause of tax fairness. Wisconsinites pay the sales tax at brick-and-mortar stores without question or debate. The fact that those same Wisconsinites can buy products online without paying the sales tax gives online retailers a material advantage over the brick-and mortar stores. In the name of fairness, government should treat businesses equally regardless of their mode of delivering products.

Wisconsin Ponders Internet Sales Tax

Times’re a changin’.

Wisconsin could generate as much as $187 million in new tax revenue annually if it extends its sales tax to online retailers based in other states — enough to give about $84,000 to every Wisconsin school or make permanent this year’s one-time $100-per-child tax credit and back-to-school sales tax holiday.

However, Gov. Scott Walker and Republican lawmakers have already signaled that additional funds from such taxation should be used for a different purpose: automatic reductions in state income tax rates.

[…]

On Thursday the Supreme Court’s 5-4 ruling, which did not split along ideological lines, overturned the 1992 decision and said states can tax internet sales.

The ruling doesn’t mean such a sales tax will begin immediately in Wisconsin as it will in many other states that have laws where the court decision automatically triggers a sales tax collection for online sales.

Walker’s office, the state Department of Revenue and the Legislative Fiscal Bureau are still reviewing the decision and declined to comment before completing the review.

So it’s unclear if new legislation is needed or whether the Walker administration can collect the tax from out-of-state companies through regulatory changes.

Walker and the Legislature enacted a law in 2013 requiring income tax rate cuts corresponding to any potential online sales tax revenue collections “as a result of any federal law to expand the state’s authority to require out-of-state retailers” to collect the tax. But that law doesn’t refer to U.S. Supreme Court decisions.

I agree with the decision of the Supreme Court. Whether or not a state can tax inline purchases should be up to the state. But then each state must decide if they want to do it or not.

There is not escaping the fact that taxing online purchases is a tax increase imposed on the people in the state who buy stuff online. That doesn’t necessarily mean that it’s a bad thing since it spreads the tax burden a little wider and puts online and brick-and-mortar retailers on the same footing when it comes to the sales tax.

If Wisconsin law makers decide to impose a tax on internet purchases to reap the projected $187 million windfall and uses it to increase spending, it would be just another tax increase to fuel more government spending. If they impose the tax for the purposes of being more fair, or whatever, and use the tax revenue to offset other taxes while not increasing spending, I might be okay with that. I don’t trust their discipline to resist just blowing any additional tax revenue – especially in an election year.

Wisconsin Still Needs Broad-Based Tax Relief

Indeed. But we must cut the corresponding spending too.

“(S)ales tax experts and economists widely agree that there is little evidence of increased economic activity as a result of sales tax holidays,” according to a research report released last year by the Tax Foundation, which is currently touring Wisconsin along with the Badger Institute to gather insights from Wisconsin citizens concerned about the state’s tax code.

Applying that rationale here means that Wisconsin would be better off reducing permanently its high marginal income tax rates for all taxpayers, rather than dishing out small, one-time — and, therefore, relatively inconsequential — tax breaks to a limited group.

To be sure, beneficiaries of the child tax rebate and sales tax holiday won’t turn up their noses up at the short-term savings. But once the savings are gone, they’re gone, and the lasting value to the beneficiaries or the Wisconsin economy will be negligible at best.

If tax rates were already low (or nonexistent, as they are in nine income-tax-free states), targeted breaks might have some appeal. But that is clearly not the case in Wisconsin, whose individual income tax rates rank high in comparison to most of the rest of the country.

One hopes that these short-term tax breaks do not divert attention from the need for broader-based rate reductions. That’s where the focus should be. It is good policy and, as Gov. Walker says, “Good policy is always good politics.”

Special Meeting to Spend Money Tonight

I’m not sure why the West Bend School Board has to do all of these things with special meetings and not as a part of their regular order, but here it is:

May 7, 2018 – West Bend, WI – The West Bend School Board will hold a special meeting at 5:15 p.m. tonight, to approve spending $35,000 on a community-wide survey regarding Jackson Elementary School and the West Bend High Schools.

The Washington County Insider has a lot of background information and financial information.

I’ll remind the gentle reader that this is part of a predictable liberal playbook to con the taxpayers into passing a referendum. The school board is about to spend, and has already spent, tens of thousands of dollars hiring sham companies whose sole purpose is to get school referenda passed. In this case, the district doesn’t even have a superintendent. This is all on the school board.