After unveiling their K-12 funding package at a press event yesterday, Assembly GOP leaders are hitting the road to gin up publicity, and they hope, support for the plan. An analysis can be found here.
Their proposal is the latest source of friction between the Assembly and Governor Walker and the Senate. Walker and the Senate have largely agreed on issues from property taxes, transportation, and Walker’s generous K-12 funding proposal.
Assembly leaders rolled out the funding plan in a press conference, then declared their intention to hit to road on a PR tour. Typically the time for such road shows – or as Sen. Leah Vukmir called it, a “dog and pony show” – would have been long passed and now would be the time for voting. However, the Joint Finance Committee cancelled both of its meetings this week, and whether the committee will meet next week isn’t certain.
By choosing to roll out their initiatives – which challenge Walker’s hard line on raising taxes both on property and gasoline – in grandiose fashion and then embark on a virtually unprecedented traveling circus to promote it, the Assembly appears to be waging a bizarre PR war against the Governor and their colleagues in the Senate.
The ongoing question is…why? MacIver Institute President Brett Healy talked about this on the Vicki McKenna Show today:
The following report by M.D. Kittle first appeared at the MacIver Institute.
A synthesized drum pounds, a single echoing shot. The camera trains on a polished Wisconsin Conservation Warden badge.
Cut to images of the wilds of Wisconsin – the Northwoods, a massive buck, a churning waterfall. With each new image the drum beat blasts. The producers of this two-minute-plus promotional video aim to quicken the blood, create a counter of natural beauty and musical tension.
Now, the money shot: A conservation warden easing her DNR patrol boat next to a sleek Crestliner. This agent means business. She does a check of the fishing boat, making sure the angler isn’t over his bag limit, looking over his license.
The Wisconsin Department of Natural Resource’s “Experience the Inside of the Outside” game warden recruitment video has the look and feel of an outdoor action movie. The promotional vehicle also spotlights how heavily armed and equipped DNR agents seem to be these days (Get out of the way of DNR’s boat, The Tim Carpenter!)
It is but one of myriad examples of a powerful state agency doing too much and wasting taxpayer money, according to a northern Wisconsin lawmaker and vocal DNR critic.
DNR officials say the video is at least a couple years old, but it’s still on the agency’s website.
Spokesman James Dick says the promotional video was produced in-house at a cost of “approximately $17,000, which could easily have been 45 to 50 thousand dollars if produced by an outside vendor.” Dick said video captured during the filming process but not used in the recruitment video has been featured in several other video projects, including recreational safety messages.
“That’s efficient use of time and helps reduce the cost of those other projects as well,” the spokesman said.
State Rep. Adam Jarchow questions the need for such elaborate productions at an agency constantly “crying, We need more money!'”
“In a time when we are trying to prioritize the spending of taxpayers’ dollars, I’m not sure this is the kind of video that is the best use of our limited tax dollars,” the Balsam Lake Republican said.
Dick said there is no warden shortage in the state now and there wasn’t “back in 2014 when the idea for a recruitment outreach program, including the video, was developed.” The DNR typically hires 10 to 15 recruits per year for various reasons – retirements, wardens leaving for other jobs, etc. What the agency noticed in 2014, Dick said, was a trend in what seemed to be a “drop-off in the numbers and quality of applicants” for the positions.
“So, an outreach plan was developed to reach a wider audience of potential recruits and introduce more people to the opportunities and benefits of become a DNR conservation warden,” the spokesman said. “The video, completed and posted in April 2015, was just a part of that outreach.”
Environmentalists and Democrats have decried moves by Gov. Scott Walker and the Republican-controlled Legislature to make the agency more efficient and more accountable to the hunters and businesses it regulates. Walker’s previous budgets have trimmed nearly $60 million from the department and did away with nearly 200 DNR positions.
“So many changes and roadblocks have tied DNR’s hands so dramatically that they’re really not able to do the job the public expects them to be doing,” Amber Meyer Smith, a lobbyist for environmental advocacy group Clean Wisconsin, told the Associated Press earlier this year.
But it seems the DNR has enough money to produce high-action warden recruitment videos and hold training events at some of Wisconsin’s higher priced hotel and conference destinations, Jarchow said. The lawmaker’s initial review has found the DNR has spent hundreds of thousands of dollars in the current biennium on conferences, seminars and other training events, including the hotel accommodations that often go with them. Jarchow last week said he is waiting on an open records request to track what he asserts are unnecessary expenditures. MacIver News Service, too, is seeking similar information through an open records request.
Initial payment vouchers through the state’s billing system show one statement for nearly $12,000 at Wisconsin’s Dells’ Chula Vista Resort.
Dick said he could not speak to the training expenditures until the financial information becomes available.
The DNR spokesman insists the recruitment video has been successful, noting a class of 13 qualified candidates was hired last year.
“The feedback we’ve received on the video (individual and conservation partners) has been outstanding,” Dick said, adding that the recruiting website receives approximately 1,000 hits weekly and increases “considerably” during the conservation warden hiring processes.
Jarchow isn’t sold.
“This reaffirms my opinion that the DNR does way too much, and this is why earlier this year I had proposed splitting the DNR,” the lawmaker said. “Now we find out in addition to all of its duties that it also creates videos. “It just reaffirms that this is an unwieldy agency that seems to have no boundaries.”
The following column originally appeared at the MacIver Institute.
At long last, the Legislature’s Joint Finance Committee will have to make a decision on whether to adopt a self-funded insurance system for state employees’ health insurance. The bad news is that Governor Walker’s proposal to make the switch and save $60 million is all but dead in the state Legislature.
On Monday, the Group Insurance Board submitted contracts with third-party administrators for a self-insurance system. Those contracts spell out in black and white at least $60 million in savings over the biennium – that’s on top of $22 million in possible savings if Obamacare and its obscene tax burden is not repealed. With the contracts in hand, JFC now has about three weeks to convene a meeting and make a decision.
“Since taking office, we have sought to reform government to make it more accountable and cost effective to the hard-working taxpayers,” Walker said in a statement on Monday. “Moving to self-insurance is one of these reforms and we urge the Joint Committee on Finance to approve these contracts and invest these savings into the classroom.”
Unfortunately, it appears that JFC is prepared to leave this windfall for taxpayers on the table. Why? We’ve heard a carousel of arguments against self-insurance that have all stalled, but the final stand for self-insurance naysayers might boil down to pure politics.
Early arguments by opponents of self-insurance breathlessly claimed that the move would gut state workers’ health insurance plans. Ignoring how out of step these lavish plans are compared with their private sector counterparts, it quickly became clear this doom-and-gloom claim had no basis in reality – especially after the actual proposals were received.
Next, the self-insurance doom-mongers portrayed the switch as a journey down a long, dark tunnel. The fact is that there’s nothing mysterious or scary about self-insurance; Wisconsin already partly self-insures its dental plan and its pharmacy plan.
At least 20 states completely self-fund their state employee health plans, including Minnesota, which moved to 100 percent self-funded insurance in 2002. Also, 46 states use self-insurance in some way.
In the upper Midwest, no states are fully-insured, meaning none completely rely on private insurance and all are self-funded at least in part.
More than 90 percent of all large employers, companies that employ 5,000 or more employees, also use self-funded insurance. To say adopting this system would be risky and experimental is diametrically untrue. In fact, it would be routine and economical.
Critics then moved on to prophesizing that the switch could pose a potentially catastrophic financial risk to the state. True, the state would be directly assuming the risk rather than putting insurance companies in the middle. But barring an unprecedented epidemic sweeping state office buildings, the risk factor has been greatly hyped.
The risk would actually be low because of the sheer size of the state’s workforce, which means total annual payouts would be predictable and fluctuations minimal, according to insurance expert Dean Hoffman, who recommended the switch to the Governor’s Commission on Government Reform last May.
Legislative Republicans are also uncertain about the future of Obamacare, which imposes a variety of taxes and fees on the insurance marketplace that would be absorbed by taxpayers in Wisconsin.
JFC co-chair Sen. Alberta Darling cited Wisconsin’s relatively low premium increases at a Tuesday press conference. “Why would we want to shift out of that and into uncertainty at this point?” she asked.
Caution isn’t unreasonable, but moving to self-insurance would actually protect Wisconsin taxpayers from uncertainty. Taxpayers should be the focus, not protecting the platinum health insurance of government employees.
Obamacare hits the insurance market, and thus taxpayers, in two big ways. The reviled Obamacare Cadillac Tax applies an exorbitant 40 percent tax on all employee benefits exceeding $10,200 annually for an individual, $27,500 for a family.
Sadly, the AHCA healthcare bill that passed the House last week retains the Cadillac Tax, although it pushes off the starting date of the Cadillac tax until 2026. Self-insurance would help mitigate that cost by eliminating the middle man in the current setup.
Then there’s the insurer tax, a special levy charged to private insurance companies that’s tied to the insurer’s premiums collected in the previous year. In 2016, the insurer tax ranged from 1.5 to 3.5 percent, with future rates yet to be decided. As the state’s deputy commissioner of Employee Trust Funds, Lisa Ellinger, pointed out last year, the state pays out about $1.4 billion annually in premiums.
Self-funded insurance systems are exempt from this tax. Quick cocktail-napkin math shows that switching to self-insurance would conservatively save tens of millions on top of the $60 million outlined in the contracts.
Despite ongoing uncertainty about Obamacare, keeping the status quo is precisely the wrong decision. Assuming Obamacare’s taxes are here to stay, seizing the $60 million moment would be responsible management of taxpayer dollars. Keeping the status quo and hoping Washington politicians do the right thing would not.
Instead, legislative leaders are considering “finding” $60 million in savings within the existing system. “We’re not saying no to savings. If we do that we’re going to find a similar amount of savings in some way, shape or form,” said JFC co-chair Rep. John Nygren on Tuesday.
If that’s actually possible, it begs the obvious question: how much taxpayer money has been wasted by not finding these supposed savings years ago?
With most of the arguments against self-insurance out of gas, opponents’ final stand may betray the truth: self-insurance is good policy, but protecting the status quo is even better politics. Or protecting the status quo is better politics for any politician worried more about the next election and less about taxpayers. Unfortunately for taxpayers, just about every politician in Wisconsin fits in that category.
The fact that self-insurance is good policy is evident from how many states and large employers use it successfully.
The likely end result is that Wisconsin taxpayers will get a watered-down half-measure that goes through the motions of saving taxpayer money while keeping the bloated and expensive existing system in place. That’s bad public policy.
The following story by Matt Kittle, breaking down the Assembly GOP’s plan to overhaul the tax code, increase transportation funding, and make other reforms, first appeared at the MacIver Institute.
After weeks of tortured speculation, state Rep. Dale Kooyenga on Thursday unveiled an ambitious transportation/tax reform package aimed at driving down road borrowing, dramatically cutting the state income tax through a flat tax on income, and bringing integrity back to government spending.
But the Brookfield Republican’s sweeping proposal, which appears to have the backing of the GOP Assembly, promises to be a tough sell for some of the state’s most powerful interest groups – chief among them, the petroleum marketers.
Some in Kooyenga’s party may have a hard time swallowing a provision in the package that would place a sales tax on gas, particularly Gov. Scott Walker, who has declared open war on any proposal bound by transportation tax hikes.
Kooyenga rolled out his “Road to a Flat Tax” package at a press conference Thursday afternoon in front of a deep and wide phalanx of his fellow Republican Assembly members – a show of solidarity for what promises to be a bruising legislative battle ahead.
A tax by any other name?
The transportation proposal adds a state sales tax on gasoline, currently exempted. That provision would raise an estimated $660 million over the biennium (2017-19), assuming gas prices at $2.33 per gallon.
But the tax burden – and the accompanying revenue it would create – would be bought down by a provision lowering the state’s mandated “minimum markup” of gas prices from the obligatory 9.2 percent to 3 percent.
The plan also calls for cutting Wisconsin’s gas tax of 32.9 cents a gallon, one of the highest in the nation, by nearly 5 cents.
Kooyenga estimates the reductions would wring out an estimated $330 million from the $660 million generated from the gas sales tax, leaving more than $300 million in additional transportation funding.
Asked whether he thought the sales tax on gas was just a “tax on a tax,” Kooyenga said the structure is a “matter of mechanics,” that it’s easier for retailers to adopt. Had it been viewed as more complicated or opposed by those charged with collecting it, the lawmaker said, he would have reduced his proposed gas tax cut instead.
The increased revenue from the sales tax would be targeted for transportation bonding reduction, a move expected to reap significant savings to state coffers. About 22 cents on the dollar goes to transportation interest payments, a big piece of the funding pie that will only expand without a major intervention, Kooyenga said.
“We cannot fix our roads by borrowing our way to prosperity,” said Assembly Speaker Robin Vos,R-Rochester.
The speaker has pushed for more funding for road projects. While he acknowledged that he and his Republican colleagues aren’t happy with every element of Kooyenga’s proposal, the increased revenue begins the process of finding a long-term solution to the state’s transportation funding problems.
The petroleum marketing lobby doesn’t quite see it that way. Sources say the special interest group is launching a campaign to kill the minimum markup provision.
One of the big Capitol questions in response to Kooyenga’s sales tax provision: What happens if gas hits $4 a gallon? The legislator, a member of the Legislature’s powerful budget-writing committee, said the sales tax could come with curbs when prices at the pump soar or plummet.
Walker’s budget proposes $500 million in new bonding. Kooyenga said reducing transportation debt will save taxpayers about $150 million over a 20-year bonding cycle.
Kooyenga’s debt-reduction plan is dependent in part – about $70 million or so – on federal funding, something that won’t be known until August.
And Kooyenga’s plan would end the practice of siphoning of transportation money to pay for general budget items, a practice that defined former Democrat Gov. Jim Doyle’s tenure in office and helped create a massive transportation budget shortfall.
“We were all outraged with the way the transportation fund was being raided by Doyle,” Kooyenga told MacIver News Service. “This makes the general fund stand alone and the transportation fund stand alone. There will be no subsidization.”
The transportation proposal also includes:
- Elimination of Wisconsin’s prevailing wage law.
- Elimination of 180 Department of Transportation positions.
- A Roundabout moratorium.
- Suspension of new local wheel taxes, including Milwaukee County’s.
- Referendum authority, giving local governments the option to ask voters for a half-cent bump in to the sales tax to help fund transportation needs. The ballot issues would be capped at two over eight years, and the law would expire in 10 years.
- Consideration of the creation of toll roads.
The package calls for a 3.95 percent flat income tax implemented over a decade, and it keeps Walker’s elimination of the state property tax. The Legislative Fiscal Bureau projects over $2 billion in annual income tax cuts when the flat tax is fully implemented.
Kooyenga’s proposal is similar to the MacIver Institute’s “Glide Path To A 3% Flat Income Tax,”released in January.
Republican Assembly leadership says he infrastructure/tax reform proposal builds on Walker’s budget proposal, released in January.
The governor’s office did not respond to a request for comment Thursday from MacIver News Service, but Walker told conservative talk show host Mark Belling Wednesday that he had no problem working with the Legislature on a transportation solution.
He remains fixed in his position.
“My position has not changed,” Walker said, “I don’t not believe we need to have a gas tax increase…” How about the addition of a sales tax on gas? Walker said he’s not interested in new taxes, even with tax cuts elsewhere.
To pay for the tax cuts, the reform plan eliminates or reduces several tax credits, including:
Marriage credit – “The proposal eliminates the credit in order to promote tax code simplicity, fairness and assist in paying for the flat tax,” the plan document asserts.
Property Tax/Rent Credit -Would repeal the credit for renters, effective in tax year 2019.
Electronics Recycling Fee – Unique to Wisconsin, the fee calculation is “complicated and creates onerous paperwork,” Kooyenga wrote. “The fund associated with the fee is solvent and the fee is no longer required.”
Working Families Tax Credit – Kooyenga says the tax credit was created to serve as a bullet point on a press release. Less than 1 percent of Wisconsin filers qualify. Kooyenga asserts elimination will simply the code.
The itemized deduction credit would be lowered from a 5 percent calculation to a 2 percent calculation in order to “assist in paying for the collapsing tax brackets.” And the current general exclusion for capital gains – 60 percent on the sale of farm assets and 30 percent of other types of capital gains – would be repealed in 2019.
Kooyenga’s plan also eliminates Wisconsin’s Alternative Minimum Tax, something the lawmaker says he’s been fighting for since he first joined the Assembly. Wisconsin is one of a half dozen states with an AMT. The plan would repeal the 6.5 percent alternative minimum tax, effective in tax year 2018.
The package met with immediate resistance from Democrats. Assembly Minority Leader Peter Barca, D-Kenosha, described the flat tax plan as a giveaway to the wealthy and the transportation funding proposal ineffectual.
“Here we are with six weeks left until a new budget is due and they (Republicans) unveil a plan that will not solve the transportation problem to create a sustainable fund, but instead what they will do … is lower taxes for the very wealthy,” he said. “When you have townships turning asphalt roads into gravel, you know you have a serious problem.”
When asked whether Democrats had a plan, Barca said he and Senate Minority Leader, Sen. Jennifer Shilling, D-La Crosse, have offered to sit down and talk to Republican leadership about the problems facing the state. Pressed for a plan, Barca said Democrats wouldn’t do away with Wisconsin’s prevailing wage law, as Republicans plan to do, and they would target tax breaks for Wisconsin’s “middle class.”
Kooyenga’s flat tax approach would target reduction across the board, with every taxpayer eventually paying the same rate. The lowest income brackets would be taxed at the flat rate by 2019, with higher income brackets phased in, through incremental reductions, over the decade.
Senate Majority Leader Scott Fitzgerald, R-Juneau, took to Twitter in reaction to Kooyenga’s proposals.
“The transportation & tax plan that Assembly leadership rolled out today contains a number of good ideas that are worth a closer look,” Fitzgerald tweeted. “I plan to review the proposal in its entirety to determine how closely it reflects Senate transportation priorities as talks continue.”
Kooyenga said his plan is about fairness. If Republican lawmakers are going to push measures to reform government, they need to be as diligent when it comes to eliminating special treatment for business. Minimum markup reform fits the latter, he said.
“Some people have said this is very complex. I think at the end of the day this is not very complex,” Kooyenga told MacIver News Service. “In summary, we’re reducing a very anti-free market law, we’re being consistent with our sales tax, we’re lowering our gas tax, we’re reducing our bonding, we are significantly changing our income tax code and making it fairer, flatter and simpler, and we’re putting in substantive, large transportation reforms.”
The following post about Tax Freedom Day first appeared at the MacIver Institute. Note that Wisconsin is dead last among states with all-GOP control…
It’s Tax Freedom Day for the Badger State, the day when hard-working Wisconsinites have finally earned enough money to cover their total tax burden for 2017, according to the Tax Foundation’sannual Tax Freedom Day initiative. That’s right – we work the first 117 days of the year to cover our tax bill.
National Tax Freedom Day was April 23 – 113 days of work – but since Wisconsin taxpayers still bear a heavier-than-average tax burden compared with the country as a whole, we must toil away for four more days.
Tax Freedom Day in Wisconsin ranks #40 on the Tax Foundation’s Tax Freedom Day list, meaning Wisconsinites pay off their tax bill before residents of New York, California, Minnesota, and Illinois. However, taxpayers are better off in four Midwestern states: Iowa (#14), Indiana (#19), Ohio (#27), and Michigan (#32).
Wisconsin’s #40 ranking held steady from 2016 but is down from #37 in 2015. Also, in 2015 Tax Freedom Day was on April 25, two days earlier than this year. Despite efforts to reduce the tax burden in the Badger State, it seems that other states have leapfrogged Wisconsin by taking on even more dramatic tax reform.
Wisconsin is the lowest-ranked state with a Republican trifecta – where the GOP controls both houses of the legislature and the governor’s mansion.
While Wisconsin has enacted many much-needed tax reforms over the past 6 years that have saved Wisconsinites nearly $5 billion, there is clearly still more work to do to remain competitive nationally and keep our ranking going in the right direction – down.
Perhaps it’s time to talk about a major income tax overhaul, such as the MacIver Institute’s Glide Path to a 3 Percent Flat Tax…
The following was originally posted at the MacIver Institute on April 18 – tax day.
It’s that time of year when Americans across the country break out the lawnmowers and pruning shears, ready for life to spring into the trees and flowers, and ready for the chores that come with keeping a tidy yard. It’s also tax day, a time when Americans come together to shovel their hard-earned dollars down the bottomless pit of our country’s wildly overgrown federal government.
All across the country, productive, hard working citizens line up to be shaken down, lest a single nickel of their contribution to the country’s bloated $4.27 trillion-a-year spending spree goes uncollected by the IRS.
Now that the kids have finished finding their Easter Eggs, it’s the adults’ turn to go on a hunt – for the missing chunk of their paycheck that vanishes into thin air every payday.
Some people will get money back, of course, and most of them celebrate the supposed “windfall.” In Wisconsin, the average refund is about $2,400. Nationwide, 111 million Americans got a refund in 2015 totaling more than $317 billion.
But keep in mind, that check from the IRS is money you overpaid in taxes throughout the year – you and millions of other taxpayers simply loaned it to the federal treasury for the year at a zero percent interest rate. It’s quite the deal for the feds, just don’t try pulling that scam on your fellow citizen or you might end up in the slammer.
Others are stuck cutting a check to the treasury, often because they were either too industrious or too poor. Did you make the mistake of withdrawing cash from your retirement, possibly because of a financial hardship? Expect a stiff 10 percent penalty from the IRS on top of regular income taxes.
Or, maybe you made the mistake of not being able to afford health insurance. These days, thanks to Obamacare, you’ll get nailed for that trespass to the tune of $470 on average in 2015. The penalty is designed to increase over the years. Only a DC bureaucrat would think penalizing someone for being broke is good or fair policy.
If you made the mistake of working too hard, such as by putting in overtime, you also may find yourself cashing out your emergency savings account and sending it to Washington. If your regular wage is $20 per hour, and you work an eight hour overtime shift, then on average you’d be forking out 45 percent of that hard-earned overtime pay – $114 – to Uncle Sam, according to the CATO Institute. If you earn a bonus, expect the same treatment by our friends at the IRS.
Maybe you put in extra hours on the side as an independent contractor. For your extra effort, the IRS will be only too happy to soak you for not just regular income and payroll taxes, but also the employer match, an extra 7.65 percent. Better sack away half of that check and pray your car’s transmission holds out a while longer.
Perhaps you’re the unsuspecting owner of a small business who made the mistake of hiring someone in 2016. Hopefully you paid all 7.65 percent of their earnings in withholding taxes and complied with all the other onerous burdens the IRS puts on businesses. Just don’t slip up by making too much profit or you might spend some quality time with an IRS auditor.
Then of course there’s the absurd complexity of the Internal Revenue Code. In a futile attempt to comply with the 70,000 pages of tax code and related rules and regulations, many people hire professional tax preparers, who in turn take a chunk of their refund – in effect a “tax code complexity surcharge” that goes straight to places like H&R Block.
On the campaign trail, Bernie Sanders and other liberal politicians say there’s no reason someone who works full-time should have to live paycheck to paycheck. They then peddle big government schemes as the solution to everything from student loan debt to rising electric bills.
Maybe if government didn’t take so much in taxes in the first place, only to waste it on crony giveaways and bloated bureaucracies, those working people Sanders and friends claim to champion would be able to afford their student loans and utility bills.
But hey, there’s always welfare. Just be careful not to qualify as “rich” by left-wing politicians – not that they’ve ever defined what amount of income they think makes you “rich.” Slapped with the depressing reality of their tax bill, middle class Americans would be right to suspect that the left secretly considers them to be “rich” using their enigmatic standards.
When the income tax was enacted in 1913, the entire tax code was 27 pages long. The income tax at first only applied to one percent of the income of the top one percent of income earners. Nowadays, even lower middle class people must work the equivalent of three or four months of every year before the fruits of their labor are really their own.
Like your lawn, the natural direction of government is to grow bigger and more tangled, sucking up more and more resources. This tax day, let’s demand politicians chop government down to size so hard work and success actually pay off.
Here’s my column from the Sunday, March 12 edition of the La Crosse Tribune.
The nightly news and the morning paper are great ways to keep informed. Unfortunately, they’re also great avenues for politicians to peddle their schemes for foisting new taxes on unsuspecting taxpayers.
When I heard La Crosse County wants to become a “premiere resort area,” and that this designation would generate millions to fix roads, at first I felt like I was in Oprah’s audience that day she gave everyone a new car.
In reality, the proposal for a new “Premiere Resort Area Tax,” or PRAT, is more like when you overbid on the showcase showdown on The Price Is Right and the infamous fail horn blares just before you’re escorted from the stage.
The PRAT tax, the latest tax scheme cooked up by La Crosse County officials, is really just another half-percent sales tax that could be imposed on nearly all retail businesses in the county. As with any other sales tax, this $6.6 million new tax will inevitably be paid for by consumers like you.
“But without more money we can’t fill the potholes!” the tax-and-spend crowd keeps shouting in your ear every time you turn on the TV. What they conveniently omit are their own failures to properly prioritize county spending.
La Crosse County budgeted for $136,764,518 in revenue for 2016. It planned nearly $33 million in property tax collections and $11.6 million from the county’s 0.5 percent sales tax. Yes, the county already has a sales tax onto which the proposed PRAT tax would be stacked.
According to the state Department of Revenue, 44 categories of business are subject to this tax in any jurisdiction that enacts it — bars, restaurants, gas stations, clothing retailers, hotels — even a category called “miscellaneous retail stores,” lest any devious boutique business falls through the cracks. In short, pretty much every business that a tourist could theoretically walk into would be subject to the PRAT tax.
The PRAT was conceived for the most innocent of reasons. When the summer residents of certain areas, like the Wisconsin Dells, fled for the winter, the Dells and similar tourist reliant areas needed a consistent revenue source.
Thus the Legislature invented the PRAT, but it required at least 40 percent of assessed property values in the taxed region to be composed of tourism-related businesses in order to be enacted. Thus, only six municipalities in Wisconsin currently have a PRAT tax, according to the Department of Revenue. At 5.3 percent, La Crosse County doesn’t come close to qualifying.
While our home is a beautiful region with plenty of tourist attractions, it’s hardly a “premiere resort area” according to state law. Nobody’s going to be winning a trip to La Crosse on the Wheel of Fortune.
Fortunately for the pro-PRAT crowd, there’s an exemption. After an advisory referendum, the Legislature can pass a special measure allowing the county to proceed with the final steps required to enact the tax.
Taxpayers should keep an eye on the big picture, and I don’t mean the size of their property tax bills.
The county should make better decisions with what it does with taxpayer money, and roads should clearly be a priority. However, when the county board voted to nearly double its debt in 2015 from $59 million to $110 million in one fell swoop, filling potholes or fixing cracks was hardly a priority. Instead, the county embarked on a series of expansions of its office complex downtown.
Thankfully, we have a vast network of paved, pristine bike trails around here–nary a pothole in sight. Or I suppose these days we’re supposed to call them multi-use trails.
The county is clearly taking in significant revenue, it’s just not choosing to spend it on roads. Now, county officials want to hit up hard-working taxpayers for even more. If your neighbor said they desperately needed to borrow money from you, all the while installing an in-ground pool and building a breakfast nook off their foyer, any rational person would raise an eyebrow.
A tax by any other name is still a tax. Taxpayers beware.
Read the original column here.
The Republican grassroots expects Washington politicians to deliver on their campaign promises of a major tax code overhaul, a sentiment that’s backed up by a new poll by the American Action Network, a center-right advocacy group based in Washington – as well as Republican leaders in an area of Wisconsin where Trump emerged the surprising victor.
The poll, which surveyed Republicans, found that 77 percent of Republicans think tax reform is extremely or very important. It also found that Republican rank-and-file voters are most concerned that the current tax code is too complicated and tax rates are too high.
“As President Trump and conservatives in Congress work on tax reform, this constituency is strongly behind them and overwhelmingly supports center-right tax reform. It’s clear, now is the right time to deliver on a simple tax code with lower rates for all Americans,” said AAN Executive Director Corry Bliss in a statement.
Brian Westrate, chairman of the 3rd District Republican Party – a historically blue district Trump won handily – framed the imperative to reform the tax code as a moral one.
“Those in power in our nation’s capital have a moral duty to the people they represent to tackle the over 75,000 pages that comprise the current tax code, to deconstruct it line by line, and reform it as a simple, effective, efficient, and fair new law,” Westrate said.
Bill Feehan, chairman of the La Crosse County Republican Party, said rank-and-file Republicans are very much in tune with the conversation in Washington and expect bold tax reform, especially after Trump – who made tax reform a centerpiece of his campaign – won the presidency in November.
“Tax cuts are the fastest way to stimulate our economy. Income tax cuts put more money in people’s pockets and most of the money gets spent right away,” Feehan said.
“This gets the economy going from the bottom up. Allowing businesses to keep more of the money they earn results in pay raises for employees, new equipment purchases and investment in business expansion,” Feehan added.
AAN’s poll also went into specifics about Trump and Congressional Republicans’ job performance and asked respondents about their tax reform plan. Respondents overwhelmingly support the broad outlines of the GOP’s plan, with 85 percent approving. Respondents also said tax reform should make it easier to create jobs, raise wages, and expand opportunity. A new tax code should grow the economy and encourage job creation.
Respondents also viewed President Trump favorably – 89 percent registered their approval. As for Congressional leadership, 77 percent approve of the job GOP leaders are doing.
The high support for Trump and Congressional leaders should be a boost for fence-sitting Republicans who might be afraid of the electoral ramifications of major tax reform. “This will take courage, and fortitude, but now that the conservatives in Washington control all levers of power in Washington they must use this opportunity to serve the people,” Westrate said.
“They must kill the tax beast built by progressive socialists over the course of the last 100 years.”
Both Trump and Congressional leaders in the majority party can maintain those relatively high numbers, it seems, by advancing a bold, pro-growth tax reform plan and doing it sooner rather than later. “Republicans should move quickly on tax cuts,” Feehan said.
“With great power comes great responsibility, the American people have given conservatives the power, now it’s time to accept the responsibility,” said Westrate.
This column also appeared at the MacIver Institute.
Photo credit: The Motley Fool
This hilarious fake ad targets the proposed Border Adjustment Tax, or BAT tax. It’s a parody of the typical infomercial-type ads that feature goofy shots of people struggling to perform everyday activities. And then, of course, enter the charismatic spokesman with the solution!
Except in this ad, people are struggling to close their overstuffed wallets or haul handbags loaded with cash up the stairs. It’s really brilliant.
The tax is opposed by the National Retail Federation, which produced the ad and will run it during Saturday Night Live this weekend.
I had the pleasure of joining Joy Cardin on Wisconsin Public Radio this morning to discuss Gov. Walker’s transportation budget.