In The News
Tax hell? New studies chill that lingering state myth
By Dominique Paul Noth
Editor, Labor Press
No one likes taxes, even when they pay for quality of life. Everyone hates not only the April 15 deadline but particularly the anxiety-inducing end-of year property tax bill.
But no one should like being lied to either -- and a conflagration of tax studies from left and right this month exposed how deeply Wisconsin citizens have been duped and bamboozled, or simply lied to, by those demeaning the state as a tax hell.
These new studies and analyses emerge from diverse quarters often guilty over the years of promoting that tax hell mythology, and maybe now quietly apologizing for the failure. Conservative think tanks (however reluctantly), the Wisconsin Department of Revenue, anti-tax crusaders and the Milwaukee Journal Sentinel are among those forced to finally admit a better understanding of the tax picture.
All in different reports (that disagree only around the edges) confirmed that that the Wisconsin tax burden is the lowest it’s been in more than 45 years and that the actual cost of government per income seems to put us in the lower rung of all 50 states.
“I’d love to see taxes go down” even further, Democrat Tom Barrett commented in a recent debate among candidates for Wisconsin governor, but neither of his GOP opponents who were part of that tax hell game, Scott Walker and Mark Neumann, dared refute his main point: “I think as a percent of Wisconsin income, the tax burden is the smallest since 1961."
Trick the figures all you will – and believe me, those seeking to get into office by any hook will -- when you finally employ a fair count that includes fees as well as state and local taxes, Wisconsin drops to the middle of all states. Leave fees aside -- and we still drop to about 14th in state income and property tax despite the realities that we are a rust belt state, services cost more, roads building and other concerns must deal with bad weather and Wisconsin has been under both Democrats and Republicans amazingly friendly to businesses in its corporate tax climate.
The bad news – the state’s tax continues to fall too heavily on middle class and poor families. But remember, the tax hell argument was pushed by business groups that today’s analyses reveal have been allowed to duck paying their fair share. Both Republican and Democratic administrations have bent over backwards to create a friendly state tax atmosphere for them. (Too friendly, it now becomes clear.)
In such fees as road tolls and in sales taxes, Wisconsin actually emerges as far easier on its citizens than many other states – in fact some pundits accuse us of subsidizing Illinois tourists. Our cautious sales tax and fees policy also add to the burden of lower income residents at the expense of better-heeled corporate citizens.
Combine all the new studies from all political sides and the combined necessities of taxes, rust belt history with costly decayed infrastructure, higher costs for quality all-weather roads and buildings – and Wisconsin shines even brighter considering the taxing reality of other states. We are only about 31 among all 50 states in total government spending. That goes with about No. 19 among the states in taxes and fees and as little as No. 27 or 28 (the math gets tricky) in total spending to run government.
Have we really done that well in the past two years? Frankly, you can offer two different scenarios to explain all this, both of which should send local talk show hosts scurrying back into the caves from whence they sprung.
The first scenario is, Gov. Doyle is the best fiscal leader we’ve had in decades. Sticks in conservative radio’s craw doesn’t it? But despite the blame attached to Gov. Doyle for playing with transportation and hospital funds and moving money around to keep services going, he has avoided heavier taxes and emerges as the most frugal governor for the state in decades, well before Tommy Thompson (who would take quite a hit if his taxing games were exposed in the current political climate).
Doyle surpasses his Republican predecessors big time partly because he was smarter with our money, stuck with restraints they imposed and actually controlled the excess spending they didn’t. His manner may have annoyed many but measured on results he looks darn good.
In taxes, though, perception sometimes trumps reality, so many won’t believe that. Certainly not the Tea Party activists who have finally started drawing crowds in the hundreds much like progressive causes have been doing for years (though the progressives’ crowds are routinely ignored by the media, which always flocks to the new loud voices on the block).
Ironically, though, the statistics are inescapable that the Tea Party “anti-tax” cry comes eight years late and is aimed at the wrong spendthrifts. Milwaukee magazine’s Bruce Murphy, hardly an apologist for the liberal agenda, provided a wicked aside in his analysis: “My point is not that Democrats are fiscal conservatives but that Republicans aren’t.”
Those who find Doyle as savior too hard to swallow (and that would be a simplistic reading of the figures, though he had done great in the hardest revenue crisis the state has faced in decades), there is an alternative scenario that I find more convincing than the thought we’ve turned everything around in the last two years.
Unfortunately, this scenario validates the “Hello, Suckers!” vision of Wisconsin voters. It confirms that for decades they have been shanghaied, bamboozled and blind-sided by biased data that labeled Wisconsin a “tax hell.” The dispensers have been GOP politicos in and out of power, conservative manufacturer-commerce lobbyists, entrenched talk show hosts, anti-tax think tanks and a barrage of bad studies promoted and sometimes concocted by the media (note how Journal Sentinel was just forced to reverse and try to explain away it earlier weak interpretations).
Our tax picture may have gotten better under Doyle, but it has been misrepresented all along, if you look inside the numbers. Confronting a public that believes in that tax hell, and now facing a very real and deep economic malaise caused in large part by those bad tax policies and reports, politicians on both sides can’t contemplate taxes as a road to higher revenue and won’t fix what are obvious flaws in our current tax system (too much reliance on income and property taxes, too much cost to middle class and poor families while corporations continue to escape).
The lingering façade of a tax hell continues to make us vulnerable to such games as County Executive Walker played on Milwaukee in April. More than a year ago, he falsely warned of a $15 million county budget deficit. Last summer he relied on his media and talk show buddies to pooh-pooh the County Board analysts who debunked that invention. This month he proclaimed a nearly $9 million surplus.
County economics did not get $24 million better. Fear invoked by tax nightmares allowed Walker to shred county services with massive layoffs and millions of dollars in deferred maintenance. Now he credits his tax cuts, but simple math exposes that lower than expected health care costs would have given the county a surplus anyway. Yet amazingly, some people still believe his political fabrication, just as they believed those years of erroneous tax reports and projections.
The facts and deeper rounded studies may make clear how hornswaggled Wisconsin citizens have been by tax myths, and how those myths actually allowed the state to shortchange is obligations to fund public education, or save for a rainy day, and it created gaps in services we will all pay extra for over the years.
Better knowledge won’t reverse overnight the “throw the rascals out” fever in the public and stop the reliance on “hello suckers” insults to the citizens. It remains to be seen if common sense can resurface by the next round of elections.