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State plummets to No. 11 
most taxing place
Legislators should save cheers and get to work

By OWEN B. ROBINSON

June 3, 2008

The headlines last week were very encouraging. Wisconsin Drops out of Top 10 Highest Tax States!!!!! Wow. That s pretty cool. But there s more to the story.

Before we dig into the details, one must marvel that so many felt excitement from falling out of the top 10. Wouldn t it be nice if Wisconsin were never in the top 10 highest-taxed states? Would that it was so, but it s not.

Wisconsin dropped to 11th in tax ranking in 2006 based on a formula from the Wisconsin Taxpayers Alliance that compares state and local taxes to the citizenís ability to pay. The last time that Wisconsin was out of the top 10 was in 1980 - 28 years ago. Of course, that s a bit misleading too. 1980 was an outlier year. Wisconsin was also in the top 10 from 1969 to 1979. In other words, Wisconsin has been in the top 10 highest taxed stated for 35 of the last 37 years.

The reasons for Wisconsinís drop are not as exciting as one might think. The truth is that Wisconsinís taxes did not go down to achieve our new ranking. In fact, Wisconsinites taxes went up last year - so did fees.

In the budget passed last year, government spending went up by about a billion dollars. The taxes necessary for such spending also went up. The reason that Wisconsin dropped out of the top 10 is because other states spent and taxed even more than Wisconsin.

Wisconsinís politicians were not responsible with our money. They were just more responsible than the politicians in a few other states. Itís kind of like being the most responsible compulsive gambler at a poker table. Sure, we blew our life savings and lost our home, but we didnít lose as much as the other guys lost. (The data bears out the fact that Wisconsinites continue to pay more of their income for taxes every year. In 2005, Wisconsinites paid 12.1 percent of their income in state and local taxes. In 2006, when Wisconsin dropped to the 11th highest taxed states, Wisconsinites pair 12.3 percent of their income in state and local taxes.

Tax rankings are useful for comparing Wisconsin to other states, but rankings have their limits. The fact that a few other states decided to jack up taxes and spending more than Wisconsin in a given year does not negate the fact that Wisconsinites are spending increasingly more of their income to pay for their government.

If the seizure of 12.1 percent of our income to pay for government was oppressive, and it was, then 12.3 percent is even more oppressive. Statistics are useful measurements, but they must always be weighed against reality. As Benjamin Disraeli said, "there are lies, damned lies, and statistics."

While the politicians might celebrate Wisconsinís drop in the tax rank, we must also not overlook how they managed to tax and spend less than those other states. They borrowed money and deferred spending.

After the budget was signed last year, Wisconsin faced an $800 million structural deficit. When it became clear a couple of months later that Wisconsin did not have enough money to pay for the spending they budgeted, the Legislature and governor set about a budget repair bill. The budget repair bill increased the budget deficit to $1.7 billion.

Remember, a structural deficit is merely the spending to which Wisconsin taxpayers are obligated pay but for which there is not any revenue to fund. A structural deficit does not include the millions and millions of dollars that Wisconsin s government borrowed to fund current spending. All of that money will have to be paid back in future budgets - with interest.

Wisconsin has been a leader in taxing and spending for decades. It s time for us to lead in a new direction - fiscal discipline.

Correction: In last weekís column, I incorrectly stated that the office of the Wisconsin Railroad Commissioner had been vacant since 2005. While the current commissionerís term expired in 2005, Commissioner Rodney Kreunen has continued to honorably serve until his replacement, Sen. Roger Breske, was selected.

(Owen B. Robinson, a West Bend resident, is a blogger who publishes at www.bootsandsabers.com. His column usually runs Tuesdays in the Daily News.)

 
 
 


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