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
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
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 -
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.)