Economics

Wisconsin Bails Itself Out With Tax Increases

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moo

I know life in Wisconsin isn't always as thrilling as the fast-paced excitement of Washington, D.C. But surely things aren't so bad in the Badger State that the people find tax hikes stimulating.

Like a lot of states, Wisconsin is looking at a budget shortfall in the next few years. So the state is putting together its own stimulus package, just like the big dogs in Washington. But unlike the federal stimulus, which contains a large dose of tax cuts, Wisconsin's includes tax increases.

Most of the stimulus package is just pre-approval for the spending of federal stimulus dollar once they arrive. But the bill would also raise taxes on businesses, including requiring companies based in the state to start calculating their tax liability in a way that includes money earned outside the state. Supporters say they are closing the "Las Vegas Loophole" (NOTE: What's with all the hate for Vegas lately, Democrats?).

Another provision that's sneaking into the stimulus package: A so-called iPod tax, which would attempt to extract sales tax from some online transactions, including music downloads. The iPod tax idea has been floating around the legislature since at least 2005, demonstrating once again that everything old is new again when it's part of a "stimulus" package.

Could we be in for a reenactment of the stimulus vote in Congress, where careful pork parsing failed to buy bipartisan love? The Wisconsin State Journal reports:

Assembly and Senate Republican leaders criticized the bill and said their GOP colleagues would overwhelmingly oppose it—despite the inclusion of transportation projects in their districts that are expected to create or save jobs and tax credits for business investments.

"The overall aspect of raising taxes by a half-billion dollars on businesses and the people of the state of Wisconsin outshadows anything that they could have put positively in this bill," said Rep. Jeff Fitzgerald, R-Horicon, the top Assembly Republican.

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  1. Shit. Now I’m going to have to re-evaluate my rooting for the Packers.

  2. Ah, government. Is there any bad situation you CAN’T make worse? The economy sucks because everyone’s broke, so if we make these broke devils pay more taxes everything’ll be just fine.

  3. Of corse it’s stimoolating, you assholez! I stim00late myself by sucking from myself all th timee.

  4. Well, of course they can get away with it, because they’re Wisconsin. I mean, who doesn’t want to move to Wisconsin and start a business?

  5. They didn’t have enough tax revenue, so they increased taxes. Hmm. Well, that sorta thing might fly in Wisconsin, but here in DC when we have budget shortfalls we cut taxes, y’see.

  6. Oh, one other thing – apparently they didn’t start any wars, either? What the hell are these people thinking?!

  7. I can’t even find a snarky comment due to the fact that it appears they’re actually being somewhat responsible. This has me so disassociated from reality that I can’t respond.

  8. I know life in Wisconsin isn’t always as thrilling as the fast-paced excitement of Washington, D.C.

    As a cheesehead-in-exile in the D.C. area, I would say that life in Wisconsin is probably more thrilling/exciting.

  9. I can’t even find a snarky comment due to the fact that it appears they’re actually being somewhat responsible.

    Apparently, cutting spending was not on the table at all. Nope.

  10. How much did spending increase in the states during the last boom? When property values declined and then the recession began, what did they do to reduce spending? If nothing, why not? We were doing pretty much okay before they increased the spending, weren’t we? Why not roll back to more sane levels of expenditure?

  11. KT,
    Generally it’s a bad idea to raise taxes in a recession/depression.
    See 1931.

  12. It is unfortunate, but I guess the state has to do this to earn more money that they need.

  13. Yah hey dere! Gonna start stockpiling cheddar now, you betcha.

  14. KT:

    Yup California has one of the most responsible government in the US. It also has the second highest unemployment rates. Do you think there is any connection?

    Nah, that’s just reactionary thinking divorced from the progressive reality based thinking this country so badly needs.

  15. Wisconsin is the birthplace of the notion that if you don’t get as much of a spending increase that you want that somehow that is a spending cut. Politicians ask for $10 million over their current budget and only get an $8 million increase – watch ’em cry poor.
    Wisconsin is the land of special interests – shove some money in the politician’s campaign fund and watch the bills start flying out of Madison. You want to force the public to use ethanol, get out the cash (one state rep goofus owns part of an ethanol plant but can’t see the conflict of interest). Want to stop school choice, shove some money in the governor’s campaign fund.
    And with all that is going on economically, you have the state legislature looking to enact “school nickname” legislation so if a school has a nickname that offends one person, the school has to go before the state to explain how the nickname has is not offensive or face a $1000 a day fine.
    And Wisconsinites let us not forget “Healthy Wisconsin” – the Madison Democrats version of universal health care. It died last session – watch it arise like Frankenstein this session.

  16. California’s government appears to be falling apart (or maybe it already has, I dunno). Do I think there is a connection between that and unemployment rates… well, I suppose there could be. There also could be lots of other reasons for the unemployment rate. I guess I’ll just choose the answer that best fits my preconceived notions.

  17. jk, thanks for reminding this former Madisonite what so annoyed him about Wisconsin politics. Well, all that, plus the smug “we’re all squeaky-clean Midwesterners” vibe.

  18. Supporters say they are closing the “Las Vegas Loophole”

    If this is what I think it is, Wisconsin, like many other states recently may be trying to get more teeth in their version of a use tax. Most states officially have a policy of a ‘use tax’ that applies to out of state based businesses that ostensibly compensates for the fact that only in-state businesses are assessed with general excise taxes. Most states also do not enforce it all that rigorously because it is impractible to monitor the hundreds of ‘points of entry’ from other states. In Hawaii however, because you just can’t drive a truck across the border, it’s relatively easy to monitor goods coming in and out and assess the use tax. There was a fairly big court case lately (that I can’t remeber if it went to the supremes or not) that argued that the use tax violated the interstate commerce clause, because it was efffectively an import tarriff.

  19. I’d love to see one rebel school district say no to the state regarding the nickname justification. Even if they could easily justify it, just say “No, we’re not telling you squat.” Then, when they get fined, just don’t pay the fine. If the state starts holding back money, that same school district start hoarding the sales tax revenue that is supposed to go to the state. It would require the town to be on board, but before you know it, either the state will drop their ridiculous request, or the town becomes self-sufficient. A gleaming example to all localities that outside interference is not needed, nor welcome.

  20. Another brilliant plan from our money-hungry state government – taxing iPod downloads (among other electronic transactions). I always cringe when I see a truck from Tax-Air Freight – I hope no politicians see it (they don’t need any more ideas on taxes to create or raise).

  21. Nick,

    The school districts don’t care – the taxpayers would be paying, not the bureaucrats. Maybe I’ll open a school and have the nickname be “Stupid Politicians”.

  22. iPod tax? Right there they just incentivized illegal downloads.

    Well, a little more than they were before, anyway.

  23. It is no accident that Wisconsin has been economically stagnant for a generation, and Madison in particular has been hostile to business and consequently has been losing productive jobs.

    There is a fascinating comparison to be written between Madison and Austin. At some point in the recent past, they must have been basically the same city (state capitol, state university, otherwise pretty typical light/service industry towns). Now, Madison is stagnant to shrinking, while Austin has been booming for decades.

  24. jk, I know the taxpayers would be paying. That’s the point. It would be evident pretty quickly that a locality can support its own school so they can stop sucking off the state tit AND keep whatever offensive school mascot they want. And we all win because of the big F U to the state.

    I know it’s a pipe dream. (sniff)

  25. I never thought I would say this but this entire state budget meltdown has made me appreciate the government of my home state of Texas. I used to think no one could be more insane but now I see how things could be worse.

    Texas has seen near explosive economic growth in the last 20 years but has kept per capita increases in state spending to less than half of that of California and New York. Alone of the four biggest states Texas has no budget deficit for fy 2009. Texas has a constitutional amendment that automatically routes most of any tax surplus to a rainy day fund that can only be accessed under certain economic conditions.

    For people continuously stereotyped as a bunch of ignorant hicks we seem to do alright on economics.

  26. Well said Shannon.

    Other than our insane TABC, the Dallas poker raids, and occational small town abusing asset forfeture, Texas seems to be much better than most other states.

  27. EJM, you nailed it. When I read, “the fast-paced excitement of Washington, D.C.,” I looked closer for signs of tongue in cheek. Finding no such signs, I began laughing hysterically. Excitement. D.C. In the same sentence. HAHAHAHAHAHAHA!

  28. I don’t know what Wisconsin politicos mean by the “Las Vegas loophole” but California requires out of state mail order & online vendors to collect and remit California sales tax, and California purchasers to pay a use tax in the event that sales tax was not collected on a mail order purchase.

    Another tax strategy put in by the Haydenite progressives in the California legislature is the “unitary tax” on corporate earnings. A California corporation has to remit the total global earnings, and pay income tax on a percentage of global earnings that reflects the percentage of business they do in California.

    The claimed reason for this is to prevent multinational corporations from using accounting to understate California income. But it really gives the California government even more intrusive power than other tax & spend governments. If they audit a corporation, they can demand national & global income reports, not just state income as in the past. Perhaps that is what Wisconsin legislators are planning.

  29. I meant “report the total global earnings.”


  30. Apparently, cutting spending was not on the table at all. Nope.

    Hence, “somewhat”

  31. Hence, “somewhat”

    To clarify, if they’re going to spend more as a state, at least they’re recovering that money from the state to some extent, as opposed to attempting to pull it out of someone else’s ass.

  32. But Texas has the most uninsured children in the Union!!!! :: pulls hair, shrieks ::

  33. There is a fascinating comparison to be written between Madison and Austin. At some point in the recent past, they must have been basically the same city (state capitol, state university, otherwise pretty typical light/service industry towns). Now, Madison is stagnant to shrinking, while Austin has been booming for decades.

    Also, you guys just have to see the front page of the Austin American-Statesman (our local city-ass-kissing paper which many have dubbed the Hatesman as they’re probably the only editorial board that can actually get away with calling firefighters greedy racists). There is an enormous picture of a sign from a town in West Texas reading “Andrew loves god, country and supports free enterprise”. The headline says “Bring on toxic dirt, says West Texas”. It’s about dumping waste from the Hudson River or something. Talk about New York liberals’ ultimate revenge against small-town hick yokels.

  34. Here we go again! Heaping more taxes on struggling Wisconsinites! Only a 1% increase on Gov. Doyle’s wealthy $300,000.00+ a year friends but a seventy-five cent a pack raise in tax on cigarettes that are known to be purchased more by people that are economically disadvantaged. More taxes on the poor. SHAMEFUL! Our property has been re-assessed 3 times in five years. We had a $71,000.00 raise in our property assessment last year for “improvements” when we haven’t been able to afford to do a thing to even maintain our property for 5 years. The market value of our property has dropped almost 30%, but the property taxes have almost doubled in the same time. Wisconsin is anti-business too, no industry support, Doyle and his cronies think they can make jobs for the average Joe by pouring money into trying to bring in high-tech and movie making business into our state. What are these guys smoking? Our state is also friendly to illegal’s, Madison is a sanctuary city for undocumented “immigrants”, they even have home loan programs for them, outrageous! They don’t pay taxes, get health care on the backs of those of us that do, and send their illegal wages straight out of the country. They also drive without insurance, and just disappear when they cause injury, and property losses. Doyle and friends say they are pro-union, but how can any union contractor win a competitive bid against the outlaw contractors that hire full crews of illegal’s that are paid a fraction of union wage in cash under the table. The insanity never stops!

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