“Wait Lady! I’m Paying MORE in Taxes!”

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Apr 15, 2009 No Comments ›› admin

April 15, 2009

“Wait Lady,” said the Jackson County man. “I am paying MORE in taxes and you just said the state has reduced taxes. Are you nuts?”

“And right you are!” I told the man. “You ARE paying more in taxes. But some are paying a LOT less.”

Another man wrote me. “It is a slap in the face that us taxpayers be thought so gullible as to believe that propaganda.” The man went on…

The last property I purchased was about 12 years ago. The property tax {then} was about $900. Last year it was about $2,400. When I complained about it, they always told me ‘state mandate.’”

Why are both of these gentlemen (and most of the rest of us) seeing a dramatic INCREASE in taxes even though previous Legislatures passed laws that – taken cumulatively – actually CUT taxes by $12 billion over the past fourteen years?

Let’s start with property taxes. Over the past several decades property tax exemptions and incentives, largely for business, resulted in the share of the property tax paid by homeowners to increase from 50 per cent of the total to 70 percent.

So while some have seen a decrease in property tax, others like the man above and most of the rest of us have seen a dramatic increase.

The same shift has happened with income taxes. Corporations, particularly large corporations, are paying a much smaller share. The rest of us are paying more.

Robert Tannenwald, Vice President for the Federal Reserve Bank of Boston, is not known for propaganda. In his tax study of all 50 states, he found that since 1980 the percentage of corporate income going to pay state taxes has been cut almost in half.

But when Mr Tannenwold looked at personal income – how much individuals pay in taxes compared to how much we make – that percentage has gone up three times.

He concluded that very large companies have become so far flung and so intricately organized that state officials are simple ‘out gunned’ when it comes to collecting corporate taxes.

To complicate matters, large corporations are very organized when it comes to lobbying many states at a time to pass corporate tax breaks.

Just in the last two years I saw AT&T join with cable companies to deregulate the video/cable business and Hollywood film companies organize to lobby for lucrative film tax credits. Both efforts passed the Legislature despite my ‘no’ vote, and passed in a lot of other state Legislatures on the promise that “economic development” would be the result.

I recently voted to close a loophole that allows very large companies to move Wisconsin profits out of state and escape paying Wisconsin taxes even though these companies located here to take advantage of Wisconsin services. They have been squalling pretty loudly, running radio ads and sending out slick flyers. But when some don’t pay anything, the rest of us pay a lot more. 

Then the whole tax system becomes unfair and we all start squalling.


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