Christian Schneider

Author, Columnist

Category: Taxes (page 2 of 2)

A Very Special Message from WEAC

From the WEAC website, a special message from teachers’ union president Mary Bell:

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At the end, Bell suggests a new way of fixing the budget deficit, saying we should “revisit the thresholds for targeted tax increases.”  I guess that’s one way of putting it.  If WEAC spent half as much time trying to cut costs as they do coming up with innovative ways to say “tax increase,” we’d be out of this budget jam in a week.

I also enjoyed the stylistic flair of having two cameras filming Bell during her speech, then alternating camera angles.  Here’s a cost-saving tip: sell one of the cameras, then give that money to a new teacher. 

See?  We’re already making progress.

The Business Tax Tornado

Yesterday, the news we all expected finally came down:  state tax receipts are expected to be $1.6 billion lower over the next two years, bringing the current budget deficit up to $6.6 billion.

Most of the coverage of this shortfall will be forward looking, and focus mainly on what steps legislators going to take to make up the shortfall.  But it’s also instructive to look at how we got where we are.

Here’s a list of the percentage reduction in tax collections over the previous year for the three largest categories:

Income Tax:            -8.3%

Sales Tax:               -3.3%

Corporate Tax:       -28.0%

The income tax reduction hurts the most, since the income tax is the largest single tax collected.  The 8.3% one year reduction accounts for 86% of the $1.6 billion additional shortfall.

But I would call your attention specifically to the Corporate and Franchise Tax, which is down a whopping 28% from last year.  This represents a $282 million reduction from previous estimates.

It’s not too difficult to figure out why business taxes are down.  If you’ve picked up a newspaper in the last year, you know that business receipts are plummeting, leading to an unemployment rate of 9.4% in Wisconsin.

But secretly, liberal groups are cheering, as plummeting business tax receipts strengthens their most common – and also most inaccurate – talking point: that somehow businesses aren’t paying their “fair share” of the tax burden.   Liberal groups like the Institute for Wisconsin’s Future advocate for higher business taxes on the premise that businesses are paying less in taxes and individual taxpayers are paying more, as a percentage of the total tax burden.  With businesses taking on large losses, and therefore paying less in income tax, it skews the ratio even more in favor of these groups, who like to argue that businesses are “dodging” their tax burden.

This was an incredibly weak argument to begin with.  The business/individual tax ratio could be skewed for any number of reasons.  If the economy was doing well (as it did through the 1990s), individual income could grow at a more rapid rate than business receipts.  As a result, it would appear that individuals were paying more as a percentage of taxes, even though it meant that incomes around the state were actually doing very well.  Conversely, business taxes could drop, as they are now, if businesses leave the state or close down.  This doesn’t mean businesses are paying less of their income in taxes, just that there are fewer of them and that they have diminished receipts on which to pay taxes.

Yet earlier this year, liberal groups had their way and sucessfully lobbied for a massive new tax (called combined reporting) on the same businesses that we now know are swimming in red ink.  Shockingly, the $282 business tax shortfall expected by the Legislative Fiscal Bureau actually includes the combined reporting tax receipts.  So even though they increased business taxes by $186 million, receipts are still $282 million short.  

It doesn’t take a genius to figure out that this punitive new business tax may have actually cost us as much revenue as it created.  New business taxes force higher unemployment, which gives us fewer taxpayers.  Higher business taxes also lead to more expensive goods, which could harm state sales tax receipts.

Furthermore, higher corporate and franchise taxes also force businesses to either move to another state (or country) or scale back their operations, thereby diminishing revenues on which they pay taxes.  (The same phenomenon occurs when states drastically increase cigarette taxes – fewer people buy cigarettes – at least legally – and tax receipts actually drop.)

But this is a dream scenario for lefty groups, which sets a spiral of taxation into effect.  They raise taxes on businesses, which causes business tax receipts to drop.  Then, they argue that businesses aren’t paying their fair share, and lobby for even more business taxes.  The circle is complete – and forces the remaining individual taxpayers in the state to pick up the tab when unemployment skyrockets and business tax receipts drop to virtually nothing.

Your Fringe Conservative Nutcase Update

In the wake of last week’s tax protests, the last person you’d expect to be pushing for smaller government would be Tom Brokaw.  But here he is today, writing in the New York Times:

In my native Great Plains, North and South Dakota have a combined population of just under 1.5 million people, and in each state the rural areas are being depopulated at a rapid rate. Yet between them the two Dakotas support 17 colleges and universities. They are a carry-over from the early 20th century when travel was more difficult and farm families wanted their children close by during harvest season.

I know this is heresy, but couldn’t the two states get a bigger bang for their higher education buck if they consolidated their smaller institutions into, say, the Dakota Territory College System, with satellite campuses but a common administration and shared standards?

Iowa, next door, is having its own struggles with maintaining population, especially among the young. As the Hawkeye State’s taxpayers grow older and less financially productive, the cost of government services becomes more expensive.

Yet Iowa proudly maintains its grid of 99 counties, each with its own distinctive courthouse, many on the National Register of Historic Places – and some as little as 40 miles away from one another. Each one houses a full complement of clerks, auditors, sheriff’s deputies, jailers and commissioners. Is there any reason beyond local pride to maintain such duplication given the economic and population pressures of our time?

This is not a problem unique to the states I have cited. Every state and every region in the country is stuck with some form of anachronistic and expensive local government structure that dates to horse-drawn wagons, family farms and small-town convenience.

Of course, on Brokaw’s own television network – the one he spent decades building into a reputable news organization – he would be labeled a “teabagging racist redneck” for espousing this preference for smaller government.  Who knew Tom Brokaw’s brain was so underdeveloped?  Who could have imagined he took all his marching orders from Fox News?

Are Taxes to Blame for the Packers’ Bad Season?

The Packers’ crappy season last year can be attributable to a number of factors – poor tackling, slow linebackers, bad blocking, etc.  But do taxes play a role in keeping good talent away from Wisconsin?

In Andrew Brandt’s “Busine$$ of Football” column, he says yes – and specifically calls out Wisconsin for its high tax burden:

The states without income tax, I felt, always had an advantage in recruiting free agent players. Teams in Florida, Tennessee and Texas used the fact that their states had no income tax to show players how much more they would take home than teams in high income tax states (like Wisconsin). In some cases, agents actually showed me data from other teams showing how much more the player would make over the life of the same contract in one of those states. In recruiting players for Green Bay, I would always hear from agents how much more a player would make from, say, the Buccaneers or Texans compared to the 6.6-percent state income tax that Wisconsin would take from Packer players. That and, of course, the weather.

From what I remember, in their early days, both the NBA’s Vancouver Grizzlies and Toronto Raptors had a difficult time attracting free agent talent due to the burdensome Canadian tax load.  (And the fact that a player could die waiting in the emergency room to get a sprained ankle looked at.)  It makes sense that agents have gotten so sophisticated that they can now dice the numbers up on a state-by-state basis.

So even if you’re not tuned in politically, oppose Jim Doyle’s tax increases to save the Packers.

League of Confusion

Despite their supposed \”nonpartisan\” affiliation, the League of Women Voters has traditionally been a solid supporter of liberal causes.  A trip to their own website reveals their positions supporting universal health care and gun control, opposing drilling in the Arctic National Wildlife refuge, and on and on.

This week, the Wisconsin State Senate held a hearing on the so-called \”Frankenstein Veto,\” which would prohibit governors from abusing their veto power by stitching together two or more sentences to make an entirely new law that the legislature never intended. In the previous budget, 750 individual words were vetoed out of the bill to come up with a single sentence that transferred $427 million out of the transportation fund and into the general fund – something the legislature never considered in their deliberation of the budget.

Supporters of the bill tend to be the good-government types. Testifying in opposition were groups like WEAC, the state teachers\’ union, who benefited the most from the aforementioned use of the Frankenstein Veto. (One wonders how they would have been testifying had the creative veto authority been used to cut their funding, rather than increasing it.)

The League of Women Voters testified \”for information only,\” in language that can best be described as confusing.

Their testimony said:

The League of Women Voters of Wisconsin is committed to representative government as established by the constitutions of the United States and the State of Wisconsin.  For this reason, we register our concern with AJR1 and SJR5.  While the proposed amendment purports to ban the partial veto of an appropriations bill, it fails to solve the basic problem of whether or not the Governor has the ability to change the intent of appropriations passed by the Legislature.

The current amendment continues to allow for deleting parts of a single sentence.  Furthermore, it would permit governors to delete larger portions of an enrolled bill as long as they do not \”create a new sentence by combining parts of 2 or more sentences of the enrolled bill.\”

Our concern about the partial veto is not a partisan one.  Governors of both parties have used the partial veto extensively.  The laws that result from the exercise of the partial veto frequently contain new taxation or new programs that have not been considered or enacted by the Legislature.  Whether or not we agree with the results of these vetoes, the fact remains that the people of the State of Wisconsin, represented in the Senate and Assembly, are denied participation in the process.This particular amendment attempts to address that failing.  However, as written it would not eliminate the Governor\’s ability to create new taxation or programs through a partial veto in the final step of the budget process.

Huh?

So they are for representative government, and think the governor\’s current veto authority violates that principle.  But they oppose any action to rein it in, because it doesn\’t go far enough?  They say that the proposed amendment would allow governors to veto large sections of the bill – is this something they oppose?  This is similar to the item veto virtually every other state has.  Do they think the governor should only be able to veto the whole budget?

The more likely scenario is that they wanted to oppose the bill to side with the governor, but they couldn\’t be on the wrong side of a good government issue.  So they used the tactic of saying the bill doesn\’t go far enough – which puts them in the strange position of having to argue how Wisconsin is better off if the legislature doesn\’t pass an amendment that gets closer to their stated goal of \”representative government.\”

Gouged by a Nut Roll

I\’m pretty sure I\’m the only one in our office building that eats the Pearson\’s Nut Rolls out of the vending machine in the basement. I can see where people would think they\’re gross, but I\’m a sucker for nougat.

\"\"

Anyway, yesterday I noticed the price of said nut rolls has jumped from 70 cents to 80 cents.  That would be a 14.2% increase in one day.  Then I noticed a piece of paper taped to the top of the vending machine that explained it:

The surge in energy prices has made processing and transportation from our suppliers significantly more expensive.

So, the vending company is passing on the increase in gas prices on to me, a loyal salty nut roll consumer.  This is an outrage. Businesses should be able to recoup their operational costs on the backs of customers.  Isn\’t Governor Doyle proposing banning the vending company from passing the gas price increase on to my snacks?

You can see the whole vending company letter here.

Wisconsin’s Gas Tax Follies

George Will takes on Wisconsin’s minimum markup law on gas in this column today.  He says:

Pelosi and others who just know, evidently intuitively, the “fair” price of gasoline must relish what has happened in Merrill, Wis., where Raj Bhandari owns a BP gas station. He became an outlaw when he had what seemed, to everyone but the state’s government, a good idea. He gave a discount of 2 cents per gallon to senior citizens and 3 cents for people who support local youth sports programs.

But Wisconsin’s Unfair Sales Act requires retailers to sell gasoline for 9.18 percent above the wholesale price. The state’s marvelously misnamed Department of Agriculture, Trade and Consumer Protection has protected consumers from Bhandari’s discounts by forcing him to raise his prices. Some customers now think he is price gouging.

Some Wisconsin legislators are considering changing the Unfair Sales Act to allow retailers to discount gasoline to benefit things those legislators think should be benefited. In Madison, Wis., as in Washington, D.C., it is considered eccentric to think that government should butt out, let people buy and sell as they please, and let markets equilibrate.

“Underpaying” Business Taxes

Today, the Institute for Wisconsin’s Future released a “study” that purports to show that Wisconsin businesses “underpay” their taxes by $1.3 billion. The report uses data from Ernst and Young that estimates Wisconsin businesses pay 35% of total state tax receipts, as opposed to a 40% average nationwide. Additionally, Wisconsin businesses pay 47% of local taxes, compared to 52% nationwide. The study then concludes that if Wisconsin businesses paid the national average, they would pay $1.3 billion more, and individuals would pay that much more less. The report says:

The combined underpayment of state and local taxes means that Wisconsin’s corporate sector is $1.3 billion short of what it would be paying, if only it brought its share up to the national average.

As a taxpaying partner in supporting state and local services, Wisconsin’s corporate sector ranks 41st among all the states, according to Ernst & Young. This is a Bottom Ten ranking that should embarrass corporate leaders.

This is a pretty reliable talking point for liberal advocates – that somehow businesses are sticking it to taxpayers by neglecting to pay their “fair share” of taxes. In fact, versions of the term “underpayment” appear seven times in the eight page paper, as if businesses are willfully disobeying the law.

In fact, businesses pay the amount they owe. And the less they owe, the more capital they have available to employ Wisconsin taxpaying citizens. If someone believes businesses aren’t paying their fair share, then their concerns are best taken up with the Legislature and not the businesses themselves.

Furthermore, such a simplistic analysis ignores some important trends. Is it possible that Wisconsin businesses are paying less as a percentage of total taxes because businesses are leaving the state? If there were fewer businesses in Wisconsin to pay taxes, the total amount they contribute would certainly be less. Are businesses paying less as a percentage because individuals are paying more? That could be a sign of a good economy, if individual incomes (and tax receipts, as a result) are up.

In fact, it would be just as easy to get to their magic “40%” number by cutting taxes for individuals, since businesses would be paying more as a percentage of tax receipts. Is this what the Institute for Wisconsin’s Future is advocating? I’m guessing not. That would explain why so many states with high income taxes are at the top of the “scale” the study cites – is this something that they consider to be desirable?

Finally, does the passage of the “single sales factor” business tax break (signed by Democratic Governor Jim Doyle) have anything to do with the smaller business tax share? (It is buried in a footnote.)

The report doesn’t address any of these questions, which shows that it really isn’t a serious attempt to discern an appropriate tax level for businesses. It briefly cites the tax statistics, then is padded with typical shots at Wal-Mart, Wisconsin Manufacturers and Commerce, and banks. In fact, if businesses were forced to pay more in taxes, more would probably choose tax-friendlier states to do business, and there would be fewer employees paying taxes to local and state governments. Minnesota’s JOBZ program attempts to lure Wisconsin businesses by completely eliminating sales, income and property taxes – which means they are dying for businesses to come in their state and “underpay” taxes.

Normally, such a report wouldn’t merit a rebuttal, but today’s Milwaukee Journal Sentinel gave it a story without a single dissenting viewpoint, so a counterpoint was necessary.

\”Underpaying\” Business Taxes

Today, the Institute for Wisconsin\’s Future released a \”study\” that purports to show that Wisconsin businesses \”underpay\” their taxes by $1.3 billion. The report uses data from Ernst and Young that estimates Wisconsin businesses pay 35% of total state tax receipts, as opposed to a 40% average nationwide. Additionally, Wisconsin businesses pay 47% of local taxes, compared to 52% nationwide. The study then concludes that if Wisconsin businesses paid the national average, they would pay $1.3 billion more, and individuals would pay that much more less. The report says:

The combined underpayment of state and local taxes means that Wisconsin\’s corporate sector is $1.3 billion short of what it would be paying, if only it brought its share up to the national average.

As a taxpaying partner in supporting state and local services, Wisconsin\’s corporate sector ranks 41st among all the states, according to Ernst & Young. This is a Bottom Ten ranking that should embarrass corporate leaders.

This is a pretty reliable talking point for liberal advocates – that somehow businesses are sticking it to taxpayers by neglecting to pay their \”fair share\” of taxes. In fact, versions of the term \”underpayment\” appear seven times in the eight page paper, as if businesses are willfully disobeying the law.

In fact, businesses pay the amount they owe. And the less they owe, the more capital they have available to employ Wisconsin taxpaying citizens. If someone believes businesses aren\’t paying their fair share, then their concerns are best taken up with the Legislature and not the businesses themselves.

Furthermore, such a simplistic analysis ignores some important trends. Is it possible that Wisconsin businesses are paying less as a percentage of total taxes because businesses are leaving the state? If there were fewer businesses in Wisconsin to pay taxes, the total amount they contribute would certainly be less. Are businesses paying less as a percentage because individuals are paying more? That could be a sign of a good economy, if individual incomes (and tax receipts, as a result) are up.

In fact, it would be just as easy to get to their magic \”40%\” number by cutting taxes for individuals, since businesses would be paying more as a percentage of tax receipts. Is this what the Institute for Wisconsin\’s Future is advocating? I\’m guessing not. That would explain why so many states with high income taxes are at the top of the \”scale\” the study cites – is this something that they consider to be desirable?

Finally, does the passage of the \”single sales factor\” business tax break (signed by Democratic Governor Jim Doyle) have anything to do with the smaller business tax share? (It is buried in a footnote.)

The report doesn\’t address any of these questions, which shows that it really isn\’t a serious attempt to discern an appropriate tax level for businesses. It briefly cites the tax statistics, then is padded with typical shots at Wal-Mart, Wisconsin Manufacturers and Commerce, and banks. In fact, if businesses were forced to pay more in taxes, more would probably choose tax-friendlier states to do business, and there would be fewer employees paying taxes to local and state governments. Minnesota\’s JOBZ program attempts to lure Wisconsin businesses by completely eliminating sales, income and property taxes – which means they are dying for businesses to come in their state and \”underpay\” taxes.

Normally, such a report wouldn\’t merit a rebuttal, but today\’s Milwaukee Journal Sentinel gave it a story without a single dissenting viewpoint, so a counterpoint was necessary.

The Cigarette Tax Paradox

I was talking with one of my guys in the Capitol the other day, and he mentioned that his office was getting a lot of calls opposing Governor Doyle\’s proposed $1.25 cigarette tax increase.  Apparently, some stores are passing out cards with their cigarettes that say \”call your legislator and oppose the increased cigarette tax.\”  (Someone call the good government groups – someone is trying to influence legislation without their consent!)

There\’s a more interesting angle, though.  He said that 90% of the people that call to attack Doyle\’s tax increase suggest something else to tax.  They say, \”why don\’t you tax the rich,\” or \”try taxing alcohol more,\” or suggest taxing porn or fast food.

So here you have a group of people who have been targeted to pay a new politically popular tax suggesting other people should pay a higher tax that they deem politically popular.  They\’ve bought into the whole notion that you should tax people based on how much we like them.  They think we should tax people that the public dislikes – without realizing that they are those people.

Not-So Compelling Tax Increases

“We can’t make you do anything, but we can make you wish you had.”

– Corporal Walter Gordon in the book “Band of Brothers” describing the Army’s motivational philosophy

 

Disgruntled taxpayers are often reminded that taxes are necessary to fund basic services; schools need to teach kids, local governments need police officers and the elderly need prescription drugs. As if that wasn’t justification enough for paying taxes, Governor Jim Doyle has a brand new one for you – you need to pay higher taxes to keep yourself from doing bad stuff.

Doyle’s biennial budget bill is chock full of tax increases whose explicitly stated purpose is to keep you from doing things your governor deems unseemly. Doyle proposes raising the cigarette tax by $1.25 per pack, citing a study from the Campaign for Tobacco Free Kids that says a tax increase of $1 per pack would result in 42,000 Wisconsin adults quitting smoking. His budget raises the fee on filing taxes by paper because he wants more people to file electronically. Doyle proposes raising the fee on dumping trash to keep out of state businesses from dumping in Wisconsin (His budget also raises the fee on obtaining a copy of a death certificate – so if you’re thinking about dying, you might want to get that out of the way soon).

So begins a new era in Wisconsin – the era of the “coercive behavior tax.” We are now seeing taxes with the stated purpose of motivating people into certain behaviors the government sees fit, rather than just funding necessary programs. The government can’t make you do certain things, so they just want to make you wish you had.

The idea of using taxes to compel citizens to do things isn’t new. For years, interest groups have pitched the idea of “sin taxes” on everything from pornography to fast food to illicit drugs (making my Friday nights way more expensive). Environmental groups haven’t made any secret of the fact that they prefer higher gas taxes, to keep people from driving more. There’s even a bill in the Wisconsin Legislature that would raise the tax on liquor and beer – the authors argue that the liquor tax in neighboring states is generally three times higher, which of course means that ugly guys are 66% less likely to get any lovin’ in Minnesota.

Yet while Doyle recognizes one basic tenet of economics – if you make something more expensive, people will do less of it – he completely ignores the flip side. That is, if you make something less expensive, individuals will do more of it. We could easily compel people to file their tax returns electronically by giving them a tax credit to do so – but the first thing Doyle thinks to do is to raise the fee. This exposes the whole idea of compelling certain behaviors through tax increases as nothing more than a common cash grab.

Somehow, it’s hard to believe Doyle is as interested in keeping smoking down as he is in the $400 million the tax is expected to raise for the state. According to the U.S. Department of Agriculture, cigarette use has declined an average of 2.3% per year since 1996, in part because “not dying” has suddenly become fashionable. It appears society is already taking care of the smoking problem – unfortunately, stagnant cigarette tax revenues haven’t taken care of Jim Doyle’s spending addiction.

What’s also interesting is that Doyle openly recognizes that increased fees dissuade people from doing things. Yet he only publicly acknowledges this effect for the fee increases that have been poll tested. For instance, his budget proposes increasing the fee on applying to the University of Wisconsin. Won’t that also have the effect of suppressing applications, just like the effect the cigarette tax increase has on smoking? Won’t doubling the real estate transfer fee make it more difficult to buy a home? (Although, admittedly, if the extra couple hundred bucks puts a home out of reach for you, it’s time to ask your night manager for a raise. I mean, you have a G.E.D. – it’s time to show it off!) Is the new hospital tax going to finally rid us of the scourge of people receiving medical treatment for their illnesses?

Government already has the ability to compel certain behavior by passing laws outlawing certain acts. For instance, it is illegal for you to shoot me in the face – unless, of course, you catch me in your house using your nose hair clipper (again). If we don’t want people to smoke, we should be honest about it and pass a law outlawing it, rather than taxing a legal product to death. However, if we do that, it kills the state’s revenue stream – which is what this is really all about.

If we do want to use tax policy to coerce Wisconsin citizens to do certain things, it should be in the form of lowering taxes. For instance, a groundbreaking bill last session lowered taxes for businesses that hired disabled workers. The legislature often exempts items from the sales tax that promote sales of Wisconsin products. Better yet, coolness would reach record highs in Wisconsin if we exempted white t-shirts and hair gel from sales taxes to get more people to dress like the Fonz.

Regardless of the justification for these tax increases, they always have unintended consequences beyond simply enhancing revenue for the state. For example, raising the cigarette tax means taxing poor people, who smoke at a predominantly higher rate. Additionally, retailers who sell cigarettes will raise prices on other goods to make up for the revenue they lose when fewer people buy smokes.

For the sake of argument, let’s say Doyle is successful in getting people to quit smoking. By raising the tax so much this one time, he’s built in hundreds of millions of dollars in spending. As people kick the habit, money flowing to the state will decline, meaning that tax revenue is going to have to come from somewhere. Building in all these costs based on a program with declining revenue is a recipe for a general tax increase elsewhere.

Let’s just hope these tax increases coerce the legislature to put out this flaming bag Doyle has left at their doorstep, for the good of Wisconsin taxpayers.

The Conservative Case Against TABOR

“Sellout.” “Traitor.” And worst of all, “moderate.” These aren’t words being used to describe enemy combatants in the war on terror – they are used by some conservatives to describe legislative Republicans that have reservations about the proposed Taxpayers’ Bill of Rights (TABOR).

The debate over TABOR has been co-opted by normally common sense conservative talk show hosts. If someone is “conservative,” then they favor a broad constitutional amendment to control state and local taxes and spending. If someone is “moderate,” then they resist such a plan, and likely have set fire to a hospital for puppies at some point.

On the legislative side, TABOR is being pushed by Frank Lasee, a potential congressional candidate who has been preening all around the state in favor of his plan, which he pilfered from Colorado. Colorado’s last two imports to Wisconsin, as you may remember, are Chronic Wasting Disease and disastrous ex-Colorado Rockie Jeffrey Hammonds. Lasee has grown his hair out, bought a bottle of tanning oil, and lost weight to prepare himself for the fight. In fact, he could stand to lose another 50 pounds – named Jeff Wood. Wood, as you may know, is the educationally challenged second term representative from Chippewa Falls, whose knowledge of Wisconsin has grown to the point that he can now point the state out on a map.

Support for TABOR in the state is strong – some polls suggest that 80% of citizens favor a constitutional spending limit, while support is even at 60% among Democrats. This support was barely beaten out by “Would you like a million dollars?” (81%), “Do you like pizza?” (83%), and “Would you like two million dollars?” (83.5%). This support has caused shrinkage among conservatives who normally would cringe at the idea of a heavy-handed constitutional imposition of fiscal policy on local governments.

In fact, TABOR may not be the electoral silver bullet conservatives think it is. In several races around the state in November 2004, voters had a choice between pro-TABOR and anti-TABOR candidates. Despite apparent public support for the plan, voters in Kenosha (Priebus vs. Wirch), the North Woods (Tiffany vs. Breske), and Green Bay (Drzwiecki vs. Hansen) rejected the pro-TABOR candidate. The one Republican that did pick up a seat, Dan Kapanke, was a local government official opposed to TABOR. While TABOR supporters look to Mary Panzer’s embarrassing defeat for comfort, Panzer had problems in her heavily conservative district (she is pro-choice), and her handling of the TABOR issue caused her more problems than it would have helped.

There are two camps of conservatives on TABOR – those that believe local governments work best when they can respond to the needs of their constituents on a personal level, and the “ends justify the means” conservatives, who recognize that property taxes are out of control and see an opportunity to do something at the state level. Both sides have excellent points, but the local control conservatives have absolutely nothing to apologize for in resisting TABOR.

One of the central tenets of conservatism is the idea that government works best the more locally it is administered. Conservatives resist top-down government, believing that governance works best when citizens are involved and informed. Conservatives have also traditionally recognized the sanctity of the Constitution – a limited document that can fit in your pocket, but which sets out the rules of the game. Such specific fiscal policy in the Constitution should horrify traditional conservatives, and sets the precedent that anything goes in the Constitution, as long as we can sneak it by a Democratic Governor. If fact, one Assembly member already has proposed photo identification for voting as a constitutional amendment. Can concealed carry really be far behind?

The debate over TABOR has turned into an ugly split between the Republican controlled Assembly and Senate in Wisconsin. The Assembly, laying down like a lap dog to Frank Lasee’s political ambition, is widely believed to be more pro-TABOR, although the likelihood of the votes being there is still very much in question. The Senate isn’t even close. One explanation for this phenomenon can be found in the demographics of Assembly versus Senate districts. Assembly districts are one third the size of Senate districts, therefore their constituents are more likely to be ideologically narrow. Senate districts, taking in so much more area, tend to have more diversity of thought, and therefore tend to be more moderate demographically. Plus, there’s a lot more land for the black helicopters to fly over.

As an aid to those conservative legislators who oppose TABOR but are afraid to stand up to the “conservative” talk show hosts who favor constitutional spending caps, here are some talking points:

TABOR Will Guarantee Perpetual Democratic Majorities
This year, Democrats in the previously solid Republican Colorado Legislature gained majorities in both houses for the first time in years. This would be like the Republican National Committee picking Al Sharpton to run their operations for the 2008 presidential campaign. The problem that has occurred in Colorado is identical to the one that would occur in Wisconsin – writing conservative philosophy into the Constitution removes any reason to elect conservatives to the Legislature. In effect, the Constitution becomes the only Republican anyone needs, because it is tax issues that elect Republicans.

In fact, TABOR would be in direct conflict with social conservatives. With the types of Democratic majorities it would produce in Wisconsin, you can look forward to getting an abortion at a Kwik-Trip, gay marriage will be mandatory for single people over 25, and the only weapon allowed in your home will be a salad shooter. Taxes are an important piece to the puzzle, but not the only one – and questions of taxation have to be settled in elections for Republicans to retain control, not in the Constitution.

TABOR Saves Programs That Are Bad for Property Taxpayers
If government in Wisconsin was reformulated from scratch, there’s no way the current system of local aid would make the cut. Local governments blame the state for high property taxes, for not providing enough aid. The state government blames local governments for not making the tough choices in setting their local budgets. In the meantime, property taxpayers don’t know whom to blame for escalating taxes with the inter-governmental finger pointing.

The only way to fix this quandary is to consolidate taxing and spending decisions at the local level, which means elimination of shared revenue and allowing more local taxing options (such as a local sales tax). The government that raises the tax should spend the tax, to provide more accountability and clarity to taxpayers.

TABOR would make changing to such a system impossible, even though it represents a shift in taxation, rather than an increase. Similarly, taking technical colleges off the property tax would save 7.5% on property taxes – but would require increased funding at the state level prohibited by TABOR. Two thirds funding for schools would have been impossible. Streamlined sales tax? Over.

Past Democratic legislatures have found non-constitutional ways to control local revenues in areas where they were needed. When school property taxes were increasing 10% per year, the Democratically controlled Legislature worked with Tommy Thompson in implementing school revenue caps, which have saves billions in property tax dollars, have yet to be repealed, and have done nothing to deteriorate the quality of our school districts.

“Save Me From Myself”
During the Thompson era, state spending routinely increased 7%, 8%, or even 10% per year (much of this due to two-thirds funding of school
districts). In fact, the 1999-2000 budget saw a nearly 13% increase in the general-purpose budget (47 Assembly Republicans voted for this budget, including John Gard, while all but one Senate Republican voted against it). So Republicans who routinely voted for Thompson budgets to now insist that TABOR is necessary are merely engaging in a hypocritical tantrum.

In fact, Wisconsin Manufacturers and Commerce, who has been lobbying for TABOR, issued a press release calling for more Medicaid spending, to keep insurance costs for employers down. Never mind that TABOR would make this increased investment in Medicaid NEARLY IMPOSSIBLE at the state level.

It would be interesting to see a Republican run for Governor on a pro-TABOR platform. The pitch would go something like this:

“We need TABOR because we can’t trust the Legislature or the Governor to limit property taxes. In fact, you can’t trust me as your future Governor to limit your property taxes, so we need to pass a bill that I support, and is necessary because I can’t be trusted to sign a property tax freeze into law. While I support property tax relief, it is likely that I will become a tool for the teacher’s union and other big spending special interest groups.”

Wisconsin Republicans have lost sight of the true adversary in the property tax debate – Governor Jim Doyle. While the Assembly and Senate fight about TABOR, Jim Doyle, The Indian Tribes, and Stan Johnson’s mustache will waltz into office for a second term. While Frank Lasee tours the state to convince people how incompetent state legislators are, he is himself setting a shining example for his theory.

Whatever the final outcome of the TABOR discussion, Republicans still should get more credit for holding down property taxes than their flaccid Democrat counterparts. In the face of a mounting public outcry over property taxes, the Democrats either oppose property tax relief or propose more state funding for local services, which only serves to further exacerbate the problem.

Property taxes in Wisconsin are too high and are growing too fast. With this, there is no disagreement. The solution, however, lies not in a permanent constitutional amendment, but in citizen activism and responsible legislators. Conservatives who support local control should not cower to talk show hosts, but stand up for true representative government.

In March of 2004, in paying tribute to the late U.S. Senator Daniel Patrick Moynihan, columnist George Will recognized Moynihan as the “premier intellectual in the U.S. Senate.” Will then followed up that this is akin to being “the tallest building in Topeka.”

It is time for legislators with big picture perspective and philosophical courage to stand up to TABOR. Politics is an argument – TABOR is a muzzle.

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