I am pleased that many of my colleagues voted recently to approve a resolution I sponsored to urge the Wisconsin State Legislature and Governor to require corporations to provide more transparent reporting of tax liability and tax reduction methods. As large publicly traded corporations use tax loopholes to lower their taxes, the burden is shifted to small, locally-owned business and the hard-working residents of Wisconsin.
State passage of this bill would be a great first step to exposing how lopsided our system is.
The Corporate Tax Accountability Act (Wisconsin State Senate Bill 367) would require all publicly traded corporations doing business in Wisconsin to submit annual statements to the Department of Revenue to provide greater transparency of taxes paid by corporations in Wisconsin as well as techniques used by corporations to reduce their tax burden or avoid paying state income taxes at all.
A recent study performed by the Institute for Wisconsin's Future found approximately two-thirds of publicly traded companies doing business in Wisconsin paid NO income tax at the state level in 2004. These include major employers in Milwaukee County. How do they do it? They fly under the radar. They use tax law loopholes to drastically lower their tax burden without breaking any laws.
As a result, Wisconsin ranks 38th in corporate tax collections.
The study provides solid evidence that Wisconsin's tax base has shifted over the years:
- While individual property tax payers provided 36% of state and local tax revenue in Wisconsin in 2004, corporate income taxes accounted for only 3% of the total.
- In 1970, manufacturing accounted for 18% of the property tax burden. It shifted drastically to 3.6% in 2005, according to the Legislative Fiscal Bureau.
- Residential property owners now provide 70% of state revenue, up from 50% thirty years ago.
- If Wisconsin businesses paid the same amount of state and local taxes as the national average, Wisconsin would see an additional $1.3 billion in revenue each year, an amount equal to Milwaukee County's entire 2008 budget.
- When corporations use loopholes to legally avoid paying their fair share of taxes, the burden is shifted to individual property tax payers. That is just plain wrong. Our hard-working residents and small-business owners should not be subsidizing corporations that skirt the law.
Now is the time to reverse this trend. Instead of relying on increasing the level of personal property taxation, we should instead end the practice of letting large corporations get away with obscene tax exemptions.
As a Milwaukee County Supervisor, part of my job is to make sure the State funds the services that counties are mandated to perform. That's why I was proud to sponsor this resolution urging the State of Wisconsin to gather more information on taxed (or the lack thereof) collected. Milwaukee County taxpayers should not have to pick up the slack.
Milwaukee County Supervisor Gerry Broderick represents the 3rd District. For more information on the study compiled by the Institute for Wisconsin's Future, visit www.wisconsinsfuture.org.