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.
4 Comments
Apparently Supervisor Broderick and the State Senate democrats/socialists can't stand the fact that there is something that is not being excessively taxed in Wisconsin. Note that the taxers/spenders do not intend to offset the increased corporate taxes with reductions in personal taxes, but instead they will squander the money on larger, more bloated, government programs.
To be competitive in a world where individuals and businesses can easily relocate to states and countries that actually are welcoming, Wisconsin needs to go the other way and reduce taxes and government spending.
I know to government hacks like Broderick it would be like throwing water on the Wicked Witch of the West. But if we keep on their misguided path to ever-expanding taxes and government, Wisconsin will continue its downward cycle of stagnant household income and population growth. Obviously, to a politician like Broderick who has resisted reform in Milwaukee County government and is more concerned about government employee unions than the taxpayers, these issues are not even on his radar screen.
Gerry, good start but could we not go one step further. Rather than study the loopholes and devise more complexity to close said holes. Let's just make it simple. Use a flat corportate tax. This is fair to all. Easy to administer. Easy to police. As an added benefit, we don't need to continue the perpetual cycle of finding and closing loopholes.
Politicians like to use the tax code to favor their "constituents". Either misguided intentions to help or lobbyist payoff. A tax code should be simple, fair, non-market distorting, and encourage (i.e. not discourage) economic growth. The Federal and Wisc tax codes meet none of these objectives.
Ted Writes,
It is always interesting to look at the relationship of tax rates, tax producing activity and tax revenues.
Most Government Beurocrats equate the addition of higher tax rates or more regulations with additional tax revenue, while the opposite is the case.
The CBO has proven time and time again that reduced tax rates (which can equate to a less regulatory atmosphere) leads to increased revenue due to increased taxable activity.
CBO studies also show increased tax rates (which can equate to a more regulatory atmosphere) will decrease taxable activity leading to lower revenues for the treasury.
Large corporations presently do not locate in Wisconsin because of high tax rates and a highly regulated business atmosphere.
We need to REDUCE TAX RATES AND REGULATIONS TO ATTRACT INCREASED TAXABLE ACTIVITY IN ALL LEVELS OF OUR STATE ECONOMY.
WE ALSO NEED TO SPEND LESS!!
Wisconsin will continue to tinker on the brink of second to third tier states as long as the beurocrats continue to spend without regard to the taxpayor.