• Beginning May 1, 2010, the tribe can deduct payments made to counties totaling $1,000 for every acre of land owned by the U.S. government in trust for the tribe located within each county’s jurisdiction in July, 2003. The LFB informs me that during July 2003 the Ho-Chunk had approximately 2,300 acres of trust land that could result in a reduction in their annual state payment of $2.3 million.
• During a 10-year period from May 1, 2009 to May 1, 2019, the tribe could deduct the amounts it paid for public works projects that benefit both the tribe and the state. Deductions would be limited to no more than $1.0 million in any one year and the total deductions for the period could not exceed $5.0 million. That means there could be an average annual deduction of $500,000.
• The  tribe can also deduct any additional amounts paid by the tribe for projects that the state and the tribe agree provide a substantial public benefit in areas of economic development, infrastructure, health, safety, or welfare. These deductions would begin May 1, 2019, would be limited to a total of $4 million, with annual deductions limited to a maximum of $1 million. 

One year ago, I blogged about the problems associated with feel-good fat taxes. 

As far-fetched as a fat tax may sound (most of the revenue often fails to get to obesity-prevention programs or  healthy food  subsidies), Alabama has taken the extraordinary step of mandating that its state employees get into shape in two years or be forced to pay more for insurance.

Some states, according to the National Conference of State Legislatures, provide incentives for people to adopt healthier lifestyles.  Workers in Ohio get $50 for having health assessments and another $50 if they follow medical instructions.

Arkansas and Missouri give monthly discounts on premiums for employees who take health risk assessments and enroll in programs to reduce obesity and stress. Those states differ from Alabama in that they offer incentives instead of punishments. Alabama has become the first state to charge workers who fail to try to lose weight.

Some medical experts oppose the Alabama plan, saying it's too punitive. Read more about Alabama’s plan here.

WEAC (The Wisconsin Education Association Council), the state teacher’s union has released its 2009-10 Legislative Agenda. Topping WEAC’s list of priorities is repealing the QEO (Qualified Economic Offer).

This is another reason the November election is critical. If Democrats maintain control of the state Senate and take back control of the state Assembly, a legislature controlled by Democrats along with Governor Doyle will kill the QEO. The result will be a property tax explosion.

Some background is in order. The QEO was instituted by the Legislature after angry taxpayers statewide demanded action be taken to stop the tidal wave of huge property tax increases. Since its inception, the QEO has helped keep property taxes from being even higher than they already are.

Under the QEO, the compensation package for teachers including salaries and benefits is to be limited to a 3.8 percent increase. Prior to the implementation of the QEO, settlement packages with teachers were much larger, forcing a tremendous burden on taxpayers.

According to data from the Wisconsin Association of School Boards (WASB) that used figures from the Wisconsin Department of Public Instruction, the average total teacher salary and benefit package increase in the years before the QEO was 8 percent during 1984-85, 8.4 percent during 1985-86, 7.7 percent during 1986-87, 7.4 percent during 1987-88, 7.1 percent during 1988-89, 7.3 percent during 1989-90, 7.4 percent during 1990-91 and 6.9 percent during both 1991-92 and 1992-93.

Enough was enough. Taxpayers protested. The Legislature heard and listened, and the QEO was adopted.

In reality, most school districts do not stay within the QEO, agreeing to settlements that surpass the 3.8 percent limit. The WASB reports that the average total package of salaries and benefits was 4.29 percent during 2006-07, 4.25 percent during 2005-06, and 4.31 percent during 2004-05. The percentages are higher than the rate of inflation, and more than likely are greater than increases provided in the private sector.

The QEO must remain intact. Without the QEO, spending and taxes will rise substantially, more people will leave their homes, more people will leave the state, and more jobs will be lost. We cannot afford to lose the QEO.

Proponents of large cigarette tax increases like to point to the additional revenue the tax hikes will bring in to the state Treasury. There is one problem with that assumption. What happens if many of the revenue sources, the cigarette smokers, stop smoking?

Maryland politicians are now dealing with that very scenario. While they begrudgingly admit some satisfaction with fewer cigarettes being sold in Maryland, they are less than thrilled that the smokers have simply gone to nearby Virginia where the cigarette tax is much cheaper. Maryland has lost sales and much-needed revenue and has reacted by making it a crime to carry two packs of cigarettes that weren't purchased in Maryland.

The Maryland experience demonstrates the folly of government depending on cigarette tax increases. Read more in the Wall Street Journal.

The non-partisan Wisconsin Taxpayers Alliance (WISTAX) says it is assessments.

In a nutshell, WISTAX says, “A rising (or falling) assessment does not necessarily mean higher (or lower) property taxes.”

WISTAX goes into more detail in this report.

The news media gives little attention to Tax Freedom Day, the day the average American has earned enough money to pay this year's tax obligations at the federal, state and local levels. It reports even less on the Cost of Government Day.

Cost of Government Day is the date of the calendar year on which the average American worker has earned enough gross income to pay off his or her share of spending and regulatory burdens imposed by all levels of government, federal, state and local. According to the Americans for Tax Reform, Cost of Government Day is far worse than Tax Freedom Day.

This year, the national Cost of Government Day fell on July 16. Wisconsin’s Cost of Government Day, the 37^th latest in the country, is today. July 17.

Americans for Tax Reform in its 2008 report on Cost of Government Day (COGD) writes:

“Working people must toil on average 197 days out of the year just to meet all costs imposed by government. In other words, the cost of government consumes 53.9 percent of national income.

Cost of Government Day falls four days later in 2008 than last year’s revised date of July 12. In 2008, the average American will have to work an additional 17 days out of the year to pay off his or her cost of government compared to 2000, when the COGD was June 29.

In fact, since 1977, COGD has fallen later than July 16 in only four of those 32 years -in 1982 and 1983, and in 1992 and 1993. The driving factor for this development is the fact that all components of the cost of government – federal spending, state and local spending, and regulation – are now increasing faster than national income.

This increase in the cost of government stands in sharp contrast to at least two periods in the past thirty years: COGD fell sharply from a high of July 20 in 1992 to June 29 in 1999 and 2000. In addition, COGD declined from a record high of July 23 in 1982 to July 3 in 1989. Both of these declines resulted from a combination of restraining the growth of federal spending while the economy was booming and rapidly increasing national income.”

The key is taxing and spending. The burden on taxpayers is reduced when restraints are placed on spending. In Wisconsin, taxing and spending levels remain too high, meaning Wisconsin taxpayers have to work over half a year just to earn enough income to pay off their commitments to all levels of government.

You can read more about the Cost of Government and Cost of Government Day here. 

I have signed a pledge issued by Americans for Tax Reform that I oppose tax increases.

Cost of Government Day is finally here. Its arrival is little reason to celebrate.

Many Wisconsinites spend a great portion of each year living in Florida, attracted by good weather and a favorable tax climate.

These snowbirds need to be aware that they might be targeted for tax increases.

The Wall Street Journal reports:

“Florida voters in January amended the state's constitution to further limit property taxes. The state has long protected "homesteaders," or Floridians who live in their houses for more than six months of the year, by limiting the increase in the assessed value of their homes to 3% annually. In January, voters built on those limits. Over time, the difference between the assessed value and the market value of homesteaders' properties becomes substantial; the new measure ensures that homesteaders who move to a new home won't lose the tax benefits they've built up in their old home.

Such changes are already putting the squeeze on Florida school jurisdictions, which may tap "snowbirds" -- retirees who live in the state only part of the year -- to make up lost revenues. Those out-of-state property owners aren't eligible for most of Florida's property-tax protections.

Mr. Calabro (Dominic M. Calabro, president and CEO of Florida TaxWatch) is most critical of a Florida proposal on the ballot this November that would further roll back property taxes and increase state sales taxes to do so. With no state income tax, Florida relies on its 6% sales tax to a larger degree than any state save two -- Washington and Tennessee.”

The Wall Street Journal reports Florida is one of several states looking to curb property taxes.

Read the entire article.

So far, only a handful of states have decided to raise taxes to address their budgets.

The 2007-09 Wisconsin budget that I voted against that was signed into law increased taxes. So did the budget repair bill that I voted against.

it is unfortunate that Wisconsin has failed to follow the path taken by most other states and reject tax increases during tough budget times.

Stateline has the story.

The headline in the Wisconsin State Journal (WSJ) sure sounds good:

“Wisconsin falls from ranks of top 10 highest-taxed states for first time since 1980”

According to the University of Wisconsin and the non-partisan Wisconsin Taxpayers Alliance (WISTAX), this would be only the second time since 1969 Wisconsin has not been in the top ten in taxes nationwide.

The researchers looked at data from 2006, the latest year that data was available.

How did this happen?

As the WSJ reports, “Wisconsin's taxes actually rose slightly in the fiscal year ended in June 2006 but those of other states rose more quickly.”

Translation: You’re still paying high taxes, Wisconsin, and they’re not going down.

I have written that state and local governments take a good-sized portion of your income. The painful trend continues.

According to the WSJ, “All state and local taxes amounted to $22.3 billion, or 12.3 percent of personal income in Wisconsin in 2006. That was up slightly from the previous year, when taxes accounted for 12.1 percent of personal income. The national average in 2006 for state and local taxes was 11.6 percent of personal income.”

Remember, the Legislature approved and Governor Doyle signed into law the 2007- 2009 state budget that increased taxes and fees by $763 million. I voted against the budget because it taxes and spends too much and beyond the rate of inflation. Shortly after the general legislative session ended mid-March, the state learned it had a budget revenue shortfall of $652.3 million. The amount of incoming revenue was not enough to fund committed spending.

Wisconsin also has a structural deficit of over $1.6 billion. A structural deficit occurs when future projected revenues fail to match future expenses.  It is clear Wisconsin has yet to solve the propensity to tax and spend.

If you listen to the positive spin coming out of Governor Doyle’s office, the good news is Wisconsin is trending in the right direction. I would hold that thought until we see the impact of the spending and borrowing in the most recent budget, and in the bill referred to as the budget repair bill.

Here is the WSJ article.

Here’s a report from the Wisconsin Taxpayers Alliance.

On April 1, 2008, I blogged about a Competitive Wisconsin Inc. (CWI) report that used 33 measures in six categories to show Wisconsin’s ability to compete nationally continues to sag. 

The nonpartisan Wisconsin Taxpayers Alliance (WISTAX) took the tables and charts from the CWI report and assigned grades to Wisconsin in all 33 benchmarks.

WISTAX reports, “Of the 33 measures, Wisconsin had four grades in the A range, 12 each in the B and C ranges, and five in the D range. The average grade over all measures was just below 2.5, or B-/C+. The two areas with the strongest grades were quality of life (averaging about a B) and workforce excellence (B- average). Low grades were given to new business creations (D+) and venture capital per worker (D), both of which suggest that future job creation could be at risk. Also disconcerting was the steady rise in energy costs (C-), once an area of decided advantage.”

Here is the entire WISTAX report.

No matter what economic study or report you look at, the conclusion is always dismal for Wisconsin when it comes to taxes.

The latest comes from the Small Business & Entrepreneurship Council.

Small Business & Entrepreneurship Council chief economist Raymond Keating has just completed the “Business Tax Index 2008” for all 50 states and the District of Columbia.

Using 16 different tax measures to compile one score, Keating ranks the states according to their Business Tax Index. Among the factors Keating studied were a state's top personal income tax rate, a state's top individual capital gains tax rate, a state's top corporate income tax rate,  property taxes, and gas taxes.

Wisconsin ranks number 32, near the bottom third of all the states.

Keating writes, “As Elvis Presley said: ‘A little less conversation, a little more action please.’ For example, more action is needed by elected officials in many states to make their state tax systems friendlier towards entrepreneurs and small businesses.”

I concur, having blogged extensively about Wisconsin’s unfreindly business climate that is severely hampering business growth and retention. Our high taxes coupled with one of the lowest per capita income rates in the country are forcing too many residents to leave the state.

Our state faces a revenue shortfall of $652.3 million, and yet some legislators in Madison want to increase taxing and spending even further.

Keating’s new study is yet another wake-up call to the Legislature and the governor to control excessive taxing and spending.

Read Keating’s entire piece.

Also, the nonpartisan Tax Foundation in Washington D.C. has more details on Wisconsin’s tax system and comparison to other states.