Over the last 10 years, the city of Madison has been subjected to a costly 2009 state law and hit with a string of unfavorable court rulings that together have effectively removed millions of dollars’ worth of property value from city tax rolls.
Meanwhile, it seems Mayor Paul Soglin and the Madison School District can’t go a week without complaining about how Republican Gov. Scott Walker and the Republican-controlled Legislature won’t give them the state tax dollars they need or let them raise local property taxes enough to cover their bills.
So what do a pair of Democratic state lawmakers from Madison do? Well, propose to make yet another piece of Madison property exempt from property taxes, of course.
It’s not like Sen. Fred Risser and Rep. Chris Taylor’s bill to make the Bartell Theatre tax-exempt is a huge deal. The theater at 113 E. Mifflin St. only paid about $13,000 in taxes in 2012.
But it’s counterproductive at best given the context of tight city budgets and the whittling away of taxable property value in a city already steeped in tax-exempt properties owned by state government, UW-Madison and nonprofit agencies.
“It’s inappropriate,” said Soglin, who said the lawmakers didn’t talk to him about the bill. “If anything, the state should be working with us to close the loopholes.”
Mr Munger observes that America’s blockheaded debt-ceiling debate flows in part from a bipartisan commitment to the medieval theology of our tax code:
The Republicans in Congress are prepared to sacrifice our immortal debt rating to the proposition that not one penny increase is possible, even though almost no one actually pays those rates.
The Democrats in Congress like high rates, so that they can sell indulgences.
Republicans depend on selling indulgences, too, Mr Munger is keen to stress. Bowles-Simpson recommended closing some of the tax code’s most egregious loopholes. But the political incentives led President Obama to refuse the chance to go after tax expenditures; he has mostly pushed for higher rates. This is all incredibly depressing. You know we’re in trouble when Mr Munger, one of our sharpest scholars of political economy, is unable to offer useful advice beyond calling for a reformation, “a Martin Luther to speak out and tell the truth”.