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December 6, 2006

Tax Climate Notes & Links

The arrival of local property tax bills signal the onset of tax season. Accordingly, there has been a number of recent articles on Wisconsin's tax climate:

  • Barbara Miner: More than 16,000 private properties in Wisconsin pay no property taxes. As a result, everyone else pays more. Why?
    In Milwaukee, for instance, almost 20 percent of the city’s non-governmental property value is exempt from taxes, a big jump from almost 10 percent six years ago. Add in government-owned property such as public schools, fire stations and parks, and the exempt total is more than 33 percent. Figures are similar for many other cities and suburbs in the area.

    Todd Berry has been president of the Wisconsin Taxpayers Alliance since 1994. Berry’s group has done many studies of Wisconsin’s taxes but has never looked at the impact of nonprofit tax exemptions.

    As Berry sheepishly admits, his group is itself exempt and doesn’t pay property taxes on the building it owns in Madison, valued at about $500,000 on its federal tax return. Thus, a group that often does studies exposing high taxes helps add to the tax level for others with its own exemption.

  • Institute for Wisconsin's Future:
    Contrary to the claims of corporate lobbyists that the state has unreasonably high business taxes, Wisconsin is already a low-tax state for large firms.

    And this means the corporate sector is not making a fair contribution to the cost of maintaining public structures of state and local government, from schools to roads to public safety to the environment.

    To back up these statements, the Institute for Wisconsin's Future released a mass of data on December 4, 2006, detailing that more than thirty states have higher taxes on corporations and that over 60% of the biggest companies operating in the state paid zero corporate income tax in 2003.

  • Wistax:
    After a drop of 0.5% in December 2005, school taxes this year will rise 5.4% to $3.79 billion. The increase is less than in 2003-04 (7.2%) but over the 1990-2005 median (4.9%) Increased property values helped drop the average tax rate from $8.62 per $1,000 to $8.31. Growth in another state tax credit will help offset the school tax hike.
Inevitably, tax favors are available for certain folks and are often inserted into bills late in the process. The Miller Park exemption is classic:
Restaurants pay taxes but not Friday’s Front Row Sports Grill at Miller Park because everything inside the stadium grounds is exempt.

The exemption for Friday’s particularly galls city officials, not only because another property leaves the tax rolls but because they see it as unfair to other competitors. While the Miller Park restaurant is tax-free, the TGIFriday’s in Greenfield pays property taxes of about $45,000.

Last fall, both Russ Feingold and Herb Kohl voted for a massive, one year large corporate tax giveaway: a 5% tax rate on offshore earnings. What a mess.

Posted by Jim Zellmer at December 6, 2006 8:04 PM
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