Thursday, March 31, 2005

Playing the Tax Rank Game

by Tom Bozzo

The Wisconsin Taxpayers Alliance prefers a relatively narrow measure of state and local tax burden that makes Wisconsin look like a high-tax state, in the top decile of collections as a fraction of personal income. It isn't that they don't have a prima facie case. Insofar as my house is assessed well above the Madison median, I can get ample rise out of some family members and non-local friends merely by quoting the amount of my annual property tax bill.

So it's funny that the Alliance's president, Todd A. Berry, made a compelling case in Sunday's Wisconsin State Journal that Wisconsin is less spectacularly in the third quartile once the totality of taxes, fees, user charges, and other tax-like revenue sources is considered. An accompanying graphic (n/a online) solidified the presentation. That put Berry to a position about mid-article where it looks like we're not that heavily taxed at all, particularly considering the barely mentioned detail that state and local government actually provide some services.


That led to paragraphs of furious backpedaling in which it's asserted without proof that a bunch of government-levied fees and other revenue sources are less tax-like than various other taxes. So taxes and fees that fund highways are taxes by the preferred measure. Various license fees, which one might view as taxes on the licensed activities, and fees such as those that fund higher education are not so tax-like.

The state is, in effect, penalized by Berry for not nickel-and-diming residents enough.

UW tuition remains a comparative bargain, despite rapid recent increases. That's one price you'd think even the state's Republican politicians might be smart enough to keep relatively low if they want to suggest that Wisconsin is a desirable destination for brains, and the associated money, that otherwise could be planning to get pizza at 4 A.M. in Manhattan.* But by Berry's account it's bad that low UW tuition and a low-ish sales tax — as a native Delawarean ("home of tax-free** shopping") I think the sales tax is the most stupid and evil tax, plus it's regressive — require correspondingly higher property and (progressive) income taxes. Uh, we might end up taxing people who can actually afford to pay?

Since what you don't hear is much clamor for reduction in government services, even though some (cough, corrections) seem to be massively over-provided, what Berry really is offering is a love-letter to stealth taxes. Stealth taxes happen to be, perversely, the only revenue sources that are available for tapping in our poisonous political climate.


* Of course, it's possible that low-priced public higher education leads to a net export of brains to the coastal cities.

** Delaware levies sales taxes on automobiles and rentals.
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