MILWAUKEE (AP) – Wisconsin was No. 34 in a new state-by-state ranking of business tax burdens, and the researcher who did the study said the amount paid into the state’s unemployment insurance compensation fund helped push it into a relatively high spot.
The list, created by the Michigan-based consulting group Anderson Economic Group LLC, goes from lightest tax burden to heaviest. Wisconsin has long been criticized as a tax-heavy state unfriendly to businesses.
In the Midwest, only Michigan fared worse at No. 43, the Milwaukee Journal Sentinel reported. Iowa ranked No. 12. Illinois, Minnesota, Indiana and Ohio were ranked 20, 23, 28 and 32 respectively.
Alaska was ranked highest, due in large part to its oil-extraction tax.
The rankings were determined by looking at average state and local taxes paid by private businesses as a share of the collective pre-tax operating profits in each state’s private sector. That established “one measure of a business’ ‘ability to pay’” its taxes, the report said.
The report used 2011 data. It looked only at taxes paid by businesses and did not include others, such as general income or sales tax, said Jason Horwitz, the economist who carried out the research.
Horwitz said Wisconsin’s tax burden is generally comparable to other states, but the amount paid for unemployment insurance pushed into a higher rank. He said that could change as employment improves.
The report showed great variation in business taxes. The five lowest-ranked states collected less than 8 percent of businesses’ operating margin, while the top five collected more than 14 percent, Anderson said.
Information from: Milwaukee Journal Sentinel, http://www.jsonline.com