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Measuring taxes

Are taxes on Wisconsin citizens as bad as some say?


The answer depends on how taxes should be measured. There are two ways to look   at the question — simply in terms of the level of taxes collected by state   and local governments in Wisconsin. The other, and perhaps fairer way, is to   measure how much Wisconsin citizens pay to all levels of government, both in   fees and taxes.


Under the first approach Wisconsin is seventh in taxes collected by state and   local government. But a different picture emerges when fees and federal taxes   are included in the picture.


Wisconsin has had a tradition of using taxes rather than fees, clearly a heritage   of trying to link government spending to the ability to pay. About 60 percent   of the state’s general fund collected taxes are returned to school districts,   counties and municipal governments. The goal is to provide a measure of equity   in education and government services, regardless of whether you live in a wealthy   or poor part of the state.


Property and local income taxes are potential deductions against the federal   personal income tax. You can’t deduct either state or local government fees   or state and county sales taxes on your federal income calculations.


A few differences


Perhaps the two biggest differences between Wisconsin and many states is the   low car registration fee and high gasoline tax and the low tuition for higher   education in Wisconsin. A high gas tax allows visitors in this tourist state   to help pay for roads. Relatively low tuition is in the Progressive tradition   of allowing all young people to have an opportunity.


If total government revenue is measured, rather than just taxes, Wisconsin’s   ranking changes. On a per person basis, Wisconsin is 17th in total government   revenue, according to a recent Fiscal Bureau paper. Using that measure, Minnesota   is fifth; Illinois, ninth; Ohio, 15th; Indiana, 33rd; and Iowa 36th.


Another way to measure total government revenue impact is to measure it in   terms of per $1,000 of income. Using that measure, Minnesota is third; Illinois,   ninth; Ohio, 10th; Michigan, 15th; Wisconsin, 19th; Indiana, 35th; and Iowa   39th, according to the research paper.


The question of Wisconsin’s tax ranking has drifted back into the news as Republican   legislative leaders push for a two-year freeze on locally collected property   taxes, including both school districts and local governments. If the Republicans   prevail, you are likely to see new and higher fees imposed at the local level.


Some critics would call that being nickled and dimed into poverty.


Matt Pommer is the dean of correspondents covering the state Capitol.

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