By Jerry Deschane
Gov. Scott Walker’s administration is on the right track in the search for a tax to eliminate.
Wisconsin needs an economic game-changer if we hope to be competitive with states that have such natural advantages as warm weather, seaports or petroleum. Unfortunately, beer is not a natural advantage.
Being the state with the Midwestern work ethic and no income tax could help Wisconsin reverse our demographic path to senior status.
Wisconsin’s population makeup is not a recipe for economic success. Although politicians don’t like to talk about it, one of the significant reasons Wisconsin is in economic slumber is because our population is getting older, not younger.
The mix of workers and retirees slowly but surely is tilting toward retirees. Within 20 years, most Wisconsin counties will have more than one-fifth of their population past retirement age.
At the same time, Wisconsin is a high-tax state. We have lots of government, lots of government benefits, an awesome public school system and a really great public road system.
We’ve paid a lot for those schools and roads, and we will continue to pay a lot for them. The challenge will be keeping our economy performing at a high level to generate the needed taxes.
A high-performing economy in a cold weather state needs an edge.
The idea of eliminating the income tax — or the property tax, which is the one I hate most — will have lots of economic appeal. It will get the attention of people who invest money and start businesses.
And investors are the ones who for decades assumed that the green blob north of Chicago is a hat or something.
The challenge will be figuring out how to run government without the tax. The income and property taxes make up more than two-thirds of Wisconsin’s total tax pie.
You can’t replace that much money by eliminating fraud, waste and abuse and by placing a sales tax on fingernail salons. Are we willing to pay a couple cents more in sales taxes and pay sales taxes on things that are currently exempt?
Before you say yes, builders, realize that one of the biggest tax-exempt services out there is construction labor. Do you win or lose if you no longer have to pay state income taxes but instead have to charge a 7.5 percent sales tax on your next bid? Will that bring you more business or less?
I don’t know of any successful business that made it without taking a risk. The state is no different.
We can continue to muddle along with an aging population, lots of taxes and an economy that is both as assuring and as exciting as oatmeal. Or we can take a chance, make a significant change and see what happens.
Jerry Deschane is president and owner of Stoughton-based Deschane Communications LLC, a lobbying, consulting and communications firm specializing in the construction industry.