When it comes to Wisconsin's systems of taxation, we should just start over.
Exempting ourselves to death
By
Dave Zweifel
Gary Bahr of Belleville should have been elected to the state Assembly when he ran for the western Dane County seat back in 1994.
The retired small-town banker is one of the few who has consistently challenged our legislators to think outside the box about taxes. He rightfully insists that the state should completely scrap its present tax system and start over with one that makes sure everyone except the very poor pays a fair share of taxes.
Instead, state government keeps the same broken system in place, tinkering on the edges every budget year and in these hard economic times unconscionably pushing a bigger burden down to the local level, where the regressive property tax is already chasing people out of their homes. In the end, everything stays the same, even the deficits. And now comes the news that legislators have cut back on reimbursing local governments for the services they provide state buildings — a move that puts another $4 million on the backs of Madison property taxpayers alone.
For two decades now, Bahr has been urging the Legislature to take our public schools and county governments off the property tax. Taxes on property ought to be used strictly for municipal services like police, fire and garbage pickup. And everyone who benefits from the services, including churches and nonprofits, would pay property taxes, which he estimates would be about 85 percent less than they are now.
By taking the schools off the property tax, the state would need to finance 100 percent of school costs. This, and state aids to county government, could be done, he points out, by eliminating the hundreds of exemptions that now exist under the state’s 5 percent sales tax and the current exemptions in the income tax codes. Bahr cites figures estimating that currently Wisconsin exempts 35 percent of real estate, 50 percent of income and 50 percent of purchases.
Plus, since pulling schools off the property tax would eliminate the need for the state’s complicated equalization formula that supposedly balances property “rich” and “poor” districts, the state could determine a set amount that would go to the schools for each student. That would be more fair and would remove the guesswork local school boards endure while waiting for the state budget and equalization rate to be determined.
And he doesn’t buy the argument made by some that if the state pays 100 percent of school budgets it would erode local control. Local control can still be mandated by state law, as happened when the state increased the 50 percent reimbursement formula to 66 percent a few years back.
In an e-mail a few days ago, Bahr commented, “The biggest crime in Wisconsin is the property tax. Incomes, home and farm values are down, unemployment and bankruptcies are up, homes and farms have to be sold, yet property tax is increasing. Something is wrong!”
Indeed it is, but it will take a Legislature that is at least willing to run the figures and take a look at a different system.
As Bahr said in a conversation I had with him several years ago: “A legislator exempt from income tax on his per diem pay, AT&T exemptions, real estate exempted from taxes, TIF districts, luxury boxes at Miller Park exempted from sales taxes — all of it costs the rest of us taxes.”
And, unfortunately, too much of it is paid by the property taxpayer.
This article orginally appeared on the Captial Times op-ed page.
January 7, 2010
post a letter about this article »
read letters on this article (4)
Dave Zweifel is editor emeritus of the Capital Times and a FightingBob.com contributing editor.
