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12/9/2008
So Doyle should get serious about raising taxes?
Well, why would anyone be surprised? The left-leaning (well... being kind) Cap Times does a piece about addressing the ‘budget shortfall’ of $5.4 billion. (That $5.4 billion number is way overstated. It's Doyle's trash-talk number meant to be the opening foray for tax increases. The shortfall is NOT $5.4 billion.)
No one has ever accused Doyle of being a whiz when it comes to economics. [??!!?] But he has to recognize that even “everything’s on the table” spending cuts will not be enough to bridge the budget gap.
Yet the governor continues to suggest that it might be possible to balance the budget without tax hikes.
“I think the real challenge now is to first see where do you really go to the point you can’t go any further with the cuts,” says Doyle.
Uh, no. Oh my. And the editorial goes on to say Wisconsin needs a “fair tax system…” You know what that means. Definitely it means more taxes. Tax the “rich” and tax businesses more. If you care to, you can read their supposed solutions yourself.
I was one of a roomful of Heart of the Valley Chamber members gathered to hear Todd Berry, President of the Wisconsin Taxpayers Alliance, last Friday. He gave us a comprehensive picture of how the U.S. and how Wisconsin got in the morasses we’re in, trying to wake us up with the seriousness of the debt and deficit picture of both governments. Spending more than the country and the state can afford is no longer a “political issue,” but “It’s a moral issue.” Indeed.
Berry showed us slide after slide, piecing together how we got into this mess.
First and foremost, Wisconsin’s heavily manufacturing-centered economy is cyclical. It’s a very simple, and very long-standing fact of life - government tax revenues swing substantially through the cycle – and we’ve got to do a better job dealing with that.
It’s just what you should do if you’re a cyclical earner – a realtor, for example. Or a homebuilder. Or a car salesman. You put money aside, create a Rainy Day Fund in the good times – lots of money, depending on your industry – so you have it to rely on in the lean times.
Well, in many of our households, we spend it when we have it and rack up huge credit problems when we don’t. As Berry said, the state “never cleaned up our act after the [last] downturn.” He demonstrated the contents of the Bag of Tricks – you know them: Accounting tricks, ‘making money’ via fund transfers (Can you say “Transportation Fund” of “Patient Compensation Fund?”) and refinancing (Can you say “Tobacco Settlement?”), more and more borrowing, refusing to use GAAP budget accounting and a continuing refusal to fund that Rainy Day fund.
Berry emphasized the true size of the deficit – it’s not even close to the $5.4 billion touted by the governor. That number assumes approval of almost $3 billion in new spending, unlikely, Berry says, given the slowing economy. It also assumes the state will do nothing to address the deficits, and will continue to carry them over, adding to them from year to year to year.
Long story short, depending on how you look at it, the real deficit is more in the $1B range – and still very, very serious. Berry’s suggested options to solve the problem are good, common sense – often anathema to career politicians. More on those solutions tomorrow.
Jo Egelhoff, FoxPolitics.net
COMMENTS
That's a nice graphic on the comment. And you've used it more than once.
How about this: See that ball and chain graphic as the tax code that keeps people down due to the taxes that go unpaid by corporations all the time.
How about collecting the back taxes owed on the increasing numbers of abandoned properties?
There is a precedent for this. I do not have the direct quote at hand but in California the state revoked 57,000 corporate charters on the basis of taxes owed. This means that
those corporations which failed to pay their fair share were eliminated.
Source: "Gangs Of America" (2003) by Ted Nace.
Then change the tax code to a progressive land-based rather than property based tax system such as Minnesota has. This means that the land rather than the property is taxed. Properties which have had an unimproved valuation for decades would not be permitted to allow abandoned properties to lie dormant and pay the 'holding cost' only at time of sale.
The tax bill will come due each year and every year. This would force the sale of properties rather than 'saving' revenue or make the improvements needed to make the property attractive to renters and tenants of various sorts.
This is not pie in the sky. It just takes public interest in making new rules. The priority would be putting the horse back in front of the cart and everyone including specially favored
corporate interests and tax dodgers to pull their fair share of the load.
Lon Ponschock (Tue Dec 09 12:48:29 2008)
Here is a citation which contains a correction to the previous comment. The citation comes from Gangs Of America by Ted Nace, page 205:
"As described in chapter 5 (of "Gangs Of America") charter revocation was not uncommon in nineteenth- century America. It remains a legal option in every state, and it is quite common for smaller corporations to be suspended by state authorities for failure to comply
with basic regulatory requirements. For example in fiscal year 2001 - 02 the state of California suspended the charters of fifty-eight thousand corporations for failure to pay
taxes or file proper statements. Once suspended, a California corporation may no longer do business or have access to the courts. It is effectively terminated."
Lon Ponschock (Wed Dec 10 09:55:55 2008)
Lon,do your statements negate the lack of budgeting by the State of Wisconsin, and what do the realities of Californian Corporate shortfalls have to do with Wisconsin, or do we paint with the biggest brush we can find to hide the real argument, the utter lack of fiscal responsibility by Wisconsin government, yeah throw Tommy in there.
None of that matters any longer, what are we going to do now to rectify the States paucity of reality based accounting? As a citizen who watches the cost of government rise without any visable attempt to mind spending except empty rhetoric, I demand that leadership pick up the reins and begin to direct the wagon around the huge ruts and potholes or will they remain reticent to act and break the axle that carries the load, the loyal citizens, the producers in the state?
The silence is deafening from Madison when the subject to impose GAAP accounting. Is that too much to ask for-just an attempt to deal with the reality we live in?
Richard Parins (Wed Dec 10 16:29:52 2008)
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