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2/28/2009
Huebsch: $2.2B in new taxes
When we set our family budgets, especially in this economy, we tally our spending from last year and list new expenses anticipated in the next year. If together they total more than our annual income, we start to set priorities and consider what we can do without. We put our mortgage or rent, car payments, groceries, and utility and healthcare bills at the top of list, and then we look for ways to cut back other expenses.
So why is this exercise so foreign to state agency officials, Governor Doyle and the Democrats who control the state legislature? Because they know it’s not their hard earned money and they don't concern themselves with the taxpayers struggling to pay the bills. From their perspective, it’s the state’s money.
The state budget they recently proposed for the next two years is case in point. They calculated spending from last year and anticipated expenses for the next year, just like the rest of us. But then they added the cost of new and expanded pet programs to that total. Since it turned out to cost more than the state is expected to take in as our economy struggles, they raised taxes and fees to fill the hole.
They do this despite a law on books requiring state government to budget more like families. State agencies must submit a base budget review report that explains and defends current spending levels. This allows lawmakers and taxpayers to find out where every dollar goes.
In light of the times, it’s clear we need to go a step further and make use of zero based budgeting – a reform long supported by Wisconsin Republicans. Zero based budgeting requires us to build each agency budget from scratch, instead of just accepting the previous year’s spending as the starting point. Doing so would allow taxpayers to identify programs that are obsolete, eliminate waste and facilitate smarter spending of tax dollars.
Governor Doyle and the Democrats don’t want to make the change though. In complete control of state government for the first time in over twenty-five years, they can’t pass up this opportunity for social engineering and doling out checks for pet projects and to political friends. Not only do they oppose zero based budgeting, they’ve decided to abolish the existing law that requires state government to justify its spending.
Denying Wisconsin taxpayers an explanation about how their money is spent requires a stunning level of arrogance. But that’s only the beginning of how far the governor and legislative Democrats will go to duck taxpayer accountability.
Under current law, the governor must notify lawmakers if spending commitments are outpacing tax collections by one half of a percent or more. Using today’s numbers, this means that a shortfall of about $300 million would require notification and introduction of a bill to take corrective action.
Governor Doyle and the Democrats want a trigger that’s four times higher. That means they’ll keep a budget hole secret until it climbs to more than $1 billion dollars. They are taking a page out of the playbook of national Democrats who believe the bigger the crisis, the better the opportunity to sell tax increases.
As President Obama's Chief of Staff Rahm Emanuel recently said "You never want a serious crisis to go to waste!"
As the country struggles through a recession, Democrats in Washington, D.C. and in Wisconsin have made tax increases the centerpiece of their economic development agenda. There’s no rhyme or reason to the choices made by Governor Doyle and Wisconsin Democrats; no economic studies documenting how their chosen tax hikes will create jobs or stimulate consumer spending.
The $2.2 billion of new taxes in their proposed state budget are just a means to an end. They assembled their government wish list and then raised taxes until they could pay the bill. And they found taxes that best lent themselves to political spin: taxing the rich, closing loopholes, leveling the playing field, and according to them, "just being fair". Following is a rundown of the taxes.
Hospital Tax: $925 million
75¢ Cigarette Tax Increase: $334 million
Personal Income Tax Increase: $312 million
Corporate Income Tax Changes: $257 million
Establishing Combined Reporting: $215 million
Increasing Capital Gains Taxes: $181 million
Establishing Streamlined Sales Tax: $82 million
What does all this mean in the real world? It means each of us will send more of our paychecks to Madison if we get sick, buy anything from cigarettes to diapers to bottled tea, download ring tones for our phones or music for our iPods, or shop on-line. It means they believe government should reap the rewards when small business owners sell their companies, rather than the families who spent their lives building them. And it means that they view corporations as a cash cow for government, destroying efforts of businesses to invest in current workers and create new jobs.
I have said a number of times since November that elections have consequences. It’s never been more apparent than now. All of these taxes were proposed, debated and even passed by the Democrat-controlled state Senate in 2007 and 2008, but Assembly Republicans were able to prevent them from becoming law.
The Democrats’ sentiment that more taxes are the answer to all public policy challenges has to change if we are going to turn the economy around and get people back to work. But, it won’t change until Democrats place a higher value on taxpayers than on government programs, and their budget proposal shows that will not happen anytime soon.
Mike Huebsch is a Republican and represents the residents of the 94th Assembly District.
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