WISTAX 'Total Taxes' - A Total Farce
One of the Wisconsin Taxpayers Alliance’s most consistent products is its early-year annual report “Total Wisconsin Taxes.” For years, this document has helped drive a two-part message favorable to the conservative agenda: 1. Taxes keep rising and 2. This per-person “burden” can be measured.
WISTAX formula in this report is simplistic and its conclusions utterly irrelevant to producing an actual snap shot of the taxes paid by individuals in Wisconsin.
Consider that the WISTAX “formula” involves adding up every tax collected from the state of Wisconsin at the federal, state and local level. All corporate and business taxes, all individual taxes, all taxes collected by people inside of Wisconsin whether they are Wisconsin residents or not.
WISTAX then divides this total amount by the number of people in the state of Wisconsin – every woman, man and child and comes up with a number. For instance, in its 2009 report, WISTAX says, “Total taxes averaged $10,875 per person and claimed 28.8 of state personal income.”
These figures are misleading at best and intentionally distorted at most.
The Tax "Burden"
Commenting to a Wisconsin State Journal reporter on its 2009 figures, a WISTAX researcher indicated that although the number it found in 2009 fell from the year prior, 2010’s numbers would most likely rise. Why? Because of what the researcher called tax increases. The most substantial tax increases in the state budget were the increase to the top one percent of income earners and the increase in the cigarette tax. In addition, the state’s earlier budget repair bill closed the Las Vegas Corporate Loophole – hardly a tax increase, as opposed to restoring some sense of sanity to the abused corporate tax system.
How can WISTAX convoluted formula show anything real about the tax burden if its alleged “total tax average per person” can be drastically moved by a tax increase to the those making over $225,000 a year, corporations hiding assets out of state and smokers? As the vast majority of individuals fall into none of these categories, how can WISTAX measure be an accurate measure of anything if it, as it says, expects the “average” to go up due to those tax changes?
Likewise, on its calculation of personal income and this as a reflection against its dubious “average taxes” figure: Wisconsin is a lower per capita income state, so it compounds WISTAX suspect rationale to compare an already-misleading number to the personal income number WISTAX divides this against to calculate its tax rate against state personal income.
Finally, in the Wisconsin State Journal item, the WISTAX spokesperson indicated the average per person tax number could also rise as unemployment rose.
This statement warrants two observations. First, is that this shows an additional reason that the figures from WISTAX have little use. How can a number that purports an average tax paid be of any use if it can be so manipulated through people losing their jobs? Job loss is something that has little to do with average tax burden, so if an individual loses his or her job, why is that an indicator of a separate individual’s taxes paid reflected by their personal income?
Second, after the economic collapse due to the failed policies of the Bush administration, many of which were advocated by the U.S. Chamber of Commerce and the Wisconsin Taxpayers Alliance (15 of the last 33 board members of WISTAX are also affiliated with WMC), the unemployment rate in Wisconsin had actually fallen for six straight months. Why is WISTAX assuming this will suddenly cease throughout 2010? Conservatives have loudly criticized the Recovery Act and figures showing jobs created, protected and funded through the Recovery Act and claimed it is not worth the public investment, calling instead for even more corporate and regressive tax policies. Are WISTAX comments wishful conservative thinking?
WISTAX head Todd Berry previously was characterized by the media as saying that the Recovery Act “would have worked more quickly if it had put even more money directly into consumers' hands through bigger tax cuts and checks to the unemployed and Social Security recipients… .” As a closing note, WISTAX Watch could not find Berry calling for, nor producing, evidence that corporate tax breaks had created actual jobs in the state of Wisconsin. [Wisconsin State Journal, 10/17/09]
If the WISTAX "Total Taxes" formula isn't flawed, then why is it that all taxes on corporations are included in the formula, but corporate revenues are not?
