Accurate tax facts: Wisconsin is middle-of-the-pack

Once again, elected officials have pounced on a report by the Tax Foundation to mislead taxpayers into thinking that Wisconsin can’t afford to adequately fund its public institutions.

The latest cases are Rep. Steve Nass (R-Whitewater) and Sen. Mary Lazich (R-New Berlin), who separately cited a new study by the Washington, D.C.-based Tax Foundation, claiming Wisconsin is among the top ten states in tax effort. Not so! Indeed, the latest U.S. Census Bureau data show that taxes and fees for state and local government are 3% lower in Wisconsin than the national average. The national average is $5,803 per person; Wisconsin’s figure is $5,607.The truth is that when it comes to how much revenue we collect for state and local services and infrastructures, Wisconsin ranks 21st among the states.

The Tax Foundation’s fatal flaw (though there are others) is that it measures taxes and ignores fees and other charges. Wisconsin is a low-fee state [34th highest in the US, says the Census Bureau] and so we pay more through taxes. The lack of toll roads in Wisconsin is one example among many of our relatively low fees.

We must look at taxes and fees combined. The latest Census Bureau figures, from 2006, show Wisconsin as 21st highest among states (as a percent of income) and 23rd (measured per capita). The truth is, Wisconsin is middle-of-the-pack when it comes to taxes and fees, and that’s the measurement that makes sense.

As we move toward elections and the 2009-‘11 state budget process, many crucial decisions lie ahead that will impact us for years to come. One of the most important is how much to invest in the public structures that are the basis for economic prosperity—roads, schools, public safety, transportation, community development and more.

By misusing the facts, Nass and Lazich would have us believe that properly funded public institutions are beyond our reach. They’re wrong. It would be a shame if important policy debates were premised on this kind of shoddy claim, so we take this opportunity to clear the air.

The Institute for Wisconsin’s Future is a non-profit research and public education organization working for a fair and adequate tax system. Details at: www.wisconsinsfuture.org.