Kira Sparks has an update on the proposed TABOR legislation.
Category: Taxes
The Coming Tax Increase
For more than a year, I have been predicting?not advocating, just predicting?a significant tax increase to deal with the budget deficit. My hypothesis has been that sooner or later financial markets would put pressure on Congress to act on the budget deficit, and that the magnitude of the problem would be too great to deal with on the spending side alone.
I was unsure where, when or how this financial market pressure would arise. But it now seems clear that it will come through the foreign exchange market. The dollar has been dropping rapidly and this is setting in motion forces that eventually will impact on domestic stock and bond markets. The possibility of a major crash cannot be ignored.
The root of the problem is the U.S. current account deficit, which includes the trade balance for goods and services, plus receipts on U.S. investments broad minus payments to foreigners on their investments here. There is also a large negative figure for unilateral transfers abroad, such as those for military programs and foreign aid.
Property Tax Bills: Reading the Tea Leaves?
Perhaps my mind fails me, but in years past, I recall receiving a pleasant marketing letter from the Mayor extolling the hard work that went into limiting the annual increases in our property tax bills. This year, I found only the bill. I’ve emailed the Mayor’s office asking for comments on this.
Perhaps, given the size of this year’s increases, they did not want to be that closely identified with the tax bills? (OTOH, eliminating the letter does save a few dollars).
Schools, Quality of Life, Jobs, Economic Growth and Globalization
Yesterday’s property tax bill (including not small increases in local and school taxes) along with recent articles on the China Price and Milwaukee’s loss of unskilled labor jobs serve to remind Wisconsin residents of the real issues facing our state:
- Encouraging the formation of more new businesses. I don’t believe the formation of yet another quasi-government organization is the answer. Rather, let’s simplify (and reduce) the paperwork that any organization must support to operate in Wisconsin.
- Broadband: Wisconsin is stuck with SBC, a telco that has done nothing to offer true, 2 way broadband (100X the speed of today’s rather slow DSL/cable services) to Wisconsin residents. I have not seen any indication that our state’s political leadership has boarded the cluetrain on this one.
- Biotech certainly has great promise for Wisconsin, however, historically the benefits have generally gone to out of state firms. Perhaps this will change somewhat over time.
Without a strong, growing tax base, we’ll continue to see substantial increases in local property taxes. I don’t believe this is a sustainable strategy.
State School Tax Levies rise 7.3%
I noticed a number of “property tax” searches in my logs today. I imagine it has something to do with the increases we’re all seeing this year. Alan Borsuk reviews the data, and provides a useful chart on school spending around the state. It’s interesting to see Madison’s total tax receipts compared to other areas.
Wisconsin Banks & Tax Shelters
The Wisconsin Department of Revenue continues to pursue local banks that have setup subsidiaries in Nevada to avoid Wisconsin’s 7.9% state corporate tax rate. More power to the DOR, but the $26M in settlements seems rather small. I wonder if this is done for effect? Paul Gores has more.
Another Approach to Local Taxes
Ken Thomas discusses Beaver Dam’s plans to reduce spending by 1% and keep net property taxes flat (a reduction in mill rates is balanced by the usual increased property valuation.
Hubris
Josh Marshall on the congressional republican’s hubris:
This weekend Congress was working on a massive $388 billion omnibus spending bill that will cover all manner of federal spending. But at the request of Rep. Ernest Istook of Oklahoma, chairman of the House Appropriations Transportation Subcommittee, a special provision was inserted into the bill which allows the Chairmen of the House and Senate Appropriations Committees or their “agents” to review any American’s tax return with no restrictions whatsoever.
Tax by the Mile
Robert Salladay on the California DMV’s plans to replace the gas tax with a mileage tax based on miles driven:
Gov. Arnold Schwarzenegger on Monday appointed a new Department of Motor Vehicles director who has advocated taxing motorists for every mile they drive ? by placing tracking devices in their cars.
The idea would mean a significant overhaul of how California collects taxes to maintain its often-crumbling roads. Under the plan, the state gas tax ? now 18 cents a gallon ? would be replaced with a tax on every mile traveled by each car and truck.
Interesting privacy issues here…
Marquette Symposium on Wisconsin Tax Policy
Taxprof summarizes the Marquette Law Review’s symposium on Wisconsin Tax Policy.