The estate tax has been watered down to the point where only a few hundred Wisconsin estates paid the tax each year, according to a new report from Citizens for Tax Justice. President Obama has proposed making the estate tax rules that were in effect in 2009 permanent starting in 2013. If his proposal is passed into law, estates of individuals worth up to $3.5 million (effectively $7 million for a couple) would not pay any estate taxes, and the number of wealthy Wisconsin estates paying the tax would remain tiny.
The estate tax has been gradually phased out over the last decade, to the point which just 290 Wisconsin estates owed the tax in 2009, or about 1 out of every 167 estates. That’s down considerably from 2000, when 803 Wisconsin estates paid the tax, or 1 out of every 59 estates. In 2013 the tax is slated to return to its 2001 levels, with exemptions of $2 million per couple. Congress is unlikely to let that happen, and Obama has already started to propose alternatives.
Tuesday, November 29, 2011
Monday, November 28, 2011
Made in Wisconsin: Wisconsinites
Wisconsin a national leader in the “stickiness” of the state population
A new analysis of “home-grown” populations by Governing.com finds that Wisconsin has one of the highest percentages among all states of residents who were born within the state – a characteristic sometimes referred to as the “stickiness” of the state population. About 74 percent of all Wisconsinites (and 68.4 percent of those age 25 and older) were born in the state – compared to a national average of 59 percent. According to their analysis of Census Bureau data, only Louisiana, Michigan, Ohio and Pennsylvania have higher percentages of residents who are home grown.
Governing looked at the data from large and medium cities as well as the state-level figures. Among the nine Wisconsin communities included in the analysis, Oshkosh had the largest percentage of adults age 25 and older who are Wisconsin-born, at 74% (followed by Waukesha at 71.2%). In fact, Oshkosh was 10th highest nationally in that regard (among communities large enough to be part of the analysis). To my surprise, Kenosha was lowest among the nine Wisconsin areas that were analyzed, having just 48.7% of residents 25 and older who are Wisconsin-born. I suspect that can be explained by the fact that it is so close to the state border. Madison is close behind at 49.1%, which isn’t surprising given the mobility of UW students, grads and faculty.
The interactivemap developed by Governing to show the degree of mobility is a very interesting resource. (The data it uses comes from the Census Bureau’s American Community Survey. See the Census Bureau's press release for more information about the mobility study.)
Jon Peacock
A new analysis of “home-grown” populations by Governing.com finds that Wisconsin has one of the highest percentages among all states of residents who were born within the state – a characteristic sometimes referred to as the “stickiness” of the state population. About 74 percent of all Wisconsinites (and 68.4 percent of those age 25 and older) were born in the state – compared to a national average of 59 percent. According to their analysis of Census Bureau data, only Louisiana, Michigan, Ohio and Pennsylvania have higher percentages of residents who are home grown.
Governing looked at the data from large and medium cities as well as the state-level figures. Among the nine Wisconsin communities included in the analysis, Oshkosh had the largest percentage of adults age 25 and older who are Wisconsin-born, at 74% (followed by Waukesha at 71.2%). In fact, Oshkosh was 10th highest nationally in that regard (among communities large enough to be part of the analysis). To my surprise, Kenosha was lowest among the nine Wisconsin areas that were analyzed, having just 48.7% of residents 25 and older who are Wisconsin-born. I suspect that can be explained by the fact that it is so close to the state border. Madison is close behind at 49.1%, which isn’t surprising given the mobility of UW students, grads and faculty.
The interactivemap developed by Governing to show the degree of mobility is a very interesting resource. (The data it uses comes from the Census Bureau’s American Community Survey. See the Census Bureau's press release for more information about the mobility study.)
Jon Peacock
Wednesday, November 23, 2011
Giving Thanks for Effective Anti-Poverty Programs
When we give thanks on Thursday, let’s remember that there are many public programs providing critically important assistance to people who aren’t as fortunate. Among those important government programs are a number that are succeeding in lifting low-wage Americans and unemployed workers out of poverty. Unfortunately, some of those programs are under assault.
In two WCCF blog posts yesterday, we examined: 1) the new Supplemental Poverty Measure developed by the Census Bureau, and 2) a special analysis using that measure, which was done for the New York Times to examine the role of various government programs in helping lift millions of Americans out of poverty. That analysis, which the Times reported on over the weekend, found that a surprisingly large number of Americans – 51 million according to the Supplemental Poverty measure – are in a category called the "near poor" between 100 and 150 percent of the poverty line. The special analysis found that nearly 20 percent of the people in that group were kept above the poverty line by government programs that supplement income.
In two WCCF blog posts yesterday, we examined: 1) the new Supplemental Poverty Measure developed by the Census Bureau, and 2) a special analysis using that measure, which was done for the New York Times to examine the role of various government programs in helping lift millions of Americans out of poverty. That analysis, which the Times reported on over the weekend, found that a surprisingly large number of Americans – 51 million according to the Supplemental Poverty measure – are in a category called the "near poor" between 100 and 150 percent of the poverty line. The special analysis found that nearly 20 percent of the people in that group were kept above the poverty line by government programs that supplement income.
Monday, November 21, 2011
State revenue collections holding up -- so far
I’m a pessimist by nature, and my pessimism often surfaces when I think about Wisconsin’s fiscal situation. For months now I’ve been worried that the downward trend in the economic estimates made by national forecasters was going to result in a downward revision to the state revenue estimates made in May for the 2011-13 biennium. The last quarterly economic report from the Department of Revenue (DOR) reinforced my fears because it called for slower growth than the report that preceded the biennial revenue projections.
Fortunately, the latest revenue collection figures released last Thursday by the Department of Revenue (DOR) suggest that my fears might be unfounded – or at least premature. The new figures from DOR show that tax collections over the first four months of the current fiscal year (July through October) were up 3.7 percent -- compared to the same period in 2010. For the full year, the May projections forecast that General Fund tax collections would grow by 3.0 percent. I'm very encouraged that tax revenue growth for the first four months is a bit above the anticipated growth rate.
On the other hand, my pessimistic leanings compel me to note that tax collections in October were virtually unchanged from October 2010. If that’s the beginning of a trend, Wisconsin could fall well short of revenue projections for the fiscal year and the full biennium (but even a pessimist should try to avoid reading trends into just a month or two of data).
Jon Peacock
Fortunately, the latest revenue collection figures released last Thursday by the Department of Revenue (DOR) suggest that my fears might be unfounded – or at least premature. The new figures from DOR show that tax collections over the first four months of the current fiscal year (July through October) were up 3.7 percent -- compared to the same period in 2010. For the full year, the May projections forecast that General Fund tax collections would grow by 3.0 percent. I'm very encouraged that tax revenue growth for the first four months is a bit above the anticipated growth rate.
On the other hand, my pessimistic leanings compel me to note that tax collections in October were virtually unchanged from October 2010. If that’s the beginning of a trend, Wisconsin could fall well short of revenue projections for the fiscal year and the full biennium (but even a pessimist should try to avoid reading trends into just a month or two of data).
Jon Peacock
Saturday, November 19, 2011
House Unable to Pass Constitutional Requirement for a Balanced Budget
Rep. Kind votes for the amendment, and Rep. Ryan votes against it!
The U.S. House of Representatives voted Friday on a constitutional amendment requiring a balanced federal budget, but came up 23 votes short of the two-thirds majority needed to approve it. The vote was 261-165, with just four Republicans voting no, and only 25 Democrats voting for it.
In light of concerns about the growing federal deficit, the balanced budget amendment (BBA) polls well, but Democrats fought the amendment because it would impair the ability of safety net programs to grow during an economic downturn, when the need is the greatest and when cuts would be devastating for the economy. A Nov. 15 report by the Center on Budget and Policy Priorities provides an analysis of the severe cuts that would have to be made in key programs like Social Security, Medicare, Medicaid and other important government services.
The U.S. House of Representatives voted Friday on a constitutional amendment requiring a balanced federal budget, but came up 23 votes short of the two-thirds majority needed to approve it. The vote was 261-165, with just four Republicans voting no, and only 25 Democrats voting for it.
In light of concerns about the growing federal deficit, the balanced budget amendment (BBA) polls well, but Democrats fought the amendment because it would impair the ability of safety net programs to grow during an economic downturn, when the need is the greatest and when cuts would be devastating for the economy. A Nov. 15 report by the Center on Budget and Policy Priorities provides an analysis of the severe cuts that would have to be made in key programs like Social Security, Medicare, Medicaid and other important government services.
Friday, November 18, 2011
Share of Wisconsin Paychecks Devoted to Taxes is Shrinking
Wisconsinites are paying a smaller share of their income in state and local taxes than at any other time in the last 15 years, according to Wisconsin Budget Project analysis of new figures from the U.S. Census Bureau figures.
The share of their income that Wisconsin residents pay in various state and local taxes has dropped by 15 percent over the last 15 years. In 1994, Wisconsinites paid an average of $13.22 in state and local taxes out of every $100 they earned. In 2009, the most recent year for which figures are available, that figure dropped to $11.21, as shown in Fig. 1. (Those who are getting this blog post via email may have to adjust your email program's settings in order to see images.)
The share of their income that Wisconsin residents pay in various state and local taxes has dropped by 15 percent over the last 15 years. In 1994, Wisconsinites paid an average of $13.22 in state and local taxes out of every $100 they earned. In 2009, the most recent year for which figures are available, that figure dropped to $11.21, as shown in Fig. 1. (Those who are getting this blog post via email may have to adjust your email program's settings in order to see images.)
Wednesday, November 16, 2011
Grim Days for Schools, with Grimmer Days Ahead
Severe budget cuts to public education in Wisconsin have resulted in thousands of job losses, larger class sizes, and fewer academic opportunities for students, according to a new survey. Many districts used the last of one-time federal money to fill this year’s budget holes, and anticipate that the cuts in the next school year will be the same or deeper than the cuts made this year. That means that the bleak condition of public education in Wisconsin is likely to stay the same or worsen next year.
In the 2011-13 budget, the Legislature made enormous cuts to the state’s public K-12 education system. According to the Center for Budget and Policy Priorities, Wisconsin’s cuts to education were the second-largest in the country when measured on a dollars per student basis. Wisconsin schools will receive $635 less per student in state support in 2012 than in 2011.
The figures for reductions in state support are massive, but do not fully represent the revenue lost to schools. The budget also reduces each school’s per-pupil revenue limit by 5.5 percent in 2012. The result: More than half of districts will need to reduce the amount of money they raise through the property tax in order to stay under the lower limits, a University of Wisconsin professor has calculated. New levy figures indicate that property tax levies adopted by school districts in Wisconsin declined by $47 million, or one percent.
In the 2011-13 budget, the Legislature made enormous cuts to the state’s public K-12 education system. According to the Center for Budget and Policy Priorities, Wisconsin’s cuts to education were the second-largest in the country when measured on a dollars per student basis. Wisconsin schools will receive $635 less per student in state support in 2012 than in 2011.
The figures for reductions in state support are massive, but do not fully represent the revenue lost to schools. The budget also reduces each school’s per-pupil revenue limit by 5.5 percent in 2012. The result: More than half of districts will need to reduce the amount of money they raise through the property tax in order to stay under the lower limits, a University of Wisconsin professor has calculated. New levy figures indicate that property tax levies adopted by school districts in Wisconsin declined by $47 million, or one percent.
Friday, November 11, 2011
Amazon Endorses Application of the Sales Tax to Online Commerce
11-11-11 – No, that isn’t a new alternative to Herman Cain’s tax plan (at least not that I know of); it’s merely today’s date. But in addition to being Veterans Day, today seems to be a good time to note that the tide continues to be turning slowly in favor of applying sales taxes directly to online sales. The latest evidence of that tidal shift came Wednesday, when Amazon announced its support for a new bill that would allow states to require online and catalog retailers to collect sales taxes from their customers.
Until recently, Amazon vigorously fought efforts to tax online sales. Its position began to soften a bit after a heated battle with California over a law there that endeavors to force online sales tax collection. In early August, Amazon came out in favor of a bill introduced in Congress by Democrats authorizing states to collect taxes on online sales. And on Wednesday it endorsed similar legislation, called the Marketplace Fairness Act, which has bipartisan support. That bill was introduced this week by Senators Lamar Alexander (R-Tenn.), Dick Durbin (D-Ill.) and Mike Enzi (R-Wyo.).
The National Conference of State Legislatures, which supports the legislation, says the tax loophole for out-of-state sales in general is costing states $23.3 billion this year. A University of Tennessee study estimated state and local governments miss out on $11.3 billion in tax revenue from internet commerce alone. That would be very welcome relief for states struggling with severe budget challenges.
Read more in a Nov. 10 article by Governing.com.
Jon Peacock
Until recently, Amazon vigorously fought efforts to tax online sales. Its position began to soften a bit after a heated battle with California over a law there that endeavors to force online sales tax collection. In early August, Amazon came out in favor of a bill introduced in Congress by Democrats authorizing states to collect taxes on online sales. And on Wednesday it endorsed similar legislation, called the Marketplace Fairness Act, which has bipartisan support. That bill was introduced this week by Senators Lamar Alexander (R-Tenn.), Dick Durbin (D-Ill.) and Mike Enzi (R-Wyo.).
The National Conference of State Legislatures, which supports the legislation, says the tax loophole for out-of-state sales in general is costing states $23.3 billion this year. A University of Tennessee study estimated state and local governments miss out on $11.3 billion in tax revenue from internet commerce alone. That would be very welcome relief for states struggling with severe budget challenges.
Read more in a Nov. 10 article by Governing.com.
Jon Peacock
Wednesday, November 9, 2011
Sales Tax: Death By a Thousand Cuts?
The new Legislature has approved or proposed a variety of sales tax exemptions. The exemptions give favored tax status to certain purchases, result in similar goods being treated differently for tax purposes, and add complexity to a sales tax system already rife with exemptions. While each individual sales tax exemption is not going to break the budget, when taken as a whole, the exemptions drain much-needed revenue out of the state’s coffers.
The sales tax in Wisconsin already includes several dozen exemptions. Some exemptions represent a significant amount of lost tax revenue. For example, the exemption for food reduced state sales tax revenue by $534 million in 2010. Other sales tax exemptions represent a very minor amount of lost revenue, like the exemption for live game birds and clay pigeons, which reduced state revenue by $200,000 last year.
The sales tax in Wisconsin already includes several dozen exemptions. Some exemptions represent a significant amount of lost tax revenue. For example, the exemption for food reduced state sales tax revenue by $534 million in 2010. Other sales tax exemptions represent a very minor amount of lost revenue, like the exemption for live game birds and clay pigeons, which reduced state revenue by $200,000 last year.
Tuesday, November 8, 2011
$4.7 Billion from Two Recovery Measures Directly Benefitted Wisconsin Residents
Over the last three years, Wisconsin residents received $4.7 billion in direct payments from the federal government in the form of extended unemployment benefits ($3.2 billion) and payroll tax cuts ($1.5 billion). These payments, which were aimed at stimulating the economy and helping families hit hard by the recession, will expire at the end of the year unless Congress takes action.
These two emergency federal supports put money into the pockets of struggling Wisconsin families and injected much-needed dollars into the local economy, saving thousands of jobs and reducing the severity of the recession. These benefits supported consumer spending during a critical period, when the economy was severely weakened by a major financial crisis, and helped sustained demand for business products across the country and in Wisconsin.
These two emergency federal supports put money into the pockets of struggling Wisconsin families and injected much-needed dollars into the local economy, saving thousands of jobs and reducing the severity of the recession. These benefits supported consumer spending during a critical period, when the economy was severely weakened by a major financial crisis, and helped sustained demand for business products across the country and in Wisconsin.
Thursday, November 3, 2011
America’s 280 Most Profitable Corporations Get $223 Billion in Tax Subsidies
Report Finds that Thirty Extremely Profitable Corporations Enjoyed a Negative Income Tax Rate
A comprehensive new study that profiles 280 of America’s most profitable companies finds that 78 of them paid no federal income tax in at least one of the last three years. Thirty companies enjoyed a negative income tax rate over the three year period, despite combined pre-tax profits of $160 billion. These are among the findings in “Corporate Taxpayers and Corporate Tax Dodgers, 2008-2010,” released Thursday by Citizens for Tax Justice and the Institute on Taxation and Economic Policy.
“These 280 corporations received a total of nearly $223 billion in tax subsidies,” said Robert McIntyre, Director at Citizens for Tax Justice and the report’s lead author. “This is wasted money that could have gone to protect Medicare, create jobs and cut the deficit.”
A comprehensive new study that profiles 280 of America’s most profitable companies finds that 78 of them paid no federal income tax in at least one of the last three years. Thirty companies enjoyed a negative income tax rate over the three year period, despite combined pre-tax profits of $160 billion. These are among the findings in “Corporate Taxpayers and Corporate Tax Dodgers, 2008-2010,” released Thursday by Citizens for Tax Justice and the Institute on Taxation and Economic Policy.
“These 280 corporations received a total of nearly $223 billion in tax subsidies,” said Robert McIntyre, Director at Citizens for Tax Justice and the report’s lead author. “This is wasted money that could have gone to protect Medicare, create jobs and cut the deficit.”
Tuesday, November 1, 2011
Five Things You Might Not Know About Public Employees in Wisconsin
1. Compared to other states, Wisconsin has a lean public sector
In 2010, Wisconsin had 6 percent fewer state and local government employees relative to our population than the national average, according to an analysis of Census Bureau data. Wisconsin had a leaner public sector than all but 11 states in 2010, the most recent year for which there are figures.
The Wisconsin Budget Project has published an analysis of state and local government employment levels in Wisconsin and nationally, which can be found here.
In 2010, Wisconsin had 6 percent fewer state and local government employees relative to our population than the national average, according to an analysis of Census Bureau data. Wisconsin had a leaner public sector than all but 11 states in 2010, the most recent year for which there are figures.
The Wisconsin Budget Project has published an analysis of state and local government employment levels in Wisconsin and nationally, which can be found here.
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