(And Why It’s So Important that We Get It Right)
In Wisconsin, our past investments in education, public structures, and a world-class university have paid off. We are enjoying a high quality of life made possible by those who have gone before us, and we owe it to future generations to continue to invest in our communities. To do that, we need to have a tax system that provides a stable, sufficient, and progressive source of revenue.
Wisconsin’s tax system has allowed the people before us to build schools and roads, to create jobs, and keep college affordable. Now the Legislature has started to unravel some of the investments we have made over the years. In order to get Wisconsin’s tax system back on the right track, here are five fixes we need to make:
1. Keep tax credits that encourage work, and help families get a leg up to the middle class. In the biennial budget, the Legislature cut $56 million over two years from an effective tax credit that helps parents with children lift themselves out of poverty. This means that a single mom who works at a minimum wage job and has three children will see her refund for 2011 shrink by more than $500.
2. Invest money to access uncollected tax dollars. An investment of $12.5 million in resources for tax collection could generate an additional $100 million in revenue. Instead, the state has reduced Department of Revenue staff and let many positions stand vacant.
3. Reverse recent tax cuts that primarily benefit the wealthy. At the same time that the Legislature increased taxes for working families, it cut taxes on capital gains. This shifts some of the responsibility for our tax system from the wealthy to those who can least afford it. That’s not a path forward to shared prosperity.
4. Turn back tax increases that hit seniors and low-income families. By voting to not adjust the Homestead tax credit for the cost of living, the Legislature increased the property taxes paid by low-income owners and renters.
5. Link tax cuts for corporations to job creation. Last year, the Legislature passed a tax cut for manufacturers that, when fully phased in, will mean these businesses will pay virtually nothing in state income tax. This benefit does not require that the businesses create a single job.
If we want to make sure that we are able to hand strong communities down to our children, we need to protect the investments we’ve made in the past. This Tax Day, let’s work to insure that we strengthen Wisconsin’s tax system by making these needed improvements.