Wisconsin not open for business yet
Publication: Waukesha Freeman (Conley); Date: Jan 20, 2011; Section: Opinion; Page: 8A
Wisconsin not open for business yet
Signs are nice, lower taxes better
If you were driving into Wisconsin on Tuesday, you might have passed Governor Scott Walker at the border. No, he wasn’t collecting tolls from Chicago Bears fans. Unfortunately the Interstate Commerce clause prevents picking on only Chicago residents to pay tolls, as much as we might find satisfaction in raising revenue for the state that way.
Walker was participating in the traditional changing of the “Welcome to Wisconsin” signs that follows every change in administration.
For eight years, when you have returned from the Mall of America or the Six Flags amusement park, Jim Doyle’s name greeted you. This time when the signs were changed, they were changed to “Open for business.”
It may not be as satisfying as asking Bears fans to cough up $1.75 to ride our freeways, but the new attitude in Wisconsin has caught the attention of our southern neighbors just the same.
Illinois just increased personal income taxes a whopping 67 percent and the corporate income tax 46 percent. Walker took the opportunity to go on the Illinois airwaves to tell them Wisconsin is not only not planning on raising taxes, but will soon be lowering them.
Wisconsin better follow through. As shocking as Illinois’ tax increases sound, Illinois’ taxes are still lower than Wisconsin’s.
One of my favorite mantras on the Democratic side of the political aisle has been how Wisconsin is no longer a tax hell because we supposedly have dropped out of the top 10. What they fail to mention is that Wisconsin’s tax rankings improved largely because other states’ taxes went up, not that ours went down.
They also don’t mention that the tax rankings don’t include the $2 billion in tax increases enacted by the Democrats during the last legislative session. Even before the tax increases, The Tax Foundation ranked Wisconsin 9th highest overall (not 15th as former governor Jim Doyle and others have claimed). Now Wisconsin’s tax ranking is about to get a bump, and not in a good way.
Currently the Tax Foundation ranks Wisconsin 40th in the State Business Tax Climate ranking for 2011, a pretty terrible score. We’ll see if the Republican-controlled Legislature and Walker can get Wisconsin out of the bottom.
Meanwhile, Illinois is ranked much higher at 23rd overall. Even with the tax increases, the Tax Foundation puts Illinois in 36th place. So if Illinois’ tax hikes are the targets of our laughter, imagine how they have enjoyed a laugh at our expense for many years.
The good news for Wisconsinites looking for bragging rights is that Wisconsin will finally be higher than Illinois in the corporate tax climate ranking. That gives you some idea how badly individuals are getting socked in Wisconsin.
Of course, that assumes Illinois doesn’t follow through on the promise to lower their income tax rates again in four years.
If Wisconsin is seriously going to compete with its neighbors on something other than a football field, the state is going to have to make some serious structural changes. Reconstructing the state’s Commerce Department into a business-friendly agency is a good start. So is offering incentives for businesses that move here.
Lowering tax rates for small businesses, having a simplified regulatory system, and implementing tort reform will also help improve business economic conditions in Wisconsin.
However, Wisconsin needs to commit itself to lower taxes permanently. We can do that by requiring a supermajority to raise taxes, and putting that requirement in the state constitution. Such a requirement will prevent future Legislatures from repeating the mistakes of the past in assuming we can always tax ourselves out of whatever spending hole we dig ourselves.
While the constitutional process moves forward, the current Legislature can impose a supermajority for raising taxes on themselves, as Walker has requested. By imposing such a requirement now, it would prevent the Legislature from retreating later when pressure groups try to get them to back down from the necessary spending cuts.
Illinois residents were probably frustrated when they heard their Legislature, in a lameduck session, acted to raise taxes so drastically. That frustration must have given away to some amusement when Walker said Wisconsin is “open for business.”
It’s time to put our tax levels where our mouth is.