Happy (?) Tax Freedom Day

As you know, the Tax Foundation’s Tax Freedom Day is the day when we taxpayers are done paying our federal, state and local taxes for the year, and everything from here until Dec. 31 goes to such frills as housing, food and clothing.

As you know, Wisconsin has the fifth highest state and local taxes in the country.

So it shouldn’t be surprising that today, Tax Freedom Day in Wisconsin, is the 11th latest Tax Freedom Day in the nation.

I bring this up not just because Tax Freedom Day is today, but because of a snarky comment The Capital Times made about a blog of earlier this week:

Wisconsin right-wing bogger Steve Prestegard, convinced that Wisconsin under Scott Walker is doing just fine, quotes another right-wing blogger, Christian Schneider, to explain why Wisconsin is lagging so far behind other states in job creation and economic growth. The conclusions are, well, interesting.

At the risk of appearing to not appreciate the attention for my “bog,” whoever wrote this clearly didn’t read what I wrote, which was that things under Walker are not just fine, but they have been not just fine well before Walker took office. My proof is in this appalling comparison of taxes to personal income dating back to the days of Gov. Patrick Lucey:

state vs nation income

This graphic (from this page) shows this state’s percentage of income in taxes, and (in the third column) its national ranking. (We are apparently supposed to believe that ranking fifth is better than first or second.) The last column is national average per capita income, and two columns to the left is Wisconsin’s average per capita income for that same year.

Since 1977, when Jimmy Carter was president and Martin Schreiber (who took over as governor after Carter named Lucey ambassador to Mexico), and I was in middle school, Wisconsin’s per capita average income was higher than the nation’s in only three years, 1978 through 1980. Every year since then, Wisconsin’s per capita average income has been less than the national average. (And the gap was particularly bad between 2005 and 2009, when James Doyle was governor. Contrary to Christian Schneider‘s assertion that Wisconsin fared relatively well in the late 2000s recession, state per capita average income was $6,700 less than the national average between 2008 and 2010.)

Think you could have used another $1,600 of income (the 2010 difference between Wisconsin average income and national average income)? Well, thanks to the state government and the 3,120 local governments, you can’t have it. (Imagine what the state’s economy might be like if every Wisconsinite had $1,600 more in his or her wallet every year. Well, you can’t have that either.)

Politicians who oppose radical state and local tax reform would claim the link between high state and local taxes and below-average personal income is correlation, not causation. That link has been the case every year since 1980. That’s not an accident, and that’s not a coincidence. Remember the economic rule that if you want less of something, tax it? Apparently Wisconsin voters are fine with less income; they’ve been voting that way for decades.

So, for the illiterates at The Capital Times: No, Wisconsin is not “just doing fine.” Wisconsin hasn’t been “doing just fine” for a long, long time. Wisconsin will not do “just fine” until Wisconsin takes the radical step of substantially lower taxes (how about ranking 25th in state and local taxes instead of fifth?) and a much smaller government to match. That means cutting taxes a hell of a lot more than 27 cents per day and making it impossible to raise them without taxpayer approval (remember the Taxpayer Bill of Rights?).

3 thoughts on “Happy (?) Tax Freedom Day

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