If I were a state legislator, I would certainly vote for the income tax cut plan introduced by Rep. Dale Kooyenga (R–Brookfield).

That sounds like faint praise, but there doesn’t seem anything wrong with Kooyenga’s plan besides the fact that the tax cuts are too small. Politics is the art of the possible, after all.

The MacIver Institute describes it in nicely graphic terms:

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In a previous interview with the MacIver News Service, Kooyenga said little used tax credits should be removed from the tax code. The refundable credits that Kooyenga eliminates in his plan include the Dairy Manufacturing Tax Credit, the Meat Processing Investment Tax Credit, the Film Production Tax Credit, and others.

The Representative deletes the Jobs Credit from the tax code as well, which some say was a way that government would pick winners and losers. The Jobs Credit provides a wage subsidy to employers of up to 10 percent and a subsidy for certain employee training expenses for new hires. By deleting the credit, expenditures are projected to decrease by $1.75 million in 2014-15 and is expected to reduce annual expenditures by $7 million in 2015-16 and up to $17 million in 2021-22.

Kooyenga told the MacIver News Service that the Jobs Credit actually hurts businesses that made tough decisions and retained employees during the recession. He said businesses that fired employees and are now hiring them back would see a tax credit, which shows the unfairness in the Badger State’s tax code.

The non-refundable credits that would be deleted from the tax code include the Dairy and Livestock Investment Credit, the Post-Secondary Education Credit, the Ethanol and Biodiesel Fuel Pump Credit, the Water Consumption Credit, the Relocated Business Credit, the Community Development Finance Credit, and others.

Some of the credits that are repealed in Kooyenga’s plan have not been claimed for many years or have had very few claimants.

If I were a state legislator, I would certainly vote for the smaller income tax cut plan included in the 2013–15 state budget, if Gov. Scott Walker’s proposal were the only option besides keeping our taxes the fifth highest in the U.S.

If I were a state legislator, however, I would have introduced a far larger income tax cut plan. Remember that Gov. James Doyle increased taxes by $2.2 billion. Simply repealing Doyle’s tax increases would be worthwhile.

Another possibility would be to cut taxes by an equivalent amount, though different from the taxes Doyle increased. As I’ve written in this space before, the correct corporate income tax rate is zero. In the 2010–11 fiscal year the state collected $852.9 million, which is just 6.6 percent of total state General Purpose Revenues. So the state could cut that much by eliminating corporate income taxes (for one thing: no taxes, no tax breaks), and use the remaining $1.3 billion or so as investor-friendly income tax cuts, which would be nearly twice the size of Kooyenga’s proposed tax cut.

The Milwaukee Journal Sentinel reported that wealthy taxpayers would see the largest tax cuts. Independent of whether Wisconsin actually has wealthy people (not really, with about 10 exceptions), the fact is that wealthy people pay the lion’s share of state taxes — specifically, the top 10 percent in income pay half of state income taxes. It is impossible to give tax cuts to people with zero net tax liability. The purpose of taxes is to raise funds for government operations, not redistribute income.

There are inevitably claims that tax cuts produce deficits. That is only the case if the tax cut isn’t accompanied by spending cuts. (Although the increased economic activity from people having more money means that tax cuts produce more tax revenue, and the decreased economic activity from tax increases means that tax increases fail to produce expected revenue.)

It isn’t within the province of a state budget, but as I’ve also previously written here, passing tax cuts is not enough, since future editions of the Legislature can undo them. (As the 2009–10 Legislature, which passed Doyle’s tax increase, demonstrated. How the voters felt about that was demonstrated by the fact that the Legislature has been controlled by Republicans since the 2010 election.) This state continues to need permanent (as in constitutional) limits on spending and required voter approval for tax increases. Without them, state and local governments spend twice what they would have spent had their spending increases been limited to population growth plus inflation since the late 1970s. And since the late 1970s, this state trails the national average in per capita personal income growth.