If the trial balloon accomplishes nothing else, Gov. Scott Walker certainly ignited a debate about Wisconsin’s taxes by proposing the end of the state income tax.

That debate is playing itself out on blogs and newspaper opinion pages across the state.

Democrats oppose Walker’s trial balloon, of course, but fail to suggest something better — for instance, 17th Senate District candidate Ernie Wittwer:

The best guesstimates available are that the sales tax would have to grow to 13.5 percent, if the state’s general fund is to remain solvent. That would put Wisconsin’s sales tax far higher than any other state’s. If this were done the tax burden would shift from people with wealth to people in the middle income and lower income brackets.

The Wisconsin Budget Project blog did some of the numbers on the proposal. They estimate that taxpayers in the lowest 20 percent income bracket would pay 5.4 percent more of their income in taxes. The top 1 percent would reduce the share of their income paid in taxes by 4.1 percent. Stated another way, the people with an average income of $14,000 would see an increase of nearly $750 in state taxes; people with incomes in excess of $1 million would see a cut in state taxes of nearly $44,000.

We probably would not raise the sales tax to 13.5 percent. The alternatives would involve extending the sales tax to more items. The largest items currently excluded from the tax are food; fuel and electricity for home, farm and manufacturing use; professional services; medicines, motor fuel; and machinery and equipment for farming and manufacturing. Placing the sales tax nearly any of these items would further shift the tax burden to those who are least able to pay.

The other alternative is to cut state expenditures. Public education and post-secondary education have already been cut. State medical programs are already hurting. Aids to local governments have been stagnant. Perhaps we really don’t need meat inspections and other similar state programs? Good candidates for cuts really are not apparent, at least in the amounts that would be needed.

Apparently the organization that wants to end school funding by property taxes still exist, because its creator is writing letters to the editor:

It is not fair that half of Wisconsin income, sales and property are exempt from taxes — which means others pay more.

It is not fair when some years farmers and businesses pay more in property taxes than they earn because property taxes are not based on income.

It is not fair that seniors are forced from their homes, church, community and state because the property tax is not based on ability to pay.

It is not fair when young families cannot qualify for a home loan when the tax is factored into payments.

If everyone paid income and sales taxes, the property tax could be eliminated and income and sales tax rates cut for all. Exemptions from a state tax should not exist as violates equal protection under the law.

When all pay the fairer income and sales tax we do not need the unfair Wisconsin property tax.

Brian Fraley proposes getting rid of one of the taxes within the income tax:

In 2011 the legislature passed the Manufacturing and Agriculture credit. The phased in tax cut was sold as: If you make it or grow it in Wisconsin, income from that activity would be tax free.

For more on the M & A credit, see here.

Wisconsin’s chamber of commerce said the new credit would impact manufacturing in 3 distinct ways.

• First and foremost, the credit will be a powerful incentive for existing manufacturers to expand their facilities here.  Manufacturers that are already located in Wisconsin often have difficult choices to make when considering expansion in Wisconsin versus expanding facilities elsewhere.  While Wisconsin has many advantages of interest to manufacturers, there is no question that Wisconsin’s individual and corporate income/franchise taxes are among the highest in the nation.  This credit will help tip the balance in favor of expansion here.  The timing of the credit is crucial as the economy continues to recover and manufacturers act on plans to meet expected demands;
• For the same reasons, this credit will encourage some out-of-state firms to locate their production facilities in Wisconsin as they expand;
• Finally, the credit will provide an incentive for start-ups to take root here in Wisconsin.

But legislative intent was not followed. Unfortunately for thousands of people and businesses in Wisconsin, the tax break would only be offset by their now being subjected to the State’s Alternative Minimum Tax.

Federal and state tax laws treat different kinds of income differently. In addition there are a myriad of special deductions and credits for various expenses.

Wisconsin’s AMT demands that, when certain criteria are met, Wisconsin income is taxed at a rate of 6.5%. Liberals argue that Alternative Minimum Taxes ensure that all individuals who benefit from these tax advantages will pay at least their fair share of taxes.

But the AMT is essentially a second income tax system. It makes compliance with our tax laws more complex. So not only does this hurt our ranking among the states when it comes to overall tax burden, The additional compliance cost hurts our state’s overall business ranking when compared to the more tha 40 states without an Alternative Minimum Tax. …

What can be done?

Simple. Wisconsin should not have two separate income taxation systems. The time is now to repeal the Wisconsin Alternative Minimum Tax.

Republicans have an obligation to not spend the new revenues and they also have an obligation to do the right thing and fulfill their tax cut promises of 2011 and 2013.

Here’s hoping a straightforward, complete and stand alone repeal of the AMT is offered, debated, passed and signed into law this spring, before the AMT monster grows even uglier.

I think the solution is not necessarily to eliminate one class of taxes, but to reduce, in this case, both income and property taxes without increasing sales taxes. Reducing taxes by increasing other taxes is not an answer.