Assembly candidate Jay Schroeder contributes his two cents to a state Senate race:
It is an idea that Gov. Scott Walker says he is interested in considering. Congressman Paul Ryan thinks it would be a great change for the state, and state Sen. Alberta Darling likes the idea as well. GOP leaders in Wisconsin have lately voiced their support for eliminating the state’s income tax.
But eliminating the income tax is not something a pair of Republican candidates running for state Senate in southeast Wisconsin agree on. Jonathan Steitz and Van Wanggaard last week debated each other on a myriad of issues at a forum hosted by the Racine Taxpayers Association.
“Yes,” was Steitz’s quick response when asked if he believed the state’s income tax should be eliminated. “I think that the income tax, more than anything else, is what suppresses economic development,” the conservative financial advisor said.
“There are many states that do very well, better than most states in the country, that have no income taxes,” Walker told a gathering of business leaders last fall. Throughout year-end interviews last December, Walker reiterated to numerous media outlets his openness to eliminating the income tax.
“I think he should. I think it’d be great,” said Congressman Ryan, chairman of the House Budget Committee, when asked by the MacIver Institute about Walker and eliminating the income tax. Ryan explained that states that have no income tax and rely instead on other taxes have thriving economies.
“I think that’s fantastic if we could do that here,” he said.
“Oh, I would love that,” state Sen. Darling said of the idea. Darling is the co-chairperson of the legislature’s powerful Joint Finance Committee.
Seven states currently do not have income taxes, and 2 more states do not tax wage income. Wisconsin’s income tax is the second oldest in the nation; it was enacted in 1911.
According to research at the Kansas Policy Institute:
“States without an income tax have significantly better growth in private sector GDP (59% versus 42%) over the last 10 years. They increased the number of jobs by 4.9% while jobs in the rest of the states declined by 2.6%.”
Job growth is a big topic for this election as candidates tout their respective ideas for encouraging private sector job creation.
The Heartland Institute’s Matthew Glans argued in January of this year that eliminating Wisconsin’s income tax would be a good thing.
“Income taxes are among the most disruptive factors affecting economic growth. They discourage capital from flowing into a state and hinder the creation of new jobs. Eliminating Wisconsin’s income tax would be a strong step toward making the state more competitive and attracting new business.”
Schroeder’s take: “I look FORWARD to working on eliminating the state income tax to make the “Morning in Wisconsin” even brighter.”
Neither Stietz nor Schroeder nor Glans nor anyone else has explained how this would work in Wisconsin. Walker so far has declined to actually cut state government, and it seems unlikely many Wisconsinites, who have grown up on the assumption that more government is always better, would be happy with, say, a one-third cut in the size of government. (They would be wrong, of course, but yesterday’s progressive is today’s socialist.) No proponent of eliminating the income tax also has laid out which taxes should be increased to make up for the income tax revenue loss. (The most unpopular tax in this state historically isn’t the income tax, it’s the property tax, relief for which the income tax and the sales tax were created.)
This is not sufficient at all. Candidates who propose eliminating the income tax need to spell out exactly what they propose.
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