While we’re pleased that Congress and President Barack Obama agreed Monday to block across-the-board tax increases set to take effect with the start of the new year, perhaps it’s time to look at tax policies a little closer to home.
That’s on the agenda of Assembly Speaker-elect Robin Vos, who recently put forth a proposal for reforming Wisconsin’s tax code and giving some tax relief to beleaguered middle-class taxpayers.
Vos, R-Rochester, sketched out his plan recently when The Journal Times asked area legislators for their “Big Idea” for core policy changes or legislative initiatives this year.
“People who are poor have a tax code that’s so complicated they have to pay a preparer,” Vos said, “People who are middle income have a system that is totally biased against them if you look at the national rankings and we have a tax code that is riddled with things that supposedly have some kind of economic benefit, but many times it’s dubious at best. So I think we need to look at that.”
We could almost hear the chorus of hosannas from the middle class against the background chorus of bawling from special interest oxen, soon to be gored.
Of course, Vos’ idea for state tax code reform is still in its developmental stages and the oxen have not been named yet and the source of revenues or government cuts to make up for a middle-class tax cut have not been identified. As Assembly Minority Leader Peter Barca, D-Kenosha put it, “the devil’s in the details.”
We would expect those details could trigger ferocious debate, but given that Vos and state Republicans control the state Assembly and Senate as well as the governor’s office, if Vos wants to get this done there is a high likelihood it will succeed.
There is no question that state tax credits and exemptions have grown with each passing year and now is as good a time as any to check them and see if they’re doing the job that was intended or if they’re just low-hanging fruit for businesses smart enough to collect them. The last time Wisconsin looked at the state tax code was in 1999 and it’s overdue for a revamp and a simplification. Tax credits and exemptions may well serve the aims of government, but Vos’ contention that those credits and exemptions are actually working and should show they are producing the desired effects is compelling.
Middle-class taxpayers — perhaps more than any others— have felt the pain of the recession and would welcome relief. Compared to other states, Vos argument for tax relief for them is bolstered by the fact that Wisconsin ranks in the top five nationally for highest-paying middle-class taxpayers. But, again, if there is a cut in taxes for the middle class, the means a drop in state revenues. In the past, Vos has noted that Wisconsin generally treats lower-income groups pretty well with its social programs and tax policies. Will a middle-class tax cut come at their expense? Or will it come from upper-income classes — a notion that has triggered considerable debate on the national level? Or will it come from less government and fewer services?
Those are all tough questions, and we hope Vos is able to put some good answers with them in the weeks ahead. Wisconsin’s tax code has grown unwieldy and screams for simplification, it’s overdue for an overhaul.