Tax Fairness Failure
Media Rants by Tony Palmeri
From the April, 2003 edition of The Valley
Listening to Jim "The New Democrat" Doyle and the Wisconsin legislature, you'd think that we the people are too stupid to recognize the politicians' "no tax increase" promise as a pathetic smokescreen. Doyle wants a $526 million fee increase (including massive Republican endorsed UW tuition increases), while the Republican Caucus' plan for deep cuts in the state's shared revenue program will force local governments to squeeze more from the little folks. In Madison's madcap world, this constitutes "no tax increases."
Contrast Doyle and the Republicans' shameful shell game with Bob LaFollette. Chapter 7 of Fightin' Bob's 1912 Autobiography ("How We Passed The Railroad Taxation Laws") gives us a governor and legislative majority willing to confront the corrupt corporate control of the budget. LaFollette describes how getting Wisconsin out of debt took "years of struggle" against corporate interests. But when the dust cleared, "we brought in so much property hitherto not taxed or unequally taxed that, while the expenses of the state have greatly increased, still the burden of taxation on the people has actually decreased . . . Wisconsin today leads all the states of the union in the proportion of its taxes collected from corporations. It derives 70 percent of its total state taxes from that source . . . "(emphasis added).
By the time Tommy Thompson got through rolling back every last piece of progressivism in the tax code, corporate contributions whittled down to 4.2% of the total tax intake. Tommy's Administration secretary Mark Bugher told the Milwaukee Journal Sentinel that the corporate tax is "so shot full of exemptions and loopholes and credits and exceptions and complications that it becomes almost irrelevant to the revenue stream of the state."
Doyle and the Republicans apparently intend to continue in the Thompson tradition
of big business tax breaks and snow jobs for the rest of us. They can get away
with this because the corporate press allows them to. While the LaFollette Progressives
had to fight an establishment press providing cover for corrupt political bosses,
the majority in the legislature and Governor LaFollette were in sync with tax
Today, tax fairness muckrakers tend to be relegated to small circulation newspapers,
the Internet, low budget think thanks, and academia. Meanwhile, the mainstream
corporate media give favorable treatment to studies supporting the Wisconsin
Manufacturers and Commerce (WMC) position on taxes while the same media minimize
studies that expose how regressive our tax system really is.
Consider two studies released early in 2003: one by the Wisconsin Policy Research
Institute (WPRI), the other by the Institute on Taxation and Economic Policy
(ITEP). The WPRI study argued that if the state were to try to mend its budget
deficit by increasing sales and income taxes, over 84,000 people would lose
their jobs. WMC's Jim Pugh said "This study clearly shows those tax increases
are job killers." In a Jan. 23 editorial the state's most influential newspaper,
the Milwaukee Journal Sentinel, used the WPRI study as support for no tax increases:
"But any impulse to solve this problem with higher taxes ought to be resisted.
A study released this week by the Wisconsin Policy Research Institute suggests
some reasons why."
Though the WPRI has deep Republican roots and has received millions of dollars
from the conservative Bradley Foundation, New Democrat Doyle parroted their
tax study in his January 30th State of the State address: "Wisconsin is
already one of the nation's most heavily taxed states. Adding to the burden
would make it virtually impossible to attract new jobs while destroying more
than 50,000 of the ones we already have." Not until February 8th did the
Journal Sentinel allow significant criticism of the WPRI report. An op-ed by
Economist Michael Rosen questioned the report's assumptions and chided the Journal
Sentinel for how the paper "uncritically accepts its [the WPRI study] assertions.
No economists who are critical of the report's methodology are quoted."
The Institute on Taxation and Economic Policy study, minimized, misrepresented,
or maligned in the press, showed that in 2002 the richest 1% of Wisconsin taxpayers
paid 8.1% of their income in state and local taxes, and only 5.9% after federal
itemized deductions. Middle-income taxpayers paid 11.9%, or 11.3% after the
federal offset. The poorest 20% of taxpayers paid 10.2%.
Since more "liberal" foundation monies and individual contributors
support ITEP, one might expect a Democratic governor or the Democrats in the
legislature to endorse the study. We won't hear an endorsement, and here's why:
as reported by the Wisconsin Democracy Campaign (www.wisdc.org), "all sectors
of the business community - finance, manufacturing, construction, retail and
service - have contributed $29,171,939 to candidates for the Legislature and
statewide office between 1993 and Aug. 26, 2002."
The truth is that a progressive tax system would not only cure our budget deficit,
but also allow us to reduce taxes for the majority of Wisconsinites. We know
that Doyle and the legislature won't stand up to their corporate masters, so
it's time for editorial writers and reporters to stand up to their own. As noted
by LaFollette, "one would think that in a democracy like ours, people seeking
the truth . . . would find the press their eager and willing instructors."
Tony Palmeri is an Associate Professor of Communication at UW Oshkosh and Co-host of "Commentary," a campus public affairs program.