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Tax increases hurt business and kill jobs

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Sen. Scott Fitzgerald
March 10, 2009

When a business can’t make ends meet, it has to lay off employees. In the midst of a recession with employers struggling and people losing their jobs, the wrong thing for government to do is take more money from them. Government can’t keep dialing up taxes to fuel state spending and pretend it won’t cost jobs. Unfortunately, that’s exactly what Democrats are doing.


Senate Majority Leader Russ Decker, D-Schofield, recently wrote a column (Page 9A, March 3) trying to justify why he and Gov. Jim Doyle have passed, and are proposing more, massive tax increases on employers. He talks about closing a “Las Vegas loophole” in which he wrongly accuses Wisconsin employers of avoiding tax payments. What he’s referring to is “combined reporting,” in which government collects taxes from Wisconsin businesses on income derived in other states.


One company that will be hard hit by the new tax is Frito-Lay, which has plants in Beloit, Beaver Dam and other locations across Wisconsin. We have worked hard through the years to encourage such companies to locate and expand in our state.


Gov. Doyle and legislative Democrats turned a deaf ear to businesses’ concerns when they made combined reporting state law and proposed more backbreaking taxes on top of it. Hundreds of companies, large and small, will be hit hard by this quarter-billion dollar annual tax increase. Now they’re deciding whether they can keep operating in Wisconsin. If they decide to move those jobs out of our state, they’re gone for good.


Many of these employers have been calling me to ask why Democrats are punishing them. John Radke, president of BioResearch, which employs 15 people in Brown Deer, said this will make him reconsider expanding here in the future. Procter and Gamble, which provides 1,000 good-paying jobs in Green Bay, will be hit with $5.4 million more in taxes each year.


The lesson that Sen. Decker should have taken from Miller Coors choosing Illinois over Wisconsin is that our business climate is worse than Illinois’ even without combined reporting. Other states have combined reporting, but most remain more attractive for businesses because many other factors rank Wisconsin’s business climate among the worst in the country. In Forbes Magazine’s 2008 ranking of the best states for business, Wisconsin ranked 43rd. More taxes on businesses will only pull Wisconsin’s ranking down further.


The nonpartisan Tax Foundation shows that Wisconsin’s business tax climate is not competitive and that taxes matter to businesses when considering where to locate. Wisconsin Democrats worsened our state’s business climate at the worst possible time—when we’re in the midst of the worst recession in decades.


Republicans launched the WISCONSIN JOBS NOW Task Force to hear from employers on what the government should and should not do to help them maintain and create jobs. The first thing they say is to stop raising the price of doing business. Private-sector growth, not government, will dig us out of this recession.


Visit the Web site www.wisconsinjobsnow.info for more information on the task force.


Sen. Scott Fitzgerald, R-Juneau, is Senate minority leader and represents the 13th Senate District. Write to him at Room 202 South, State Capitol, P.O. Box 7882, Madison, WI 53707-7882; call him at (608) 266-5660 or e-mail Sen.Fitz-gerald@legis.wisconsin.gov.

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