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Wisconsin tax ranking improves, but still work to be done

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Brian Taffora
April 24, 2010

Wisconsin has never been known for its low tax burden. Even among those who didn’t believe Wisconsin was a “tax hell,” as some have called it, none have said that Wisconsin’s tax climate was ideal.


But a recent report prepared by Ernst and Young for the Council on State Taxation ranked Wisconsin’s state and local tax burden on businesses 30th in the country—significantly better than the national average.


In addition, an investigation by the Milwaukee Journal Sentinel found that while Wisconsin tends to rank poorly when only income and property taxes are considered, once various fees are taken into account—such as toll roads and vehicle registration—Wisconsin’s ranking falls close to the national average.


And a new Department of Revenue report shows that Wisconsin has made a great deal of progress during the past several years in reducing the tax burden on residents and businesses.


The DOR report found that Wisconsin’s state and local tax rankings dropped to 15th per $1,000 of personal income and 21st per capita among the 50 states and the District of Columbia. That’s the best ranking for the state in nearly 50 years—since the 1961-62 fiscal year.


Wisconsin was also near the national average in terms of general revenue collected at 24th per $1,000 of income and 25th per capita—the lowest level for the state in the history of U.S. Census Bureau data.


All of this new data adds up to good news for Wisconsin.


Because of the good work done by Gov. Jim Doyle and the leadership in the state Legislature—both Republican and Democratic—Wisconsin has fallen out of the top 10 “worst taxed” states, and continues to fall. Since Wisconsin was ranked 16th in the 1961-62 fiscal year, the state has only been out of the top 10 three times. Once was in fiscal year 1979-80, and the other two were in FY 2005-06 and FY 2006-07—the two most recent fiscal years examined by the state Department of Revenue.


This isn’t exactly cause for celebration. No longer being among the top 10 worst taxed states in the nation—while certainly an improvement—is not the goal we should set for ourselves. Clearly, more work must be done to further reduce the tax burden and make Wisconsin more competitive in attracting companies and highly skilled workers.


But it’s also clear that we’re on the right track. Our state and local taxes—relative to the national average—have consistently fallen almost every year for the past decade, and that bodes well for the future competitiveness of our state. That is the direction we must continue.


We look forward to working with the Doyle administration, the next administration, and leaders in the state Assembly and Senate to improve Wisconsin’s tax climate and grow new, well-paying jobs in our state.


Brian Taffora is vice president of Government Relations & Operations for the Wisconsin Business Council, which seeks to support Wisconsin’s economic climate and quality of life through collaboration, improved public policy and private-sector initiatives. For more information, visit wibusiness.org.

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