Kevin Fischer is a veteran broadcaster, the recipient of over 150 major journalism awards from the Milwaukee Press Club, the Wisconsin Associated Press, the Northwest Broadcast News Association, the Wisconsin Bar Association, and others. He has been seen and heard on Milwaukee TV and radio stations for over three decades. A longtime aide to state Senate Republicans in the Wisconsin Legislature, Kevin can be seen offering his views on the news on the public affairs program, "InterCHANGE," on Milwaukee Public Television Channel 10, and heard filling in on Newstalk 1130 WISN. He lives with his wife, Jennifer, and their lovely baby daughter, Kyla Audrey, in Franklin.
And I don’t mean the sunshine, pretty mountains, cactus, or deserts.
I’m talking taxes.
Nothing short of miraculous has transpired in Arizona.
Nearly thirty years ago, Arizona had one of the nation’s worst tax burdens as a percentage of state income, the 5th highest in the nation.
Does that sound familiar Wisconsin taxpayers?
That was 1990.
Today, Arizona’s tax burden with taxes as a percentage of state income has gone from the 5th highest in the nation to 31st highest, according to the non-partisan Tax Foundation in Washington D.C. that keeps track of all tax data. (Wisconsin ranks 7th highest in the country).
How was Arizona able to pull of the dramatic turnaround?
They did it for the same reasons it’s clear that if Wisconsin continues its tax and spending patterns of the past that we’ll be mired in the depths of tax hell for years and years to come.
Arizona dug itself out of a massive hole for two reasons:
1) They CUT state taxes.
2) Individual incomes rose faster than state and local tax collections.
CUT state taxes in Wisconsin?
We can’t even FREEZE taxes!
Remember the entire debate a few years ago about a tax freeze. You would have thought the apocalypse was at hand. The streets would be flowing in blood, grandmothers and babies would starve, people would die before our very eyes.
Freeze taxes? Are you mad?
Amidst that over-reaction and threat to our habit of spending like drunken sailors, imagine the reaction if someone would attempt to CUT state taxes.
Democrats would start ordering strait jackets for anyone who would express such an idea.
#2……..individual incomes in Arizona rose faster than state and local tax collections.
There are a couple of pieces in that equation.
First, there needs to be some restraint on the increase in state and local taxes.
Folks, this is Wisconsin we’re talking about. Slowing the rate of increase in taxation? We tried that a few years ago. It was called TABOR, the Taxpayer’s Bill of Rights.
Remember the reaction?
You want to throw Grandma off the train.
You want to starve innocent children.
You want the elderly to eat dog food.
So tax collections remain high in Wisconsin.
What about incomes?
Per capita income is at rock bottom for Wisconsinites compared to other states.
Those with large incomes leave.
From a blog written by state Senator Mary Lazich (my boss):
“During November 2005, the Wisconsin Taxpayer Alliance issued a very troubling report entitled, "Moving In, Moving on: Migration in Wisconsin." During the five years prior to the 2000 census, almost 669,000 people either moved to or out of Wisconsin. However, the net in-migration into Wisconsin was a meager 7,282.
Individuals with college or advanced degrees were more likely to leave, while those with less education tended to come. Individuals with household incomes above $75,000 left Wisconsin. Those with incomes of $200,000 or more had the highest rates of leaving.
The huge exodus of wealthy Wisconsinites leaving the state caused a loss of an estimated $4.72 billion in net worth and a loss of $455 million in income over the five years of this study. That means far fewer in-state bank deposits, less stock in Wisconsin firms, less investment capital for in-state ventures, and less money given to local charities.”
And why do those with sizeable incomes leave?
Oh, they may be enticed by palm trees and sunshine. But they do leave for states that have far more favorable tax climates than Wisconsin.
Wisconsin continues to tax and spend beyond the ability of the affordability of taxpayers, over and over and over and over and over again.
That is why unless there is dramatic change in the mindset of the governor and the Legislature, you won’t see an Arizona miracle in Wisconsin for a long, long, long time.
That means open your wallets, keep forking your hard-earned money, unless you elect individuals who strongly believe in fiscal responsibility.
For more on tax policies in Arizona, here is an article from today’s Arizona Republic, copied so you don’t have to register, etc.
Tax policies draw attention in hard times
Russ Wiles - Jun. 22, 2008 12:00 AM
The Arizona Republic
Arizonans feeling the pinch from the real-estate slump, sluggish job market and rising gasoline prices can be thankful for one thing: a mild state-tax burden.
But those same policies are starting to exert real pressure on state government, underscored by a $2 billion budget shortfall that legislators are trying to fix.
With the notable exception of sales taxes, Arizona imposes comparatively low tax levies on residents, and the bite has gotten less severe over time.
Two decades ago, Arizona levied the fifth-highest taxes as a percentage of personal income, according to the Tax Foundation, a research group in Washington, D.C. Since then, the burden has dropped significantly because of state tax cuts and because individual incomes have risen faster than state and local tax collections, the group reported.
Except for sales taxes, which Arizonans pay at a rate above the national average, Arizona's consumer taxes are low to moderate.
Depending on your viewpoint, the state's tax policies either reflect impressive fiscal discipline at a time when the federal government routinely runs up billions of dollars in deficits, or they can starve needed programs of funding, particularly now during the state's budget crunch.
Although Arizona isn't as tax-friendly as the seven states, including neighboring Nevada, that don't impose an income tax on individuals, it still comes out looking pretty lenient.
"Compared to higher-tax states back east and in the Midwest, I find many people want to become Arizona residents," said Paul Axberg, a certified public accountant and certified financial planner at Prime Wealth Advisors in Sun City West, who helps a lot of winter visitors with their tax returns.
Dennis Hoffman, an economics professor at the W.P. Carey School of Business at Arizona State University, said Arizona's individual income-tax burden has been slashed more than 40 percent since the early 1990s.
“Our legislators have taken every opportunity to deliver tax breaks to individual households, but it doesn't mean it's providing for the infrastructure that the state needs," he said. "I'd argue that taking the same money and investing it in infrastructure like roads, schools and advanced water systems would be far more enhancing to economic growth."
Some critics would prefer to see the state collect more in taxes and invest the money in education and in research that helps Arizona compete in the global economy. They also feel current tax policies, combined with the slowing economy, have placed a greater burden on the state's safety-net programs in health care and other areas.
Arizona's top income-tax rate is 4.54 percent, and it has fallen in several steps from a peak of 8 percent two decades ago.
Back then, most working Arizonans used to trigger the top rate, as it kicked in on taxable income of just $6,000 for singles and $12,000 for married couples filing joint returns, said Dan Zemke, a spokesman for the state Department of Revenue.
Today, most Arizonans don't earn anywhere near enough to trigger the top rate. The maximum bracket doesn't start for singles until taxable income tops $150,000, and it's $300,000 for married couples.
Contrast that with, say, Colorado, which imposes a flat 4.63 percent rate on residents as a percentage of their federal taxable income, or Utah, whose residents start out paying a 2.3 percent rate that quickly escalates to nearly 7 percent on more than $5,500 of taxable income.
Californians reach their top 9.3 percent rate at less than $45,000 in taxable income.
Arizona also offers fairly generous standard deductions and personal exemptions, which allow residents to avoid more in taxation than a look at tax rates alone would imply.
The state also has several credits, including those to support poor working families, private-school scholarships and extracurricular activities at public schools, that are unusual, said Gregory Carlson, a certified public accountant and certified financial planner at Wealth Management International in Peoria. He cites Arizona's allowance of full medical-expense deductions as another policy that helps many taxpayers.
Arizonans paid about $528 in per capita state income taxes in 2006, ranking 39th, according to the Tax Foundation. That was well behind No. 1 Connecticut ($1,648), No. 5 California ($1,405) and all other close neighbors except Nevada.
Other tax burdens
Arizona partly makes up for mild income taxes with fairly high sales-tax collections. The state's 5.6 percent sales-tax rate is a bit above average. And most Arizona cities and counties impose their own taxes, bringing total sales-tax rates to the 8 percent to 9 percent range.
Arizonans paid $1,470 in per capita sales taxes in 2005, the most recent year for which numbers are available. That was above the national sales-tax average of $1,295.
Most states with no income taxes or mild ones make up for it with heftier sales-tax receipts, including Nevada, whose $2,214 in per capita sales-tax collections ranked second behind Hawaii at $2,284, according to the Tax Foundation.
Arizonans don't face especially high property taxes - the state ranked 35th in such collections in 2005 at $861 per capita, compared with $1,134 for the nation as a whole. But mild property taxes for residents here are partly offset by fairly steep business property taxes.
States also tax their residents in other ways, such as in the consumption of fuel, tobacco and alcohol. Here again, Arizona's take isn't abnormally high, except for a $2-per-pack tax on cigarettes that ranks among the nation's highest. Arizona's alcohol levies are mixed, with wine taxes higher than in most states but liquor and beer taxes on the low side, according to the Tax Foundation.
In addition, Arizona doesn't do much to increase the price of gasoline, imposing a modest tax of 19 cents a gallon. If you're embarking on a road trip, you might want to fill up here before venturing into Nevada (32.5 cents a gallon in taxes), Utah (24.5 cents) or California, which has the highest gasoline tax at 45.5 cents a gallon.
Alaska taxes gas at the lowest rate, 8 cents a gallon.
Also, Arizona, unlike many other states, doesn't impose estate or inheritance taxes, Carlson said.
Tax Freedom Day is a hypothetical date that is sometimes cited to illustrate when people have earned enough money to pay all their federal, state and local tax obligations for the year. It makes for easy comparisons among states and over different periods. Tax Freedom Day arrived April 20 this year in Arizona, according to the Tax Foundation. That was three days earlier than the national average this year and five days earlier than Tax Freedom Day in 2007 for Arizonans.