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Robin Vos Eupdate: This Week in Tax Increases - Sept.11, 2009

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This Week in Tax Increases
If you read the news this week, you might have noticed that there have been a lot of tax proposals. These proposals are obviously very unfortunate. Lawmakers should be doing everything they can to foster economic recovery, instead these ideas will just slow it down. Below is a summary of the tax increases proposed this week.

Governor Doyle's New RTA Plan (.5% sales tax in Milwaukee County ): Governor Doyle has made no secret of the fact that he is in favor of trains - both commuter and high speed. But his actions have been met with significant opposition, even from those in his own party. Earlier this year he submitted his regional transit authority (RTA) plans in the budget, and after much opposition from Democrats, he oddly ended up vetoing out parts of his own proposal.

Many of Doyle's detractors are lawmakers who represent the city of Milwaukee , because the plan didn't provide financial support to the failing Milwaukee bus system. Therefore, Governor Doyle introduced his plan this week to support a .5% sales tax in Milwaukee County for transit in an effort to rebuild a pro-rail coalition.

This is clearly an afterthought rooted only in a desire to create rail lines; not a case of new-found priorities that would have dictated fixing a broken program before creating a whole new giant transit system. This problem has been talked about for some time and could have been done with existing dollars had it been a priority for Governor Doyle. Last fall, County Executive Scott Walker introduced a plan to privatize the airport and reallocate the savings to Milwaukee transit.

Instead, if approved by the Legislature and the County Board , Milwaukeeans will be subject to a tax increase without getting to vote on it. Governor Doyle says Milwaukee has already approved the sales tax increase in a referendum held last November. However, that question was significantly different, in that it called for directing some of the revenue to parks and emergency medical services. Not to mention the economy was not as bad as it is now. Families may decide what was feasible last fall no longer is in this time of high unemployment.

There was one good thing in Governor Doyle's plan, however. He has now stipulated that referenda will be required for any new revenue streams proposed in Racine and Kenosha counties that are not already statutorily authorized. That means if the Southeastern Wisconsin Regional Transit Authority decides they want to impose a sales tax to pay for KRM, they will have to ask the voters.

Rep. Cory Mason's Wisconsin Jobs Initiative (Creation of a new income tax bracket for higher earners): Racine legislator, Rep. Cory Mason proposed a 1% income tax increase on higher earners this week in order to provide more funding to technical colleges and universities. There is a bill in Congress known as the American Graduation Initiative that will provide grants to fund education provided Wisconsin matches the federal money. Mason's proposal would collect $145 million in new income taxes to come up with the match.

Increasing taxes on higher earners means increasing taxes on job creators. That inherently means less jobs, not more. It will simply drive job creators out of the state. Providing more money to retrain unemployed workers is a moot point if there aren't jobs.

That being said, I'm very supportive of providing more money for retraining at technical colleges. That's why I authored an amendment during the budget to provide $35 million of existing stimulus dollars to tech colleges to be directed to high demand career programs and programs with waiting lists. Unfortunately, that motion was voted down by Democrats on the committee.

If fixing the unemployment crisis truly were a priority for Rep. Mason he would have figured out a way to find $135 million from the $4 billion in new revenues in the budget. Instead he voted for almost $4 billion in tax increases that made a poor economy worse, and is now offering another tax increase to essentially kill job creation in Wisconsin .

Fond du Lac's Plan to Keep Mercury Marine in Wisconsin (.5% sales tax increase): It's a little hard to fault the county board members of Fond du Lac County who approved a .5% sales tax this week in order to fund an incentive package needed to compete with the package offered to Mercury by the city of Stillwater, Oklahoma in an effort to lure them there. While I don’t support any tax increase (and I won’t be voting on this one because Fond du Lac County is choosing to implement the .5% county sales tax they are already authorized in statute) this is at least a worthwhile use of tax dollars because they’re being used to save 5,900 jobs in Wisconsin .

The fault should lie with the union who acted irresponsibly during negotiations. These are tough economic times. While I'm sure it was hard to swallow the salary and benefit cuts originally proposed by the employer, having a job is definitely better than having no job. The economic ramifications of the Mercury plant pulling out of Wisconsin would have been devastating to our economy.

This is a perfect illustration of why economic development programs are so important to the state's economic health. I have long been an advocate of improving Wisconsin 's Department of Commerce economic development fund. A priority should be placed on keeping it well funded so we have the ability to quickly offer incentive packages for companies that want to come here and for those we need to keep here.

Governor Doyle’s RTA proposal and Rep. Mason’s income tax proposal will presumably be brought to the Legislature sometime this fall. I intend to oppose them because tax increases are simply not the right prescription for our ailing economy. They will only serve to make the situation worse.

State Representative Robin Vos State Capitol - Room 105 West - Post Office Box 8953 - Madison , Wisconsin 53708 Phone: (608) 266-9171 - Toll Free: (888) 534-0063 - Fax (608) 282-3663 Email: Rep.Vos@legis.wisconsin.gov On the Internet: Representative Vos' Web Site