The dirty little secret of Wisconsin politics is that taxes on business are very low. That is one reason property taxes are so high on residents — to make up the difference. Companies also get a sweet deal on corporate income taxes. A recent analysis by the Institute for Wisconsin’s Future found two-thirds of Wisconsin […]
The dirty little secret of Wisconsin politics is that taxes on business are very low. That is one reason property taxes are so high on residents — to make up the difference.
Companies also get a sweet deal on corporate income taxes. A recent analysis by the Institute for Wisconsin’s Future found two-thirds of Wisconsin companies paid not one dollar in corporate income tax in 2003. It’s a stunning finding that generated headlines across the state, except in Milwaukee, where the Journal Sentinel buried the story on page three of the business section. Ironically, the research was done by Jack Norman, a former Journal Sentinel business reporter.
The Institute is a liberal group started as a counterweight to the conservative Wisconsin Policy Research Institute. Both groups can bring a slant to their findings, but the old Milwaukee Sentinel typically ran front-page stories on the conservative group’s research, and that practice continued after the Sentinel’s merger with the Milwaukee Journal. The liberals haven’t been so lionized.
The idea that the state’s business tax burden is low wouldn’t surprise anyone who’s followed the issue closely. As Forward Wisconsin, the state’s business recruitment organization puts it, “Wisconsin’s business taxes are among the lowest in the country.”
PR fluff? Ernst & Young, the huge accounting firm, publishes an annual review of state and local taxes on business and found 32 states have higher taxes on business than Wisconsin. Don’t believe that? The Federal Reserve Bank of Boston did a national study which found 35 states have higher taxes on business than Wisconsin.
The Journal Sentinel gave front page business section coverage to a 2004 study by the Tax Foundation which showed Wisconsin has the ninth highest taxes on business in the country. But the study did not include property taxes, and businesses in Wisconsin get a long list of exemptions, including one on machinery and equipment (some $12 billion in property is exempted), on computers (worth $3 billion) and on manufacturing inventory. Scott Moody, the Tax Foundation’s senior economist, conceded in a JS story I did in 2004 that the study might have found Wisconsin had a low business tax burden if all taxes had been included.
As the legislature has added more and more property exemptions for businesses, the burden has been shifted ever more to residents, giving them higher property taxes to pay.
Yet many still think business taxes are high, largely because the Wisconsin Manufacturers and Commerce hammers that message repeatedly. The WMC is the top spending lobbyist in Wisconsin and is constantly pushing the legislature to lower business taxes. Its president, James Haney, recently suggested legislators should completely eliminate the corporate income tax. And while you’re at it, could you please eliminate my property tax?
The WMC, of course, castigated Norman’s analysis. The group said corporate profits were lower in 2003, which would help explain why companies paid lower taxes. But an analysis of top companies in Wisconsin Norman also conducted suggested companies actually paid about the same taxes in 2003 as in 2004.
The study’s central point, moreover, hasn’t been denied because the figure came straight from the state Department of Revenue: of 54,644 business entities, 67 percent paid nothing in corporate income taxes in 2003. Amazing.
The result buttresses reports showing companies are finding more ways to evade taxes. The state Department of Revenue has estimated that more than 80 percent of Wisconsin banks have established subsidiaries in Nevada, presumably so they can register to pay their taxes in a state with no corporate income tax.
Finally comes this figure from the Federation of Tax Administrators, a national organization of state tax officials: the corporate income tax accounted for just 3 percent of all state and local tax revenue collected in Wisconsin in 2004. If you’re a business, the Badger State is a pretty boffo place to be.
Asleep on the Art Museum
The Calatrava addition to the Milwaukee Art Museum has become a symbol for the city and has inevitably heightened its importance. So why is the Journal Sentinel so scanty in its coverage of the museum’s Biedermeier show? Last Thursday, the newspaper finally got around to noting all the fabulous press the show has been getting nationally, including favorable mention in about 20 different publications. Doubtless the most important was a glowing review in The New York Times by Roberta Smith that came out on November 30, which JS readers were finally told about on December 14. The JS story also quoted from a December Art in America review that probably came out in mid-November.
The late James Auer, the paper’s longtime art critic, would never have been so neglectful. He did a Sunday column where he touted this kind of information as it came out, thus serving readers while helping an important local institution get an audience for a worthy show that has doubtless been tough to sell.
His successor, Mary Louise Schumacher, in her story finally noting “the Biedermeier buzz,” quotes MAM director David Gordon at the end of the story lamenting that he worries Milwaukeeans “will wake up about this…when it’s gone.”
Indeed. The show closes on January 1, so the museum (and readers) needed this information much sooner, not two weeks before the show closes. Why the delay, and will the paper’s under-coverage hurt the museum?
I emailed MAM director Gordon with this question. His answer: “I can’t possibly comment……………” A very long and meaningful ellipsis.
Note: With a nod to the season, there will be no column for the next two weeks. Happy holidays to all.
And don’t miss the Dish on Dining by restaurant critic Ann Christenson.