Wisconsin Corporations Shift Tax Climate

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Every time a new tax or increase on corporate profits is proposed in Wisconsin - Republicans, conservatives and their media enablers are the first ones to oppose it primarily on the claim that the tax will hurt consumers, seniors or the poor. Our local newspapers, chambers of commerce and republican politicians repeat this over and over again, they should know.

Wisconsin Falls In Business Rank:
Wisconsin fell three places, to No. 39, in the annual ranking of state business tax climates published Tuesday by a conservative Washington policy research organization.

I don’t know what methodology the WTA or the Tax Foundation use to separate or define portions of corporate tax paid to the state collected from corporations embedding their tax burden into the price of goods or services they provide. I don’t believe the formulae exists. They all pay the same Federal taxes. In other words, corporations don’t pay state taxes – AT ALL. Their customers pay it. That’s why Wisconsin is consistently ranked in the top ten worst for individual tax burden. While each state has different taxing mechanisms to lift the burden off of individuals, corporations for the most part use the same tactics to unload their burden. But consumers aren’t the only ones who pay the taxes for corporations, their workers also take a hit with lower wages. Wisconsin is not known for high wages.

Now, some may say this is a perfect reason why corporate taxes should be abolished or lowered, but that's not the issue. Some states with a much lower corporate tax burden on the books actually have poor economies. The issue is the state needs money to operate without increasing the tax burden on individuals. So how can the state collect a fair tax on corporate profits without the corporation shifting the burden to their customer?

Tax Foundation Excerpt:
If taxes take a larger portion of profits, that cost is passed along to either consumers (through higher prices), workers (through lower wages or fewer jobs), or shareholders (through lower dividends or share value).

For one thing and you better believe it, corporations will not allow a cut in profits because of a state tax. It just won’t happen – not now or ever if they can help it. But I don’t believe the last part (about dividends) of their statement. Over the years, this problem has gotten worse primarily because businesses are no longer beholden to their employees (revolving door) or customers (when was the last time you heard a customer is always right). The CEO’s and their officers are judged ultimately by the return of dividends paid to the shareholders. In large corporations, workers are fully expendable, and believe it or not, so are customers if there is a large enough population.

Wisconsin residents should be outraged when politicians defend corporations. Legislators should be working night and day creating policies defending income taxpayers, property owners and consumers from tactics employed by these "shifty" corporations.

If the WTA or the Tax Foundation have a system which accurately measures the state tax burden on corporate profits like their charts and graphs portray, exclusive from receipts charged to customers - Gov. Doyle should look into it.

No - the whole world should look into it.

But if their business ranking report lacks this minor detail - they should file the entire 64 page report under the letter "G" and start over.