Early this morning, while you were asleep, the legislature’s Joint Finance Committee, controlled by Democrats, was voting to increase your taxes.

The committee voted 11-5 to create a board that would have the power to impose a one percent sales tax in Milwaukee County. Sales tax revenue would fund transit, parks, and emergency medical services. Milwaukee County’s sales tax rate would, if this plan is approved by the full Legislature and Governor Doyle, increase to 6.6 percent.

The five members of the board that would set a one percent sales tax increase would not be elected by the voting public, and thus, would not have accountability for their actions. They would be appointed by the Milwaukee County Board chairman, the Milwaukee mayor and the governor.

The committee also voted 12-4 to establish a regional transit authority in Milwaukee, Racine and Kenosha counties. A $16 car rental fee would fund the authority. The current fee is $2. The authority would operate a Kenosha-Racine-Milwaukee commuter link that more than likely will be very costly. The nine-member authority, again, would be un-elected. Members would be appointed by the chairmen of the Milwaukee County and Racine County boards, the Kenosha County executive, the mayors of Milwaukee, Kenosha and Racine; and the governor.

As the Milwaukee Journal Sentinel reports, “The structure would ensure that local officials with Democratic ties would get to make appointments to the board while those with Republican links would not. For instance, Kenosha County Executive Jim Kreuser, a former legislator, would get to make an appointment while Milwaukee County Executive Scott Walker – a Republican running for governor next year – would not.”

The Joint Finance Committee also rejected the idea of a requirement that light rail could be built in Milwaukee County only if voters approved.

I oppose the creation of boards or authorities with appointed members having taxing power.  This is taxation without representation.  The power to tax should only come from elected representation.

Hang on to your wallets, there goes millions of dollars. I vehemently oppose these new taxes and Regional Authorities. Our taxes are high enough, and in our darkest hours while we were asleep, the Grim Reaper swiped our credit cards, big time. 

Here is the full report.

On April 1, 2009, the federal cigarette tax increased from 39 cents to $1.01 per pack, resulting in an increase of $6.3 billion according to the Tax Foundation in Washington D.C.

Increased tax revenue will be used for the federal State Children's Health Insurance program. However, there will be a corresponding reduction in the amount of disposable income of residents across America. In Wisconsin, the increase in federal cigarette taxes will be $117,357,576.

Fewer cigarettes will be sold. Cigarette purchases will drop by about 10 percent. 

The federal cigarette tax increase also impacts state and local government revenues. Revenue lost by state and local governments in Wisconsin resulting from the 62-cent federal cigarette t ax increase for Fiscal Year 2010 (July 1, 2009 - June 30, 2010) will be $70,919,000.

Governor Doyle’s proposed 75-cent cigarette tax increase would only make matters worse. Under Doyle’s proposed state budget, the state cigarette tax would increase to $2.52 a pack, causing Wisconsin to jump from the 15th highest state tax to the third behind only New York ($2.75) and New Jersey ($2.58). Wisconsin’s total tax, combined with the federal tax increase that went into effect this month would be $3.53.

Read more from the Tax Foundation.

For quite some time, Governor Doyle has embraced the idea of a so-called assessment on oil companies. The public knows quite well that is doublespeak for a tax, a tax that might be unconstitutional, and if enacted, would only be passed on to consumers at the gas pump. Editorial boards are blasting the idea:

The Milwaukee Journal Sentinel 

The Wisconsin State Journal 

The Racine Journal-Times 

The governor is now backing off a bit on his ill-advised oil tax scheme and is, instead, open to the idea of a three-cent increase in Wisconsin’s gas tax. 

Problem:

Wisconsin’s gas tax is already one of the highest in the country. The Tax Foundation in Washington D.C. reports Wisconsin's gasoline tax is variable and stands at 32.9 cents per gallon, the nation's 8th highest. 

We do not need an increase in the gas tax. Here is a thought. Maybe the governor should stop raiding the transportation fund and there would not be a need to discuss raising the gas tax.

Stateline reports the total of the budget gaps in all 50 states is now over $200 billion.

As a result, many states, including Wisconsin are making bad choices by increasing a number of taxes and fees.

Read more from Stateline.

This is not good.

The New York Times writes that Special Inspector General Neil Barofksy issued an eye-opening report Tuesday that the price tag for TARP (Troubled Asset Relief Program) has ballooned from $700 billion to $3 TRILLION.

The report describes the bailout program as one of “unprecedented scope, scale and complexity.”  It also warns that there is too little oversight, and too little information about how tax money is being spent.

This opens the door for widespread fraud.

You can read more details in the New York Times.

All last week, I blogged about the findings of the Tax Foundation’s 2009 nationwide survey on attitudes of American taxpayers.

Former senior adviser to President George W. Bush, Karl Rove writes in the Wall Street Journal, “It hasn't gotten a ton of attention, but people are fed up with the complexity of their tax code and ready to do something about it.”

Rove is correct. The Tax Foundation conducted its survey between February 18 and 27, 2009 among 2,002 adults (aged 18 or older). One of the questions the Tax Foundation asked respondents was about tax complexity:

“How complex do you think the current federal income tax is?”

The response was a record for the Tax Foundation as 85 percent say the federal income tax is very complex or somewhat complex, up from 83 percent during the tax Foundation’s last nationwide survey conducted during 2007. Only 1 percent say that federal taxes are not complex at all, and 8 percent say they’re “not too complex.”

A subsequent question asked if Congress should reform the federal tax code. Again, it was a record response with 82 percent saying, “It should be completely overhauled” or “It needs major changes.” That is up from 78 percent during 2007. Another 12 percent say that “it needs minor changes” and only two percent say “it is fine the way it is.”

The Philadelphia Bulletin wrote last week:

“One of the most obvious reasons to reform the current tax code is its sheer complexity. The code is over 60,000 pages and includes more than 1,100 forms and supplemental publications. Experts estimate that the total time Americans spend to file all of their paperwork is 6.6 billion hours. Many pay hundreds of dollars annually to pay tax professionals to file their returns, and businesses pay even more. ‘The present tax code is about 10 times longer than the Bible, a lot more complicated, and, unlike the Bible, contains no good news,’ joked former Sen. Don Nickles.”

Here is the complete report on the Tax Foundation 2009 survey.

According to Stateline, the Obama administration has given its approval to $6.5 billion of the $27.5 billion in federal stimulus funding for highways and bridges.

Which state leads the way in number of projects and amount of federal funding?

Is it New York?

California?

Texas?

Alaska?

Wisconsin??!!!

Are you kidding?

The correct answer is…..are you sitting down?

ILLINOIS!

Illinois has 249 approved projects and over $606 million in federal funding.

Wisconsin has 43 approved projects and just under $129 million in federal funding.

Stateline reports, “Obama and Transportation Secretary Ray LaHood both represented Illinois on Capitol Hill, but the administration says favoritism didn’t play a role in the state's landing the lion’s share of the projects and funding so far.”

The nonpartisan Tax Foundation in Washington D.C. has just released the results of its 2009 nationwide survey on attitudes of American taxpayers. The survey was conducted between February 18 and 27, 2009 among 2,002 adults (aged 18 or older).

For the first time, this question was posed to taxpayers:

“Currently, most state governments raise revenue through government-run gambling operations, such as lotteries, keno games and video lottery terminals (which offer casino- type games such as poker, blackjack and slots), for the purpose of general government spending. In general, do you favor or oppose such government-run gambling operations?”

Here are the results:

27 percent: somewhat supportive

26 percent: strongly supportive

12 percent: strongly oppose

10 percent: somewhat opposed

I am not surprised that over half of the respondents approve of state-run lotteries. The Tax Foundation reports, “State-run lotteries are the most popular form of commercial gambling in the U.S., with half or more Americans participating in any given year. In 2008, total consumer spending on lotteries was over $60 billion – or $199 per capita– and in 2004 the average American spent more money on lotteries than on reading materials and movie theater tickets combined.”

During June 2008, I blogged that most states, including Wisconsin, are hooked on gambling. 

However, I have to wonder what the results of the Tax Foundation survey might have been if there had been a follow-up to their single, very general question about lotteries. For example, what if the Tax Foundation had added a second question like this:

“Would you favor or oppose government-run gambling operations if the social costs associated with this type of gambling exceeded government-run gambling -related tax relief?”

There are tremendous costs to the families of troubled gamblers. There are financial loses. Serious problem gamblers lose or quit their jobs, steal money to support their gambling habit, think about and actually plan suicide, and some even make suicide attempts. Children of problem gamblers develop behavior and adjustment problems suffering from depression, anxiety, and cynicism.

A Wisconsin Policy Research Institute study in 1996 reported the average serious problem gambler imposed costs close to $10,000 upon Wisconsin each year with a total annual social cost impact of over $307 million. That was during 1996. The number of problem gamblers has increased since, so the societal cost has also increased.

A July 2008 audit of the Wisconsin lottery by the Legislative Audit Bureau found that property tax relief totaled $697.9 million over the past five fiscal years, including $160.0 million in 2006-07.

Social cost of gambling: over $307 million/yr

Property tax relief for the latest year available: $160 million

The social costs far outweigh the gain in property tax relief. However, the state gambling genie is out of the bottle and will probably never return.

My blog of January 27, 2009, “Congress does not have the magic wand to help the states,” reported several forecasts that the huge federal stimulus package would not solve the budget crises afflicting all 50 states. We now have hard, cold evidence, at least from one state, that those predictions are true.

New York is the first state to approve a state budget that uses federal economic stimulus money, and look at what has happened. New York accepted its entire stimulus allotment, approximately $7.2 billion. Despite the newfound pot of money, New York raised taxes and layoffs are planned by the state and at schools, local governments, and hospitals.

New York’s budget deficit during January 2009 was $13.7 billion. Stateline reports, “New York’s latest official forecast is for an out-year deficit of $11 billion.”

If New York is any indication, the stimulus package only makes fiscal matters worse for the states.

Read more in Stateline.

When it comes to Americans’ views about taxes, there is a stark contrast between political parties and ideologies.

The nonpartisan Tax Foundation in Washington D.C. has just released the results of its 2009 nationwide survey on attitudes of American taxpayers. The survey was conducted between February 18 and 27, 2009 among 2,002 adults (aged 18 or older).

This year, the Tax Foundation for the first time asked respondents to give their party affiliation from four choices: Republican, Democrat, Independent and Other.  Respondents were also asked to identify their political philosophy: conservative, moderate and liberal.

You will note the difference of opinion from the answers given by the various groups.

Tax Burdens

Republicans are more inclined to believe their federal income tax bill is too high, 61 percent, than Democrats, 51 percent. Independents are at 61 percent.

Two-thirds, 66 percent of conservatives say their federal income tax is too high, moderates, 55 percent, liberals, 44 percent. A slightly higher percentage of liberals, 45 percent believe their income tax bills are just right.

What about the maximum percentage of income that should go to all taxes?

Democrats say 17 percent, Republicans, 14.4 percent, Independents, 14.8 percent. The average percentage for liberals was 18.9 percent, moderates, 15.1 percent, conservatives, 14.4 percent.

Government Services and Spending

Respondents were asked how much they would be willing to pay in a year for all government services.

Republicans would pay an average of $9,985, Democrats, $7,616, Independents, $5,805, moderates, $8,171, liberals, $7,714 and conservatives, $6,668.

Republicans, 46 percent, and Independents, 42 percent, are more likely to support a decrease in services and lower taxes than keeping taxes and services where they are (35 percent for Republicans, 29 percent for Independents).

For Democrats, the numbers are much different, with 44 percent wanting to keep taxes and services where they are, and 21 percent wanting to decrease services and taxes.

More liberals, 35 percent, and moderates, 42 percent want to keep services and taxes where they are than want to decrease services and taxes (23 percent, liberals, 27 percent, moderates).

Over half, 54 percent of conservatives support a decrease in services and taxes, 27 percent want to keep taxes and services where they are.

What about increasing services and raising taxes?

Democrats are more likely to want to do both at 16 percent than Independents, 12 percent, and Republicans, two percent, liberals, 23 percent, moderates, 10 percent, and conservatives, three percent.

Tax Deductions and the Estate Tax

Respondents were asked if they would be willing to sacrifice some deductions in return for an across the board cut in federal income tax rates.

Republicans were more likely to be in support, 51 percent than Democrats, 40 percent and Independents, 45 percent.

More conservatives like the idea, 51 percent than liberals, 40 percent, and moderates, 41 percent.

Respondents were asked if they support the total elimination of the estate tax. Republicans overwhelmingly said yes, 79 percent compared to Democrats, 55 percent. Independents came in at 74 percent.  Support among conservatives was 81 percent, liberals, 50 percent, moderates, 65 percent.

Fairness of “Non-Payers” and Wealth Redistribution

Respondents were asked if it is fair or unfair that millions of filers have no federal income tax liability after credits and deductions.Three-fourths, 75 percent of Republicans said all should be required to pay some minimum amount of tax compared to 63 percent of Democrats and 65 percent of Independents, 75 percent of conservatives, 49 percent of liberals, and 67 percent of moderates.

Democrats, 74 percent, and Independents, 53 percent like the idea of higher tax rates for higher wage-earners while 58 percent of Republicans oppose. Liberals, 74 percent, and moderates, 60 percent, support the idea, and 57 percent of conservatives oppose.

The nonpartisan Tax Foundation in Washington D.C. has just released the results of its 2009 nationwide survey on attitudes of American taxpayers. The survey was conducted between February 18 and 27, 2009 among 2,002 adults (aged 18 or older).

As part of the survey, taxpayers were asked if they would be willing, in order to balance the budget, to pay their share of the federal budget deficit. The last time the Tax Foundation conducted this survey during 2007, the figure was $1,789 per individual tax return. This year, due to the federal bailouts, the Troubled Asset Relief Program (TARP), stimulus spending and fiscal year 2009 omnibus spending bills, that figure has increased significantly, 392 percent, to $8,798 per individual tax return.

Care to guess what percentage of American taxpayers admitted they were willing to pay $8,798 in order to help balance the federal budget deficit? Try six percent with 81 percent unwilling, and 12 percent unsure.

The Tax Foundation asked those willing to pay $8,798 an additional question: “If you paid that extra $8,798 in additional taxes, how do you believe today’s Congress would use it?”

About half, 48 percent said the government would use the money to increase spending and not pay off the deficit, and 17 percent believed the government would use the money to pay off the entire deficit. About one-third, 32 percent thought the government would pay off a portion of the deficit and use the rest of the money to increase spending.

I am not surprised American taxpayers are unwilling to pay a huge chunk to fix the budget boondoggle Washington created and proliferated, and that they lack the confidence that Washington would fix the deficit even with the ability to do so.

The nation’s #1 expert on taxes, the nonpartisan Tax Foundation in Washington D.C., has released a new report on American attitudes about several tax issues based on a recent nationwide survey. The Tax Foundation finds that tax complexity, tax fairness, and tax burdens remain areas of concern for American taxpayers.

Not surprisingly, 56 percent believe the amount of federal income taxes paid is too high while 33 percent believe the amount is just right. Yes, there is a percentage of Americans that claims taxes are too low: two percent.

Taxpayers living in the Great Lakes region are most likely to say their federal income taxes are too high, 61 percent. Also most likely to make this claim are those aged 45-54 (67 percent), those earning between $35,000 and $50,000 (63 percent), those earning $75,000 and above (62 percent), and married couples (60 percent).

When asked, “What is the maximum percentage of a person’s income that should go to taxes – that is, all taxes, state, federal and local?” the average response is 15.6 percent.  The average adult with a high school diploma supports a low average tax rate of 12.6 percent.  The average adult with a graduate degree or more supports a high average tax rate of 22.9 percent. However, the key point to ponder, as the Tax Foundation emphasizes, is that the nation’s actual average total tax burden is 28.2 percent of income.

The Tax Foundation asked Americans how much they would be willing to pay for every government service they use in a year. The average figure given is $7,635.The average male adult is willing to shell out just over $9,500 for all government services. The average female adult is a lot thriftier, only willing to pay about $5,700.  Taxpayers in the Farm Belt would be willing to pay just over $2,700 for government services while those who live on the Pacific Coast would be willing to pay just over $10,000. Compare these figures with overall government spending. The Tax Foundation says during fiscal year 2006, total spending from federal, state and local governments amounted to over $4.7 trillion, or nearly $16,000 per capita.

Conclusion: the federal government is taxing far more than most taxpayers are willing to pay.  Those with taxing authority in Washington place more value on government services than taxpayers do.

So, should government do more or less? Two years, the last time the Tax Foundation conducted its tax survey, 41 percent of adults thought that taxes and services should be kept about where they were. Today, only 36 percent feel that way. During 2007, 32 percent said the federal government should decrease services and lower taxes. Today, 34 percent want to see services decreased and taxes lowered. Are you paying attention, Washington?

On the issue of tax fairness, respondents said that at the federal level, the estate tax was the least fair, followed by the gas tax, federal income taxes and corporate income taxes, and Social Security payroll taxes.  At the state and local level, the gas tax is considered the least fair followed by local property taxes, motor vehicle taxes, state income taxes, retail sales taxes, and cigarette, beer and wine taxes. 

A record 85 percent say the federal income tax is very complex or somewhat complex. Only 1 percent of respondents say that federal taxes are not complex at all, and 8 percent say they’re “not too complex.” A record 82 percent say the federal tax code should be completely overhauled.

Major tax and fiscal issues are under review by the White House and Congress. Washington officials would be wise to seriously consider the prevailing attitudes of those who pay the bills.

MSN Money has an interactive map showing where the states rank on gasoline, cigarette, beer and sales taxes. On three of the four Wisconsin has some of the highest taxes in the nation.

MSN Money predicts there will be a push in many states to increase the so-called “sin” taxes to address budget shortfalls. As MSN Money puts it, “no matter where you live, expect to start paying more.”

You can read more here.

Tax Freedom Day is the day Americans will have earned enough money to pay this year’s tax obligations at the federal, state and local levels.

Tax Freedom Day in Wisconsin will also fall on April 13, 2009.  That compares to last year’s Tax Freedom day of April 21, 2008.

If that sounds like good news, it depends on your view. Wisconsin’s 2008 Tax Freedom Day was the 14^th worst in the country. This year’s Tax Freedom Day is the 12^th worst of all the states.