Rick’s Tax Mix Nixed (Too Quick?)

Tuesday, November 30, 2010 at 10:45 PM by

Regressive Tax Swap Idea Dies a Speedy Death; Why Don’t I Feel Happy?

At a public forum last week, Rick Chandler, a member of the Governor-elect’s transition team, floated the idea of increasing the sales tax by at least two cents – as part of a plan to pay for significant reductions in income and property taxes. Within less than 24 hours the idea had been trashed by liberals and conservatives, and most importantly by the Governor-elect, and it was declared dead almost before the public even got wind of the proposal.

Because such a change would result in a substantial shift in taxes to lower income Wisconsinites, I wrote a critical op-ed column a couple of months ago, soon after the general idea first surfaced. So perhaps I ought to be celebrating the proposal’s speedy demise, but instead I’m concerned that any idea to raise a tax, even as part of a revenue-neutral proposal, is immediately denounced, before there’s a chance to examine the proposal’s merits and debate it in a rational way.

The proposal in question was floated at a breakfast meeting of the conservative Wisconsin Policy Research Institute (WPRI).  It was offered by Richard Chandler, a prominent member of the transition team who served as the State Budget Director from 1987 to 2001 and as Secretary of the Department of Revenue during the McCallum administration.

As Mike Ivey reported in a Capital Times article, Chandler said at the November 22 meeting that, “The idea here is to shift the burden to taxes that are less hated,” and he argued that doing so would create jobs in Wisconsin. Chandler also made it clear that the idea stemmed from WPRI’s “Refocus Wisconsin” project, and he wasn’t speaking for the Governor-elect.

In a mid-September column in the Milwaukee Journal Sentinel, Chandler argued for a tax swap of the sort he proposed last week, and he contended that state policymakers should stop being concerned about trying to have a progressive tax system. My op-ed in the Journal Sentinel took exception to the argument that progressivity shouldn’t be one of the goals of proposals to reform or modernize the tax system.

On Tuesday of last week, the Milwaukee Journal Sentinel reported that the Governor-elect had unequivocally declared that he would not entertain the idea of raising any taxes.

Even though I agree with the criticism from progressives of the proposed tax swap plan, I’m sorry to see it shot down almost instantly – before most of the media had even reported that it had been proposed. I think elected and unelected officials ought to be able to make serious proposals to shift or reform taxes and should then be able to engage the public and policymakers in a reasoned debate about the merits of those proposals. I worry that the knee jerk nature of some of the response to the plan reflects a continuation of the type of politics that helped create Wisconsin’s current fiscal problems and thwarts efforts to resolve them.

Jon Peacock

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