Unnecessary Constitutional Amendment Would Limit Budget Options

Thursday, January 23, 2014 at 2:17 PM by

A proposed amendment to the Wisconsin Constitution amendment limits budget options without offering any meaningful advantages in return, according to a new analysis from the Wisconsin Budget Project.

Under the amendment, a two-thirds majority of both houses of the Legislature would be required to pass an increase in the rate of the state individual income tax, corporate income tax, or sales tax. A supermajority vote would not be required to increase the gas tax or increase fees.

Supporters argue that supermajority requirements keep state taxes lower than they otherwise would be. However, history shows this not to be the case. Tax increases are extremely rare in Wisconsin. The sales tax and corporate income tax rates have not been raised in 32 years. The only increase in the individual income tax rate in the last 28 years, which took place in 2009, affected only about one out of every hundred tax filers.

Meanwhile, the share of their income that Wisconsin residents pay in income tax, corporate income tax, and sales tax — the taxes covered by the proposed amendment — has declined in the last 15 years. In 2013, these three taxes accounted for 5.1% of state personal income, down from a peak of 6.6% in 2000, as shown in the chart below.

Taxes-Already-Flat-for-website

The supermajority amendment would not do much to keep taxes down, and it would be problematic on a number of other fronts. It would tie legislators’ hands during future budget crises. It would make real tax reform, involving shifting a portion of the tax burden from one group to another, extremely difficult. And it could force lawmakers to make painful spending cuts that are opposed by the people of the state and likely to harm our economy.

Read more about the proposed supermajority amendment here.

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