October 22, 2014

Kind proposes tax breaks to keep jobs in America

U.S. Representative Ron Kind

U.S. Representative Ron Kind

Companies that keep jobs in the US could get a tax break, under a proposal from Wisconsin Congressman Ron Kind (D-WI).

The proposal would give companies that keep jobs in the country a 20 percent marginal tax rate, which Kind says is much lower than what they are currently receiving. He says it would reward job creators and “level the playing field so they can compete globally” and not have to consider moving product lines overseas to lower manufacturing costs.

Kind says he believes that “if you decide to stay here and create jobs here and make things here in America, you’re going to get a tax break for doing it.”
The proposal would pay for the manufacturing tax credit by eliminating loopholes Kind argues provide no economic benefit to the country, such as provisions he says currently reward companies that are moving jobs overseas.


WEDC partially lifts moratorium on historic tax credit program

WEDC Secretary Reed Hall

WEDC Secretary Reed Hall

The Wisconsin Economic Development Corporation is reviving tax breaks for some historic preservation projects, just three weeks after it put the program on hold.

WEDC halted the tax breaks, which were approved by lawmakers last year, after the awarded tax credits grew to $35 million. The figure was well above the initial estimated economic impact of $4 million for the first year of the program.

The governor and several lawmakers backed the move, saying the state should proceed with caution. Critics of the move argued WEDC should continue awarding the tax breaks though, because the projects they are encouraging have the potential to create hundreds or thousands of jobs.

WEDC Secretary and CEO Reed Hall says Monday’s decision will result in the agency awarding tax breaks to projects involving buildings that meet the standards of the State Historic Preservation Officer and the National Park Service of historic buildings. Hall says that process for Certified Historic Buildings “is very rigorous” and should result in the focus shifting to larger projects that have community and investor involvement behind them.

The moratorium will remain in place for buildings that do not have a historic designation. Hall says that should ensure the focus is on projects that can have the greatest economic impact, to balance out the reduction in state revenue. He says they will “try to determine, in a scientific way, the investment return to the state of Wisconsin.”

Hall says WEDC may consider asking the Legislature to make changes to the program next year.

At odds over Internet sales tax

Competing arguments on Internet sales taxes were in focus Monday. At a Capitol media briefing, Pete Sepp with the National Taxpayers Union said polling finds voters in Wisconsin strongly oppose out-of-state tax collection on the state’s online merchants.

The survey of 400 likely voters was conducted from June 3rd to the 5th, and found that Wisconsin residents opposed, by a 63 to 30 percent margin, the Marketplace Fairness Act. The federal legislation would allow revenue agencies in one state to collect internet sales taxes in another state.

Sepp said the prospect of additional revenues could be a double-edged sword for states. “Every state revenue department that thinks this is a good idea because suddenly revenues will come flowing back to their states, they need to realize this works 45 other ways,” he said, referring to the 45 states which currently collect sales taxes.

The U.S. Senate has passed the Marketplace Fairness Act, also known as e-fairness legislation, but the House has not acted on the measure. “Whether you sell on-line or, whether you sell as a brick and mortar outfit, you collect and submit the tax for where you are located,” said Sepp. “That’s fair, isn’t it?”

“We right now have a ridiculous tax policy that harms Wisconsin businesses,”said Alliance of Wisconsin Retailers executive director Scott Stenger. “It says we’re going to give a benefit to an out-of-state business that employs nobody (in Wisconsin), pays no taxes. We’re going to give them an advantage over a Wisconsin-based business that employs thousands of people and pays taxes. E-fairness legislation simply closes a tax loophole that allows out-of-state companies to avoid collecting sales tax – something the government forces all businesses in Wisconsin to do.”

Wisconsin’s tourism industry increases $700 million

Wisconsin Department of Tourism Secretary Stephanie Klett has a lot of numbers, and it’s all good.

“We have great news to report, and that is, Wisconsin Tourism is up $700 million from 2012 to 2013. So that’s a 4 percent increase. Our total visitor spending was $17.5 billion.”

Visitor growth last year was the fastest since 2010. A new study finds visits to the Badger State increased 3.5 percent in 2013 to more than 100 million.

Klett says Wisconsin attracts tourists from other states and across the globe, but many big spenders are right here in our own back yard. “Fifty-one percent of people who vacation in Wisconsin are from Wisconsin … and then 49 percent are coming from all across the world, literally.”

AUDIO: Klett explains how Wisconsin benefits from free publicity. :35

In order to make money, one has to spend money, that’s called a return on investment. For every $1 the agency spent on advertising last fall and summer, $6 was returned to the state in the form of tax revenue.

With a little creativity, advertising can be free. It’s called “earned media.” Klett explains, by reuniting the cast of airplane for the summer ad campaign, the state earned a lot of free publicity.

“Our earned media for that was $35 million. Our marketing budget is just $12.5 million. So, in 2013, we had $70 million of earned media when the average state gets $17 million.”

That commercial is scheduled to begin airing on TV the week of May 12th .

Wisconsin tourism supports nearly 185,000 jobs and $4.6 billion in personal income. Visitors generated $1.35 billion in state and local revenue last year, and $1 billion in federal taxes. Each household in Wisconsin would need to be taxed an extra $590 a year to replace those tourism taxes.

AUDIO: Jackie Johnson report 1:14

Tax Freedom Day in Wisconsin

It’s Tax Freedom Day in Wisconsin, the day on which Badger State taxpayers have collectively earned enough income to pay off their total federal, state, and local tax bill. Wisconsin is the 37th state to reach Tax Freedom Day. According to the annual report from the nonpartisan Tax Foundation, national Tax Freedom Day falls on April 21, three days later than last year.

The states with the earliest Tax Freedom Days are Louisiana (Mar 30), Mississippi (Apr 2), and South Dakota (Apr 4). The latest dates fall in New Jersey (May 9), Connecticut (May 9), and New York (May 4).

The study’s key findings include:

  •  The national Tax Freedom Day is three days later than last year due mainly to the continuing economic recovery, which will boost federal tax revenue collected through the corporate, payroll, and individual income tax.
  •  Americans will spend more on taxes in 2014 than they will on food, clothing, and housing combined.
  •  Americans will spend 42 days working to pay off income taxes, 15 days for excise taxes, and 11 days for property taxes.
  •  Americans will pay $3 trillion in federal taxes and $1.5 trillion in state and local taxes, for a total bill of more than $4.5 trillion, or 30.2 percent of the nation’s income.
  •  If you include annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur on May 6, 15 days later.

Tax Freedom Day is a significant date for taxpayers and lawmakers because it represents how long Americans as a whole have to work in order to pay the nation’s tax burden. Tax Foundation Economist Kyle Pomerleau said Tax Freedom Day provides “a vivid representation of how much we pay for the goods and services provided by governments at all levels.”

Historically, the date for Tax Freedom Day has fluctuated significantly. The latest-ever nationwide Tax Freedom Day was May 1, 2000. In 1900, Tax Freedom Day came on January 22.