State Senate Republicans say the budget passed in that chamber last night is a jobs killer. The centerpiece of the Senate passed budget plan, a proposal from Democrats to increase the capital gains tax by nearly a half billion dollars in lieu of a franchise fee on oil companies, is like an anvil dropped on the heads of the state's investors and small businesses, according to state Senator Ted Kanavas.
"What are you telling all of these people that are out there hoping and praying that some how, some way, they're going to get the capital they need to make an enterprise go? What are you saying to them? What you're saying to them is very simple," Kanavas said. "You're saying don't do it here." Kanavas said the capital gains tax would hurt Wisconsin in competition for jobs with Minnesota, Illinois and other states.
State Senator Alberta Darling was even more critical of the budget plan from Senate Democrats. Darling said it's even worse than the budget from the Joint Finance Committee. "What we're doing to the state is, we're killing the state," said Darling. "It's a very, very dark day in the state when you can look at this package and say this is a good budget for growing the economy, for jobs," said Darling. "It is not."
Kanavas predicted that, if adopted as part of a final budget package, the increase in the capital gains tax will further deepen the state's structural budget deficit.
"What you're doing us you're saying capital gains will not be reinvested in small companies, which means less jobs. Less jobs means less income tax, which means less sales tax, which means less property tax, 'cause nobody's going to be buying properties, and suddenly you're going to be in a position where two years you have nothing."
The capital gains tax hike is not a done deal: a conference committee must still work out differences between the Senate and Assembly versions of the budget.
