Wisconsin’s state and local tax system is failing on three fronts:

» It is unfair because the burden is increasingly falling on low- and middle-income wage-earning homeowners. A combination of exemptions, loopholes and inflation has destroyed the fairness of the system.
» It is inadequate to meet the needs of state and local units of government. Too many important programs—from public schools to public transportation to public health to public safety—are suffering from budget shortfalls.
»It is out-of-date by failing to keep up with changes in the economy. Advanced corporate tax-avoidance techniques have not prompted corporate income tax reform. The emergence of the service sector and internet retail has not led to sales tax reform. Growing loopholes and exemptions have not led to property tax reform.

IWF is working to correct these failings. Our work focuses on the following issues:

»Overall tax level in Wisconsin
»Corporate taxes
»Sales taxes
»Property taxes
»Income taxes
»State and local government budgets
»Tax incidence: Who pays taxes?
»Fair and Adequate: IWF’s monthly newsletter on state and local tax issues

Tax issues details: Overall tax level in Wisconsin

IWF’s report, Exposing the Wisconsin ‘Tax Hell’ Hoax: Why spending caps on state and local government are wrong for Wisconsin, examines myths about Wisconsin tax levels.

Other studies of overall tax levels can be found in many documents listed below, especially in the section on Corporate taxes.

Corporate taxes

IWF’s recent report, Wisconsin’s Revenue Gap: An analysis of corporate tax avoidance, discusses corporate income tax trends and practice and shows Wisconsin lost $643 million in 2006 through loopholes and credits.

Combined reporting is an important tax reform that would close many corporate tax loopholes. See IWF’s testimony in support of SB510, a bill that would enact combined reporting.

Corporate tax disclosure would require public companies to tell the public how much they pay in corporate income tax and what techniques they use to avoid taxes. Read about SB367, the Corporate Tax Accountability Act, and the support it’s attracted.

Overall business taxes in Wisconsin are among the lowest in the nation. For details, see IWF’s report: Broken Partnership: How Wisconsin’s corporate sector underpays state and local taxes by $1 billion.

View a 5-minute video version an IWF presentation on the truth about corporate taxes in Wisconsin.

Wisconsin’s taxes are the subject of many myths. See some exposed in Jack Norman’s cover story for Isthmus, the Madison paper: “Are Wisconsin’s Taxes Too High?”

State and local government budgets

The slowing economy is threatening state and local tax receipts. But the response should be stepped-up efforts to find alternative revenues, not cuts in vital services. See a letter to Governor Doyle urging the implementation of a hospital tax, the cancellation of the end of the estate tax, and the closing of tax loopholes.

Tax incidence: Who pays taxes?

Wisconsin’s Department of Revenue released a detailed Wisconsin Tax Incidence Report in 2004. It is an economic analysis of how state and local taxes are passed on to various income groups.

For an IWF overview of its main results, including the surprising conclusion that low-income married homeowners have the highest tax burden in the state, see the report: Buyer Beware: Low-income homeowners penalized under the Wisconsin tax system—Policy implications of the Wisconsin Tax Incidence Study.

Fair and Adequate

Click here for copies of IWF’s monthly tax newsletter.

[Back to top]