Governor Jim Doyle signed the Wisconsin state budget into law on June 29 (news release), and in doing so agreed to higher taxes that will discourage business investment and job creation in the state. It’s a tough go for manufacturers in the Badger State, so maybe they’ll just go.
But first, one good thing, a topic we’ve written about repeatedly, the trial-lawyer backed effort to improve their cash flow by restoring full joint-and-several liability. The Governor included that delicious political treat in his budget, but wiser legislators of both parties killed it. As David Bretting, President and CEO, C.G. Bretting Manufacturing Co., Inc., wrote in an op-ed, “Wisconsin Dodges Liability Bullet – For Now,” “With our state’s economy struggling, one of the last things employers need is an expansion of liability, especially in the area of product liability.”
Bretting notes that Michigan and Indiana never apply joint and several liability, so no defendant is ever a deep pocket in those states. A change in Wisconsin’s law — and it’s still a priority for the legal lobbyists — would make those other states more attractive as homes to business.
Which brings us to this headline on an op-ed by Jeff Schoepke, diretor of tax and corporate politcy for Wisconsin Manufacturers & Commerce, “Taxpayers Can — and Will — Vote with their Feet.”
The budget recently signed by Governor Doyle creates a new top income tax bracket, increasing taxes by more than $285 million on those making over $300,000. Without question, the Governor chose this tax because it raised the maximum amount of revenue for a minimum amount of political backlash.
But is it good for Wisconsin? This new top rate will give Wisconsin the 11th highest in the nation. And, the Tax Foundation’s State Business Tax Climate Index ranks Wisconsin’s individual income tax 7th worst in the nation as it relates to business climate.
Sounds familiar, almost like it’s a strategy being tried in other states or at the federal level.
And from The Milwaukee Journal-Sentinel, “Business leaders decry tax increases in state budget“:
While providing a welcome boost to high-tech entrepreneurship, Wisconsin’s new budget on the whole solidifies the perception of the state as a tax-happy, business-unfriendly place, company owners and leaders of business groups say.
They credit the Legislature and Gov. Doyle for increasing incentives that already are luring promising young firms to Wisconsin. But those positives, they say, are far outweighed by such things as a bump in the personal tax rate on the highest earners and what amounts to a hefty increase in capital gains taxes.
“They’ve sure given a lot of people the impetus to get the hell out of here,” business owner Michael L. Hansen said.
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