MADISON — If you’re going for sexy, a 10 is where you want to land.
Ranking 10th on the list of the highest tax states, however, is not so hot for taxpayers.
That’s where Wisconsin stands — or stood — according to the most recent U.S. Census data, which tracks 2008-09 state revenue.
While tax trackers don’t have more up-to-date numbers, they say the Badger State likely has remained in the top 10 on the tax burden charts in the intervening years, thanks to big tax hikes in 2009-10 and inertia in removing those increases since.
Wisconsin finished just ahead of New Jersey on the list of highest state and local tax burden, according to a report from Wisconsin’s nonpartisan Legislative Fiscal Bureau, which broke down the Census figures.
Wisconsin taxpayers, on average, paid $112.04 per $1,000 of personal income in state and local taxes in fiscal 2008-09. Alaska taxpayers paid the highest, at $206.39 per $1,000. South Dakota posted the lowest tax burden at $79.30.
The national average was $102.10 per $1,000 of personal income.
Per capita, Wisconsin ranked 16th, with taxpayers paying $4,255.40 to local and state coffers.
The state checks in at No. 11 in the amount of individual local and state income taxes, with the average Wisconsin taxpayer chipping in $27.73 per $1,000 of income.
Rob Reinhardt, program supervisor for the fiscal bureau, which provides research to the Legislature, said Wisconsin’s higher tax burden is the consequence of policy choices, historically low returns on federal tax dollars and a reluctance to shift the cost of government from taxes to fees.
Taxpayers shouldn’t expect much relief in their top 10 ranking when the 2010-11 figures come out later this year.
Then-Gov. Jim Doyle, a Democrat, presided over a 2010-11 budget that significantly raised taxes on businesses, upped the top income tax bracket and raised the hospital tax by 9.5 percent
In fiscal 2008-09, Wisconsin ranked 1oth in property taxes paid at $42.88 for every $1,000 of personal income.
But that’s only part of the Badger State’s tax burden, and the Republican-controlled Legislature didn’t “walk back any of the Doyle tax increases,” said Dale Knapp, research director of the nonpartisan Wisconsin Taxpayers Alliance.
“For the first couple of years under Gov. Walker, I wouldn’t expect to see a big shift in the tax burden,” Knapp said.
But rankings are dependent on what others do, and many states jacked up taxes when the worst recession in generations hit in 2008 and 2009. By comparison, Wisconsin could fare well in tax burden or it could slip, depending on tax policies in other states.
While Wisconsin’s tax burden ranks on the high end, the Badger State runs near the middle of the pack in corporate taxes spending, according to the Census Bureau.
And the state ranks 23rd in local and state expenditures, spending $244.70 for every $1,000 of personal income.
The burden is a good deal lighter for Wisconsin taxpayers compared with a generation ago, Knapp and Reinhardt said.
Wisconsin once lived in the top five of highest tax burdened states, ranking in the third slot in 1999.
When Wisconsin joined a throng of other states in re-indexing income tax rates to account for inflation, taxpayers began seeing some easing.
Property tax levy limits also have held increases in check.
By 2006-07, Wisconsin’s state and local tax burden ranking dropped to 14th.
A special legislative committee is addressing potential changes to Wisconsin’s income tax codes, mired by a patchwork of laws, Knapp said.
Whether there will be a move to refine or lower rates ultimately depends on the November election and who controls lawmaking power, if history is any indicator, Knapp said.
Republicans have been more inclined to slice tax rates, Democrats not so much.
Knapp isn’t banking on the Badger State ever topping the low-tax state list.
While federal stimulus dollars temporarily changed Wisconsin’s “donor state” status, or those states that pay into the federal government more than they receive, Knapp said the end of stimulus probably means Wisconsin will be back in its accustomed position.
“When you get less federal money than other states do and you want to continue to provide services, that puts more pressure on local taxpayers,” Knapp said.
Basically, Wisconsin taxpayers may have to settle for being a 17.
Contact M.D. Kittle at WisconsinReporter.com