More taxing thoughts

First, read this excellent report by Scot Ross and the folks at the Institute for Wisconsin's Future. The whole thing is a great study, but a few key takeaways.

The many property tax exemptions for businesses means normal residential taxpayers have to pay more of it, as part of it notes "nationwide, the average share that the business sector pays toward property taxes is 40% of the total property tax revenues.17 In Wisconsin however, the share that the business sector pays is only 24.4%." The upshot is that property taxes hit lower and middle income people hard. "As a percent of income, the bottom 20% of Wisconsin taxpayers pay 76% more [property tax] than the wealthiest one percent of taxpayers and the middle 75% of taxpayers pay 111% more than the wealthiest one percent." On top of this, higher-income earners also get a bigger tax break from paying property taxes, since they usually have more expensive homes that allow for a bigger write-off, and a higher federal income tax rate that allows them to get a higher deduction for each dollar of property tax they pay.

It also does a good job illustrating how sales and excise taxes hit the poor more than the rich. The top 1% to 5% of income earners only shell out 169% of their incomes in sales and excise tax, while the bottom 20% have those taxes take up four than 4 times that amount of income, at 6.7%. (Imagine if we ever raised the beer tax past 1969 levels!)

Corporations have gotten the better bargain when it comes to income taxes as well, as "according to the Wisconsin Department of Revenue, 66.5% of corporations pay no taxes and only 20% pay over a thousand in taxes." Why? "There are 33 different tax credits available to Wisconsin corporations, including many aimed at sectors that are already experiencing record profits and don't need a tax credit." The Dem-led Wisconsin Legislature was able to cllose some loopholes in 2009, and that, combined with a huge increase in profits has raised corporate tax revenues by over 42% compared to the same time 2 years ago, but it's still only around 7% of total revenues, and given what corporations get away with in property tax exemptions, the individual is still getting the shorter straw.

To add to this report, there's also a study showing that the top 400 income earners pay all of 17% of their income in federal income taxes, down from 26% in 1992, and these people also pay a fraction of the 6.2% you and I have been paying for Social Security. While you may hear the whiny canard about 45% of people not paying any federal income taxes in 2010, those people conveniently don't mention the Social Security, excise and sales taxes that hit lower incomes hard.

The numbers help explain why Scott Walker's budget proposals to shift taxes from corporations onto lower-income individuals and college students is a sick policy. It's quite literally a feudal mentality that allows the lords and day-trading gamblers to benefit off the backs of people who actually do work. And it's a hidden theme behind the protests that have been going on at the Capitol, because people see the two-tier society at work, and are tired of it.