Crossroads
Nation should follow Wisconsin’s example
Walker v. Reich: Gov. Scott Walker and former Labor Secretary Robert Reich debate tax reform,
“The purpose of cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus.”
President John F. Kennedy’s comments promoting comprehensive tax reform before the Economic Club of New York more than a half-century ago are just as valid today. America needs a tax cut.
When I took office in 2011, the people of our state were suffering from record job loss and a multibillion-dollar budget deficit. We immediately set out to reform government, balance the budget and cut taxes. The results have been undeniably positive for the hard-working taxpayers of Wisconsin and for the bottom line of the state.
Property taxes will be lower in 2018 than they were in 2010. Income taxes will be lower in 2018 than they were in 2010. We even eliminated the entire state tax on the property tax bill for the first time since 1931. The cumulative impact of our tax relief through the end of the current budget will exceed $8 billion.
For decades, we were stuck at the bottom among the worst states for taxes. In 1995, our combined state-local tax burden ranked fourth highest in the nation according to the U.S. Census Bureau. In 2010, we ranked ninth. Today, thanks to our tax relief, Wisconsin now ranks below the national average for state and local tax burden.
Deficits? Gone. Our state’s economy is growing, and we’ve ended every year with a surplus since taking office. Our actions created what we call the Reform Dividend, which is a series of surpluses we are using to continue lowering the tax burden and make investments in priorities like K-12 education and worker training.
Our nation’s tax code, on the other hand, is outdated and in desperate need of reform. Due to the incomprehensible regulations and untold pages of forms and instructions, nearly 90% of taxpayers need external help to simply comply with paying their taxes.
Across the country, this time and energy spent adds up to some 6 billion hours and $15 billion to $16 billion in tax compliance costs, according to the Internal Revenue Service and the National Federation of Independent Business.
The negative impact on business is just as burdensome.
America’s corporate tax rate of 39%, the highest in the world among industrialized countries with advanced economies, drives job creators away from our shores. Since businesses have less money to work with after taxes, it suppresses wages and reinvestment for those that stay.
President Donald Trump’s tax reform plan will allow entrepreneurs and small businesses more room to improve, invest and expand, propelling economic growth and creating more family-supporting careers, all while freeing up Americans to keep more of their hardearned money. The president wants to simplify the tax code by consolidating our seven current tax brackets down to three, doubling the standard deduction, eliminating the death tax, and promoting capital investment for businesses of all sizes.
Such streamlining changes, if enacted, would pay huge dividends in driving economic growth and reinvigorating our workforce. With a corporate tax rate comparable to other advanced economies, businesses would be encouraged to do business in America, bringing potentially billions in income and jobs along with them.
Eliminating onerous restrictions and regulations would allow businesses to afford to pay employees higher wages and reinvest in their own growth. Meanwhile, middle-class families would earn more, keep more due to the higher standard deduction, save more with less stress and pass on more to their children without fear of a weighty death tax.
We’ve proven in our state you can cut taxes, create jobs, and generate budget surpluses at the same time. If it can work in Wisconsin, it can work for America.
Scott Walker, a Republican, is the governor of Wisconsin.