MADISON -- With unemployment in Wisconsin approaching 8 percent and the largest one-year job loss on record, Wisconsin Manufacturers & Commerce Monday called on the Legislature and the Governor to drop tax hikes that will hamper job growth.
"Wisconsin is in a recession, and many of the tax increases contained in the proposed state budget will only prolong or worsen the economic downturn here," said James S. Haney, WMC president. "We should be trying to help employers prosper so they can create jobs for our families."
Over $1 billion in higher taxes on businesses and investors are contained in the state budget introduced by Governor Jim Doyle. That’s in addition to over $200 million in business tax hikes contained in the so-called stimulus bill. WMC is offering the “Moving Wisconsin Forward Plan,” which calls for developing strategies to encourage job creation without placing new burdens on employers. Portions of the “Moving Forward Plan” are contained in the state budget, and WMC supports those provisions.
Wisconsin’s unemployment rate for January jumped to 7.6 percent, up from 5.8 percent in December and 2.7 percentage points higher than the January 2008 rate of 4.9 percent, the Wisconsin Department of Workforce Development said Thursday. The Milwaukee Journal Sentinel reported Friday:
“In 69 years of data, Wisconsin never lost more jobs in a 12-month period than the 72,700 positions that were shed since January 2008, according to new numbers released Thursday. "What continues to surprise me is the speed at which this picked up," said David Ward, president of NorthStar Economics Inc., based in Madison. In addition to the job losses, the Wisconsin Department of Workforce Development reported Thursday that the state unemployment rate jumped to 7.6% last month, from 5.8% in December and 4.9% in January 2008. It was the highest rate for January in 23 years.”
The state budget increases state spending by 10 percent over the next two years as private sector workers are facing salary freezes; wage and benefit concessions; and layoffs. "Wisconsin families are struggling and state government should be looking for innovative techniques to control costs," Haney said.
Haney said the income tax increase and increase in capital gains tax will discourage people from investing in job creation in Wisconsin. The state budget includes creating the 11th highest income tax rate in the country of 7.75 percent. Additionally, the budget would dramatically increase the capital gains tax, which would punish investors who would pay tax on 50 percent more of their gains and at the higher income tax rate.
“Taken together, these budget proposals would increase the capital gains tax for upper income earners by more than 70 percent,” Haney said. “That’s not going to spur investment and job creation in Wisconsin.”
In the two months of the legislative session, businesses have already been targeted with $200 million in higher taxes. The Legislature introduced and passed combined corporate income tax reporting. Governor Jim Doyle signed the change. The proposal was introduced on a Monday and passed and signed into law by Thursday without any public hearing.
The Legislative session started with a slew of proposals targeting employer for higher taxes, increased wages, increased liability, and increased regulation.
Below is a list of proposals affecting employers considered to date in the Legislature:
- Increase income taxes to a top rate of 7.75 percent, 11th highest in the nation.
- Increase taxes by over $1 billion on businesses and investors .
- Increase state spending by 10 percent over the next two years.
- Increase capital gains tax by cutting the 60 percent exclusion to only 40 percent.
- Increase energy costs with a gross receipts tax on petroleum products. Executives would face fines equal to the amount of the tax passed on to consumers.
- Expand liability by returning to joint and several liability that allows a defendant found to bear
1 percent of fault to pay 100 percent of the damages. - Increase pressure to raise property taxes by repealing the QEO, qualified economic offer law.
- Increase property taxes by exempting transportation and other expenses for school districts from revenue limits.
- Increase insurance premiums by mandating increased coverage for auto insurance.
- Increase the minimum wage by 17 percent.
- Repeal a ban on local minimum wage ordinances.
- Index the minimum wage increases to inflation, year after year, without any connection to worker productivity increases.
- Increase corporate taxes by 11 percent a year under a plan that taxes profits made on operations in other states.
- Increase insurance premiums on employers by nearly $100 million for new mandated health care coverage.
- Increase the garbage tax from $5.90 to $10.30 per ton.
- Increase fees for large water users.
- Mandate that workers' wage liens supersede banks in the event of a business closing. This will require increased collateral for you to get a loan, and may even require you to provide more collateral for existing loans.
- Expand prevailing wage law to private projects receiving public assistance.
- Expand prevailing wage law to public projects as small as $2,000.
- Increase litigation by allowing direct access to circuit court for some workplace discrimination claims, bypassing the Labor and Industry Review Commission.
- Allow juries to hear presentations from a judge about the legal consequences of a verdict in a civil case, and allow lawyers for both sides to comment before deliberations.
- Ban corporate speech at election time through increased regulation of business-funded issue advertising.
- Extend the sales tax to custom software and overturn a Supreme Court precedent established that said custom software is tax exempt.
- Redirect $1.45 million from the Wisconsin Unemployment Insurance Trust Fund to fund reemployment services to unemployment insurance recipients. The Wisconsin Unemployment Fund is currently insolvent and borrowing from the Federal Government to pay benefits.
- Direct payments to unions of $2.6 million for employment training.
- Extend compensatory and punitive damages to the workplace in discrimination cases.
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Posted: March 02, 2009
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