I am a supporter of Scott Walker. I even went so far as to write his campaign a check, which is the first time I’ve ever donated to a campaign. It is my firm belief that the State must create a more friendly business environment for not only large corporations but smaller businesses like the one I own if we are to grow and prosper.
In the midst of Illinois raising their personal and corporate income tax rates Gov. Walker has blitzed the Chicago media urging Illinois business to "Escape to Wisconsin." While I appreciate his enthusiasm a few things need to be recognized and fixed.
Among them:
- Our personal income tax rate is still higher than Illinois.
- Our corporate tax rate is still higher than Illinois.
- While the Federal Government and many states allow small businesses to immediately deduct the first $250,000 of equipment, Wisconsin only allows for $25,000.
- Our unemployment tax imposed on employers continues to go up. Just two years ago the wage base subject to these taxes was $10,500. This year that base goes up to $13,000 and increases to $14,000 in 2013. To compound matters we impose a 3.05 percent rate on new business. This means a new business pays a tax of nearly $400 for each new employee they add.
- Our personal property taxes are higher than our neighboring states. Many of my dental clients spend several thousand dollars per year on this tax simply because they invested in new equipment. I pay a tax simply because I have desks and a copy machine.
- The Wisconsin Department of Revenue is extremely difficult to deal with. Whether it’s trying to clear up a misunderstanding on taxes or dealing with an auditor that is openly hostile to business, I have always told clients that the IRS is nothing to be afraid of when contrasted to our State.
I do like some of the governor’s proposals. Changes to the deductibility of health savings accounts are overdue. Giving companies a corporate tax holiday if they relocate here has some merit, but I’m not crazy about it. The problem with tax policy like this is it singles out certain companies or behaviors for special treatment. It was shameful when Mercury Marine got special treatment and it’s probably not a good idea to propose policy that singles some companies out while doing nothing for the companies who are here. We have too much “crony capitalism” in this state where certain businesses get a break on taxes or financing at the expense of the rest of us. The state should create a good environment for all business.
If Wisconsin really wants to compete on jobs we need to be more competitive on some of the items I listed above or else business will make the simple calculation that they are still better off in Illinois. Some of the talk has been nice, but real action needs to be taken to make our tax environment better for all businesses.
Michael Bark is a certified public accountant at Bark Accounting & Tax LLC in Elm Grove.
