Here is What You Voted For--More Taxes

Taxes Going Up Again on September 1st

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By Mike Huebsch - Posted on 28 August 2009

Beginning next month, virtually every Wisconsin taxpayer will send even more money to the state treasury.

A vast majority of the $3.1 billion state tax and fee hikes enacted by Democrat lawmakers took effect immediately after Governor Doyle signed the state budget in June. Exceptions included the second cigarette tax hike in less than two years and a new phone tax, both set to take effect on Tuesday.

Every telephone line in Wisconsin – wireless, landline, voice-over internet, and facsimile – means another $0.75 per month in the state coffers. If you pay for a wireless family plan with several separate phone numbers, each one will be taxed. Your home office line is taxed in addition to your personal line, and a fax machine means another monthly tax payment.

Small business owners who provide cellular phones and pagers to employees, in addition to the necessary landlines, are taxed again and again. Large employers, school districts and healthcare providers get a bit of a break after paying for 10 lines, but face hefty increases nonetheless. In all, the state will collect $107.6 million in less than two years.

The cigarette tax increases from $1.77 to $2.52 per pack, while taxes on smokeless tobacco products also go up. It means a $334.8 million tax increase during the current budget period which ends on June 30, 2011.

When Governor Doyle signed the 2009 state budget on June 30, his accompanying press release declared that “the budget does not raise taxes on middle class families.” It’s a bold statement, but completely indefensible. It is simply not true.

If the definition of “is” can be debated, I suppose anything can. But to argue that these aren’t taxes or that middle class families won’t pay them more than strains the governor’s credibility.

From the start, Governor Doyle and legislators tried to disguise the phone tax by labeling it a “fee” in the state budget bill. It’s officially titled the “police and fire protection fee” even though the dollars are not required to be spent on either of these public safety services.

Wisconsin residents pay many fees in exchange for specific government services. Hunting and fishing license fees pay for conservation programs and state park fees pay for the upkeep of those parks, among others.

In contrast, the $107.6 million collected from the phone tax is deposited in the state’s general fund along with income, sales and excise tax revenues. From there, the money is distributed to local governments through the existing Shared Revenue program.

Shared Revenue needed the cash infusion to fill a hole created by Governor Doyle and Democrat lawmakers who cut payments to local governments in order to send more money to Madison, Milwaukee and their own districts for special projects.

There are no limitations on how local governments can spend these dollars and, more importantly, no requirement that they pay for police and fire protection, despite the intentionally deceptive name of the “fee.”

Attempts by Governor Doyle and Democrats to trick taxpayers didn’t end there. They authorized telecommunications companies to roll the tax into the existing 911 fee currently printed on all phone bills. That fee was established to support 911 emergency services and, most recently, to finance upgrades so that dispatch centers could receive and track cellular 911 calls.

If phone companies take advantage of this option, the bill will show a “charge for funding countywide 911 systems and police and fire protection fee.” Democrats are banking on two things. First, that by combining the new tax with an existing fee, you won’t notice it. Second, that if you do notice the “fee” increase, you will assume it is funding 911 emergency services – services you benefit from as a phone user.

The cigarette and tobacco taxes are as straightforward as they come. They won’t affect every middle class family, but they will certainly affect a good number. The governor and supporters of the tax frame it as a strategy to stop people from smoking and say it’s not really about the money. If that were true, the tax increase would have been paired with a corresponding tax decrease so that taxpayers didn’t pay more, but of course it wasn’t.

These are just two examples of the hypocrisy of Madison Democrats who say middle class families aren’t paying new taxes. In May, I compiled a list of new fees and taxes Governor Doyle and Democrats have imposed on middle class families. In July, I shared a complete list of tax hikes in their final two-year spending plan. Take another look if you have a few minutes. The fact that the governor and the Democrats feel that there is no need for their words to match their deeds will likely make you as livid as it did me. As our twentieth president James Garfield once said, “the truth will set you free, but first it will make you miserable.”