COWS- Center on Wisconsin Strategy: Budget and Tax Policy

Budget and Tax Policy

In thinking about high-road strategies for building healthy communities and regions, COWS pays special attention to how taxpayer dollars are collected and used. In an era of dwindling public resources, it is important that state government be able to harness fair contribution from all parts of society – including corporations and the wealthy – while improving its accountability and efficiency in spending. At COWS, we investigate ways to make tax contributions more equitable across socioeconomic lines and to ensure that public revenue is effectively allocated for pressing public needs.

In June 2004, COWS sponsored a major conference on state budget and spending prioritiesin collaboration with the Wisconsin Council on Children and Families, entitled Financing Wisconsin's Future: Politics, Economics, and Public Opinion.

Budget and Tax Policy Publications

Here are some examples of our Budget and Tax Policy work:

Corporate Tax and Subsidy Disclosure: Policy Options for Wisconsin (PDF)

Madison, Wisconsin, July 3, 2007 - A new report from the Center on Wisconsin Strategy (COWS), Corporate Tax and Subsidy Disclosure: Policy Options for Wisconsin, highlights policy weaknesses and proposes a new tax and subsidy disclosure policy that would affect all publicly-traded corporations (“C” corporations) and their subsidiaries doing business in the state.

After reviewing other states’ current and proposed tax disclosure plans, the new COWS report recommends that Wisconsin adopt a policy requiring these companies to disclose, at a minimum, how much they pay in taxes to the state, how much business they do in the state, and how much financial help they get from the state. This information would then be made available to the public in a searchable database.

“This level of transparency is key for policymakers and the public to better evaluate the tax system and see if it is truly working in the economic interests of the state,” said Kate Gordon, lead author of the report and senior associate at COWS.

The report points to Illinois as an important example. Illinois has enacted one of the nation’s most comprehensive corporate subsidy disclosure laws. The 2003 Illinois Corporate Accountability Act requires companies receiving any number of state economic development dollars to report on their progress in achieving job creation, retention and wage promises made in subsidy deals.

“Illinois has developed a database that allows the policymakers and public to understand what investments the state is making,” Gordon said. “Something like this is feasible and realistic for Wisconsin as well.”

Additional transparency would benefit Wisconsin’s businesses as well, because it could lead to a fairer tax system. The fairer tax system would allow companies that shoulder their full tax burden under existing laws to be more competitive with those companies taking advantage of unfair tax loopholes and unchecked subsidies.

As the report points out, exposing the current tax and subsidy system to public scrutiny may well lead to fewer tax loopholes, and in turn to increased corporate tax revenues. The end result is more money flowing to state programs such as workforce training, education, infrastructure and other public resources that are highly valued by firms – more highly valued, by most accounts, than low taxes.

Corporate Tax and Subsidy Disclosure: Policy Options for Wisconsin, can be found online at: www.cows.org/pdf/rp-corp-tax.pdf.
7/3/2007
Corporate Tax and Subsidy Disclosure: Policy Options for Wisconsin (PDF)

In the past year, Wisconsin’s corporate tax system has come under scrutiny. A summer 2006 Legislative Audit Bureau (LAB) report highlighted the fact that the state has dozens of subsidies for corporations, but does little to track the effect of these subsidies on the state’s business climate. Six months later, the non-profit Institute for Wisconsin’s Future reported that many of Wisconsin’s largest and most well-known corporations pay no taxes. Both reports led to a public demand for more transparency and accountability.

In this report, we respond to this call for accountability and fairness by recommending that Wisconsin adopt stronger corporate tax and subsidy disclosure requirements, including mandating disclosure both of tax information beyond bottom-line tax liability and of state subsidies received. Such measures would provide the public and policymakers with clear and measurable information about the state’s corporate tax climate—information that is critical to crafting tax reforms to ensure a more equitable distribution of the tax burden across individuals and firms.

A fairer tax system is also good for Wisconsin’s business climate: It allows companies that shoulder their full tax burden under existing tax laws to be more competitive with those that take advantage of tax loopholes, and also closes these loopholes, resulting in more dollars flowing to state programs like workforce training, education, infrastructure and other public resources that are highly valued by firms.
6/4/2007
Efficient and Strategic TIF Use: A Guide for Wisconsin Municipalities (PDF)

Efficient and Strategic TIF Use: A Guide for Wisconsin Municipalities offers strategies for Wisconsin’s cities and villages to use their TIF funds to expand local economies and leverage for high-quality, sustainable development.
12/5/2006
The Big Myths about Taxes and Spending in Wisconsin (PDF)
11/1/2004