Taxes Down, But No Impact on Jobs
State has dropped its ranking for taxes and fees, yet trails other states in new jobs.
Wisconsin’s ranking among the states in many measures of government revenue and spending has dropped considerably since about 2000, but that hasn’t translated into an increased pace of job creation, new figures from the U.S. Census Bureau show. In fact, Wisconsin continues to trail the national average in job growth.
As we reported previously, the latest data shows Wisconsin state and local governments ranked 25th among the states in the amount of taxes, fees, and other charges they collect from state residents when measured on a per-person basis. This downward trend in Wisconsin’s tax and fee ranking didn’t start with Gov. Scott Walker’s administration, but his focus on cutting taxes has contributed to Wisconsin’s continued drop.
Walker has argued that cutting taxes will improve the state’s economy, thereby allowing businesses to hire more people, but the state continues to lag well behind the national average in the pace of job growth. Wisconsin ranked 31st among the states in private sector job growth for the period for which the most reliable set of data is available, trailing behind the Midwest states of Minnesota, Michigan, Missouri, and Indiana. Tax cuts have been one component of Governor Walker’s efforts to make sure that Wisconsin is “open for business,” but if Walker has had any success in improving the state’s business climate, it hasn’t translated to improving job growth in the state.
The tax rankings show a decline in some measures of tax and fees paid by Wisconsin residents, but what they don’t show is which state residents are paying taxes or receiving the tax cuts. A Wisconsin Budget Project analysis showed that a disproportionately large share of the tax cuts passed in Wisconsin since 2011 have gone to the rich. Middle-class residents received less than the wealthy, and residents with low incomes received the smallest tax cut. That pattern holds true even when the tax cuts are measured as a share of income, an approach that takes into account relative income size. (Read more at Missing Out: Recent Tax Cuts Slanted in Favor of those with Highest Incomes, June 2017.)
For the complete picture on how Wisconsin compares to other states in various measures of taxes, revenue, and spending, read our new analysis: Middle of the Pack: Wisconsin Government Revenue is Similar to that in Other States.