by Joel McNally
July 17, 2002
In the upside-down Alice in Wonderland world of Madison politics, every time a thoughtful Democrat suggests looking at the billions of dollars in tax breaks politicians give away to special interest groups, Gov. Scott McCallum and the Republicans start screaming that somebody is trying to raise taxes.
The truth is just the opposite. Because politically powerful campaign contributors don’t pay their fair share in taxes, all the rest of us have to pay more.
So cutting off tax exemptions for those privileged folks who aren’t paying only raises taxes for those who are getting off scot-free. It would cut taxes for everybody else.
Congressman Tom Barrett is on exactly the right track when he proposes a complete review of the $3.5 billion in property and sales tax exemptions that have been passed out by politicians over the years. That is more than three times the $1.1 billion budget deficit the state temporarily patched up. Because McCallum didn’t do anything to permanently plug the hemorrhaging red ink in the budget, all he did was postpone the problem for the next governor who will face even greater deficits.
Barrett, who is a strong candidate to replace the ineffectual McCallum, noted that once a Madison lobbyist has succeeded in getting a tax exemption for a special interest group, it becomes permanent.
A tax exemption that might have been justified when an industry was struggling to survive may no longer be appropriate when millions are rolling in. A generous tax break to a political friend can slip by during flush economic times, but it can be much harder to justify when the state’s deficit is in the billions.
Many of these exemptions need constant policing to make sure they are not being misused. Politicians are afraid to oppose tax exemptions for powerful churches. But even their most devout constituents may not think religious organizations should be allowed to build multimillion-dollar tax-exempt communities complete with entertainment and athletic complexes.
Allowing any organization that calls itself a religion to avoid paying taxes is an open invitation to fraud and corruption. There is a fine line between a religion and a cult, an inspirational leader and a shyster. Churches that claim to serve the poor in the inner city have built tax-exempt mansions for their ministers in River Hills.
Some tax exemptions are just goofy. Barrett pointed out that a tax exemption on pet groomers costs the state an estimated $9.5 million a year. While it is vitally important to keep Wisconsin beautiful by encouraging that all pets be well groomed, many taxpayers may resent having to pay millions more in taxes so that pooch perms can remain tax-free.
Tax fairness and equality demand periodic review of the state’s jerry-built system of tax exemptions. Many of these were slipped into budgets over the years under cover of night by unscrupulous politicians to pay off special interests and big contributors.
We could find millions or even billions of dollars in loopholes that nobody can justify any more. Who could possibly be against cutting taxes for the rest of us by billions?