If it’s tax time, it’s time to talk taxes. There are four interesting items that popped up the last few days, a Rasmussen poll, a CBS News poll (H/T – Allahpundit), a Milwaukee Journal Sentinel story series, and a video from the Center of Freedom and Prosperity (H/T – Ed Morrissey). Before I get to the meat of the post, I’ll present the video which explains how even those who don’t think the tax code doesn’t impose a significant drag on the economy are ensared by the massive amount of work that is required to comply with a code that requires a handcart to make just the federal portion portable.
In the CBS poll, very few people across all income levels think they’re undertaxed. Overall, 50% said they pay their fair share, 43% said they pay more than their fair share, and 1% said they pay less than their fair share, the worst fair-share/more-than-fair-share split in that poll since 1997. Interestingly, of those making less than $50,000 per year, despite many having no net federal income tax liability (47% at last count), only 2% said they didn’t pay their fair share. Of course, the 7.65% FICA tax, whatever portion of the federal excise taxes (mostly gasoline, alcohol and tobacco, a total of 0.46% of income in 2007), and whatever state/local taxes they pay put a drag on that.
That ties with the Rasmussen poll, where 66% believe that America is overtaxed, with 25% not believing so. In that poll, a plurality (34%) believe America pays around 30% between federal, state and local taxes, while 26% believe it’s around 20% and 15% believe it’s around 40%. Further, an overwhelming majority (75%) believes the total government take should be under 30%, and a near-majority (43%) believe it should be under 20%. In reality, as of 2007, it was over 37%, not including water bills or state-level unemployment/worker’s compensation.
That leads me to the big enchilada – the Journal Sentinel story, which uses Census data to compare Wisconsin state and local taxes to those in other states, and includes a sidebar story comparing Wisconsin and Minnesota. Dave Umhoefer noted that, once crosses the $30,000 threshhold in Wisconsin, or buys property, the hammer really comes down, and doesn’t stop coming down at a harder and harder rate. My biggest gripe is that he and the rest of the staff didn’t put the taxation in terms of income, so I’ll do that.
According to the Bureau of Economic Analysis, in 2007, the per-capita income in Wisconsin was $36,271, which ranked 26th-highest among the 50 states and the District of Columbia, and was a bit lower than the national per-capita income of $38,615. According to the Census Bureau, the state and local taxes were $23.340 billion, not counting water bills or unemployment/worker’s compensation taxes (which the Census Bureau counts separately). That took 11.49% of income in Wisconsin, which ranks 11th-highest and compares poorly to the average of 10.96% nationwide (note – I sent an e-mail to Dave last night asking whether he added water bills into that, which would make Wisconsin 15th because water bills in Wisconsin are far lower than the national average; I haven’t received a response yet). Specifically, property taxes took 4.14% of income (10th nationally, far higher than the 3.29% national average), sales taxes took 2.19% of income (34th nationally, lower than the 2.57% national average), the gas tax took 0.49% of income (9th nationally, higher than the 0.33% national average), individual income taxes took 3.12% of income (13th nationally, again far higher than the 2.49% national average), the corporate income tax took 0.45% of income (25th nationally, marginally below the 0.52% national average), and vehicle license fees took 0.18% of income (24th nationally, essentially the same as the 0.18% national average).
Fees in Wisconsin, ranging from tuition to school lunch, from hospitals to sewers, but not including utilities or mass-transit, took in $6.079 billion, or 2.99% of income. That was 31st nationwide, and just under the 3.02% national average. Overall, taxes and fees took $29.419 billion in 2007, or 14.49% of income. That ranks 19th, and is significantly higher than the 13.98% average.
Spending by the state of Wisconsin and local governments, which includes $7.166 billion in federal money transfered to the state and local units of government, was $46.612 billion in 2007. While the 22.95% of income ranks 28th, it is still higher than the 22.93% national average. Moreover, because that federal money is not quite what other states received, the $39.446 billion ex-federal-funding spending, which represents 19.42% of income, both ranks 16th-highest nationally and is significantly higher than the national average of 18.91%
Let’s compare that to Minnesota. The per-capita income was $41,108, which ranked 13th and was significantly higher than both the national per-capita and Wisconsin per-capita income. The tax take was $23.665 billion (11.11% of income, 20th nationwide, compared to 10.96% nationwide and 11.49% in Wisconsin), with property taxes taking 2.87% of income (31st, compared to 3.29%/4.14%), sales taxes taking 2.13% of income (36th, compared to 2.57%/2.19%), gas taxes taking 0.30% of income (39th, compared to 0.33%/0.49%), individual income taxes taking 3.39% (9th, compared to 2.49%/3.12%), corporate income taxes taking 0.56% (15th, compared to 0.52%/0.45%), and vehicle license fees taking 0.24% (15th, compared to 0.18%/0.18%).
Fees took in 3.01% of income in Minnesota, which puts the state 30th nationally, and slots between the nationwide average (3.02%) and Wisconsin (2.99%). Overall, the 14.12% of income taken by Minnesota and its locales puts it 24th, a few ticks above the national average (14.12%) and quite a bit better than Wisconsin (14.49%).
Spending in Minnesota follows a similar pattern because like Wisconsin, Minnesota is a “federal net donor” state. The $47.222 billion, including $7.333 billion from the federal government, represents 22.17% of income, good for 35th nationally and well lower than the national average of 22.93% and Wisconsin’s 22.95%. Backing out the federal money brings spending closer to the national average (18.73% versus 18.91%), ranking Minnesota 24th and placing it far better than Wisconsin’s 19.42%).