Republican Bill Would Shift $270 Million in Taxes From Business to Individuals

March 26, 2015

More than a dozen powerful special interest groups are backing a Republican bill that would cut about $270 million a year in personal property taxes paid by business. But critics say the tax burden would be shifted to individual taxpayers.

The measure has the support of the Wisconsin Manufacturers & Commerce, the state’s largest business group which exerts a powerful influence on state policymaking, spending and elections, and a dozen other trade associations, representing business, manufacturing, construction, tourism, insurance, and transportation interests, among others.

The sponsors, Rep. Bob Kulp of Stratford and Sen. Tom Tiffany of Hazelhurst, say the tax imposes economic, competitive and bureaucratic burdens on Wisconsin businesses, and are dubbing their proposal “The Small Business Fairness Act.”

But local governments oppose the measure because it would shift about $270 million a year in taxes onto homeowners. The tax shift would cost the owner of a median valued home an extra $80 a year, and likely more than that in cities and villages, which have a higher proportion of personal property.

The legislative proposal is also opposed by the Wisconsin Realtors Association, which says it traditionally supports reducing taxes, but not shifting them from one kind of payer to another. The realtors also say the proposal violates Republican Gov. Scott Walker’s pledge to reduce property taxes and blunts average property tax cuts totaling $131 that were approved during the 2013-14 session of the legislature. The association generally opposes any policy that would increase costs to homeowners and future homeowners because those policies make it more difficult for their members to sell houses.

The special interests that support the bill contributed $76,084 to Kulp between the beginning of 2013, when he was elected to the Assembly, and Oct. 20, 2014, which is 76 percent of all the large individual and political action committee contributions he accepted during that period. In Tiffany’s case, the special interest backers of the bill contributed $244,152 to him between the beginning of 2010, when he was first elected, and Oct. 20, 2014, which is 71 percent of all the large individual and PAC contributions he accepted during that period.