Local government relies on tax fairness

The Wisconsin Counties Association estimates Wisconsin could get at least $100 million more in sales tax revenue if collected properly.

Tax fairness is part of the issue. Some Wisconsin citizens escape sales tax when they buy items from companies and stores outside the state that aren’t collecting the sales tax.

Under state law, Wisconsin citizens are supposed to add the uncollected tax to the amount they owe on their income tax. Failures to do so mean you are filing a fraudulent income tax return.

It sounds tough, but the Revenue Department is relying on people remembering their on-line or catalog purchases, taxes left unpaid and honesty.

Alas, not everyone remembers or is that honest. It’s also difficult, and probably expensive, to catch up with those who don’t voluntarily pay their uncollected sales tax.

Both Main Street merchants and “big box” stores, like Wal-Mart, want fairness in the tax system. Buying goods from out-of-state vendors without paying the proper sales tax puts brick-and-mortar community stores —large or small — at a price disadvantage.

Federal legislation could solve the problem, according to experts. The counties association has been asking its members about endorsing state and federal laws that would put everyone on a level playing field, tax-wise.

Elected folks, be they on county boards or in the Legislature, can be squeamish about doing something that would make people pay more in taxes. That reluctance is why some experts are skeptical about any effort to rewrite the federal income tax code or close unspecified loopholes as Mitt Romney has suggested.

The counties association cites a need for additional revenue.

County government provides substantial and costly human service needs. It’s important to remember counties are key players in law enforcement, including police and jail services.

If you want tougher penalties for drunk driving, for example, it will mean higher jail costs for the state’s 72 counties.

Government can be expensive.

That message is also being sent by the League of Wisconsin Municipalities.

The league is asking the Walker administration and Legislature to restore $48 million in revenue diverted to balance the state budget. Tax collections are running higher than expected in the budget, and the league wants the money back.

Both county and municipal government are facing higher pension costs in 2013, reflecting investment downturns of the last recession.

The pension costs will further squeeze local government and their workers in 2013.

The tax and aid issues won’t be addressed until January or February.

Tags: opinion, politics