Taxes set a record in 2005

Mike Johnson reports in today's Milwaukee Journal Sentinel on a Wisconsin Taxpayers Alliance study which showed Wisconsin residents paid a record total in local, state and federal taxes, 10% more than last year.

"Our government is growing faster than our economy and our incomes. The percentage of take from us is ever-increasing," said Rep. Frank Lasee (R-Bellevue), a sponsor of the legislation, known as TABOR [for Taxpayer Bill of Rights]. "That's why I believe so strongly in TABOR. Limiting growth allows the private sector to have a little more money in our pocket."

The previous record amount was paid in 2000.

"In some ways it's easy to play this sensationally, but there's not much surprising here," said Andrew Reschovsky, professor of public affairs and applied economics at UW-Madison. "Taxes are by their very nature cyclical. We had a recession and that led to big reductions in state tax revenues. It's taken four years almost to come out of that."

An accompanying graphic shows a trough in taxes paid between 2000 and 2005 but not an obvious cyclical pattern back to 1980. It does not relate the growth in taxes to a measure of ability to pay.

The report states that total taxes claimed 32% of personal income in 2005, up from 30.6% the prior year. Nonetheless, taxes as a share of income in 2005 were the fifth-lowest in a ranking of all the years in the 1980-2005 period, the study says. The lowest was 30.5% in 2003, and "taxes relative to personal income remained well below their 2000 peak of 36.7%," according to the study.

"It's not that we shouldn't be concerned about it. At 32%, we're still among highest-taxed in the country," Knapp [Dale Knapp, research director of the Wisconsin Taxpayers Alliance] said.