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Tuesday, Feb. 24, 2009

Doyle Plan not all THAT bad

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Faced with a huge deficit, Governor Doyle unveiled his new budget plan last week, and was immediately attacked by everyone who happened to have a soapbox nearby. Unless you serve donuts for a living, you can't please all the people all the time. I'm not going to defend all aspects of 2009 Assembly Bill 75, but faced with a huge deficit, Doyle presented a realistic, if unfortunate, package of spending cuts and new taxes to keep the state operating.

The response from the increasingly irrelevant and out-of-touch Republican Party was predictable. After searching a long, long time for an articulate statement from this fringe group, I found a statement from Senate Republican Leader Scott Fitzgerald, who maintained that "The budget increases the burden on Wisconsin families through tax expansions and tax hikes. The governor's proposals will tax a wide variety of goods and services from gas and cigarettes to cloth baby diapers and downloaded music. Families will be shouldering the burden to pay for the size of state government."

O.K. then, let's take a look.

Let's start with the incomprehensible attack on the 75 cents tax hike on each pack of cigarettes sold. Can anyone really have a problem with this? This alone will generate almost $300 million in additional funds, and hopefully discourage more people to stop smoking. I can't see how even the most clueless Republican could argue for LOWER cigarette taxes. Now, I'll grant that raising the taxes on gasoline is no help to the average citizen, and I can't envision how raising the taxes on cloth diapers would help families, either, (or bring in substantial monies). Here, Fitzgerald has a valid point. But what really irks the Republicans is the proposed 7.75% tax rate on the richest 1% (coincidentally, a largely Republican constituency) of Wisconsinites, which will raise over $300 million more for the state. At the risk of sounding like an Obama socialist, "from each according to his ability," I say. You would think the taxes on gas, diapers and smokes would make the Republicans happy, as these will be paid for the poor people too.

I also can't find fault with tapping the revenues of out-of-state businesses doing business in Wisconsin. Wisconsin businesses already pay similar taxes for doing business in other states, so Doyle is in effect leveling the playing field, it would seem, and helping Wisconsin businesses through these new taxes. Add in another $540 million in new taxes on oil companies? I concede here that such fees may very well be passed on to the consumer at the pump, so I can't defend that one vociferously.

New taxes on capital gains projected to net an additional $85 billion? As my Grandpa would have said, "They really get ya coming and going!" Those with the means to invest are in enough trouble already with the tanking stock market, and to tax what meager profits are to be had these days seems a little regressive. I would assume that there is a different rate for individuals and corporations, or at least hope so. Doubtless some reader can set me straight on this.

The new taxes were mightily mitigated by the $2.1 billion in federal stimulus funds offered by the Obama administration, which allows the state to continue funding health and education programs. Yet Republicans will deride the acceptance of such funds while at the same time bemoaning the needed tax hikes, which would have been much higher without the stimulus cash. Does this make sense to anyone?

As to the charge that Doyle's budget requires sacrifice from the taxpayer but not from the state, well, I can't see that as being entirely true. Doyle has made a lot of unpopular budget cuts in his budget. Surely there could have been a lot more cut, I will agree.

So, while Doyle's budget plan is far from perfect, I think it is a realistic step in the right direction so that Wisconsin doesn't end up with the nightmare scenarios facing other states like California and Kansas. There is always room for improvement.