Lawmakers Hear Calls for Reviewing Tax Breaks

Several tax experts told a special legislative panel today that any income tax reform in Wisconsin should consider eliminating the state’s many tax breaks.

Among those who testified was Matt Gardner of the Institute on Taxation and Economic Policy.The Institute favors a progressive income tax system and emphasizes the affects of taxes on lower and middle income workers.Gardner told a special committee studying changes to Wisconsin’s income tax that their first priority should be reevaluating every individual tax break, asking why it’s there and whether they want to keep it?

“No tax break should be sacred,” he says.”All should be evaluated.And adjustments to tax rates whether up or down should be a secondary choice.”

Making a similar point was Joseph Henchman of the Tax Foundation, a group that emphasizes the importance of taxes in economic growth and that regularly ranks state tax burdens.Henchman said tax incentives can be problematic.

“For the most part in most cases, you’re providing a benefit that they probably would have already done anyways,” he says.”You should definitely, at minimum, be reviewing tax incentives for their effectiveness, for their return on investment.”

Among Wisconsin’s many tax breaks are an exemption for social security income and credits for investments in manufacturing and agriculture.Republican Assembly committee chair Robin Vos has not committed to ending any tax breaks, though he has said he would like to lower the income tax next session.