Recently Passed Legislation

At Issue: Major tax cuts benefit the public, business

By John Gard

The 1997-98 legislative session, which concluded a few weeks ago, was very productive, producing many significant accomplishments. Wisconsin's economy remains strong as state revenues continue to increase. With this in mind, the Legislature passed several tax cuts, including a Computer Property Tax Exemption designed to keep Wisconsin's business climate competitive as we approach the year 2000.

Now is the time to take advantage of Wisconsin's strong economy. By providing tax cuts, Wisconsin can stimulate economic growth. Accordingly, the surplus revenue generated from the successful economy was earmarked for tax relief. Below are some major tax cuts passed over the last year.

• Across the Board Income Tax Rate Cut/Inflation Indexing - Wisconsin taxpayer savings: $156.7 million.
  
  
• Marriage Penalty Elimination - taxpayer savings: $71.2 million.
  
  
• Working Families Tax Cut - taxpayer savings: $25.3 million.
  
  
• Family Business Protection Act - taxpayer savings: $5 million.
  
  
• Higher Education Tax Credit - taxpayer savings: $20 million.
  
  
• Long-term Care Tax Cut - taxpayer savings: $12 million.
  
  
• Internal Revenue Code Update - taxpayer savings: $14 million.
  
  
• Extra Property Tax Relief Credit - If any additional surplus revenue is discovered later this year, it automatically will go to increase the 1998 property tax rent credit.

Personal property tax on computers

The Legislature has remained dedicated to making Wisconsin a desirable and competitive place to create jobs and do business. With the leadership of Gov. Thompson, the Legislature passed several proposals to do just that. In addition to the above tax initiatives, the Legislature eliminated the personal property tax on computers for businesses. It exempts $2.5 billion in value of computer-related equipment from local property taxes. The taxes on that property are estimated at $64.8 million in 1997-98.

Under the computer tax break, businesses still will be required to estimate the value of their computer equipment and report it to the local assessors. However, they no longer will have to pay personal property tax on this equipment. Local assessors now will forward the reported values to the Wisconsin Department of Revenue (DOR). In return, DOR will determine the loss in local property tax revenues and reimburse municipalities.

The computer property tax exemption was developed to keep Wisconsin competitive in creating high-tech jobs. Many other states already have exempted computers from this tax. Those that do not are working to implement it soon. To attract high-tech industry and good-paying jobs, the state has to be aggressive in offering this relief, particularly when the economy is booming. Furthermore, Wisconsin cannot afford to lose current or prospective employers.

Bordering states have become competitive in attracting innovative businesses. For Wisconsin to remain in the fight, it must invest further in the high-tech sector. Ultimately, this relief will generate a larger tax base through business development and job creation.

With Wisconsin's strong economy, the computer tax exemption is an opportunity to build toward the future.

Now is the time to take advantage of Wisconsin's strong economy. Tax cuts will stimulate sustained economic growth. Accordingly, the surplus revenue generated from a successful economy should be earmarked for tax relief.

Recently Passed Legislation

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