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Vol. 71, No. 7,
July 1998
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.
| The tax changes highlighted here were passed into law with the enactment
of the biennial budget bill (1997 Wis. Act 27) or the budget adjustment
bill (1997 Wis. Act 237). Among the provisions in 1997 Wis. Act 237 is a
property tax exemption for business computers. The computer tax exemption
takes effect Jan. 1, 1999. Other tax cuts have various effective dates. |
Major tax cuts
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.
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Rep. John Gard (R-Peshtigo) is cochair of the Legislature's
Joint Committee on Finance, the committee with primary authority over legislation
having a fiscal impact on state government, including Act 27 and Act 237.
He represents the 89th Assembly District and is serving his fifth full term
in the Wisconsin Assembly. Gard holds a B.S. in political science and public
administration from U.W. - La Crosse. |
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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