MacIver News Service | April 17, 2018
By M.D. Kittle
MADISON, Wis. – Today – two days later than usual – is Tax Day, when we Americans are reminded that in many ways we are indentured servants to a bloated government saddled by an ever-growing national debt.
By one measure, however, Wisconsin taxpayers are eight days freer than they were this time last year.
“Tax Freedom Day,” the day on which taxpayers have earned enough money to pay their total tax bill for the year, arrives on Thursday (April 19) for Badger State taxpayers, according to the Tax Foundation – Keeper of Tax Freedom Day.
Last year, Wisconsin taxpayers didn’t break their government obligation chains until April 27, according to the Tax Foundation’s calculations.
New York’s tax burden is the heaviest; the Empire State’s Tax Freedom Day arrives on May 14. Residents of Alaska and Louisiana tied for the earliest Tax Freedom Day, April 4.
National Tax Freedom Day also is Thursday, three days earlier than last year. The tax burden easing is thanks in large part to last year’s tax reform package pushed by President Trump and passed by the Republican-controlled congress.
The Tax Cuts and Jobs Act didn’t just slash the corporate rate (and it did, from a top level of 35 percent to 21 percent), it significantly cut tax rates for individual taxpayers. The tax code reform, the first of its kind in a generation, is expected to cut taxes on average by $1,600, according to the left-leaning Tax Policy Center.
Those “crumbs,” as Democratic Party leadership likes to derisively describe the tax breaks, represent a wage increase for taxpayers who are keeping more of their hard-earned money in their paychecks.
And millions of taxpayers have seen raises, bonuses, expanded benefits and other compensation increases from their employers who have benefited from a substantial reduction of one of the heaviest corporate tax burdens in the world.
In Wisconsin, Associated Bank announced it would boost its minimum wage to $15, and pay employees one-time bonuses. American Family Insurance said it would pay out $1,000 bonuses to 11,000 workers. Company officials did not return a request for comment Monday.
Cincinnati-based supermarket chain Kroger Co., on Monday announced it will use proceeds from the tax cuts to provide enhanced benefits to its employees – including higher wages and a more generous 401(k) benefit. Kroger’s Roundy’s division is headquartered in Milwaukee.
“The Tax Cuts and Jobs Act is a catalyst that is enabling us to accelerate investments in Restock Kroger, our plan to serve America through food inspiration and uplift,” Rodney McMullen, Kroger chairman and CEO, said in a statement. “We intend to make significant investments in our associates, to continue redefining the customer experience, and return value to our shareholders – sharing the benefit with all of our stakeholders in a balanced way.”
Smaller businesses are doing the same.
In December, Stevens Point-based Copperleaf Assisted Living announced it would give its 175 employees bonuses of up to $600, a direct result of the tax reform package.
“It’s really to bring awareness to what’s going on in our country and how it impacts them … And that businesses and corporations do want to do the right thing,” Krista Mendyke, Copperleaf’s co-owner, told the Stevens Point Journal, after the tax cut legislation passed. Mendyke did not return a request for comment.
While the tax burden may be lighter this year than last, it’s still a heavy load. And it’s not like the size of government is shrinking with lower tax revenue; the federal government continues to borrow at an alarming rate to pay for government programs, sticking subsequent generations with the bill.
Tax Freedom Day takes all federal, state, and local taxes and divides them by the nation’s income, according to the Tax Foundation.
“In 2018, Americans will pay $3.39 trillion in federal taxes and $1.8 trillion in state and local taxes, for a total tax of $5.19 trillion, or 30 percent of national income,” the Tax Foundation notes.
Wisconsin taxpayers have seen an easing of their tax burden over the past seven-plus years. Gov. Scott Walker, backed by the Republican-controlled Legislature, has delivered north of $8 billion in tax cuts. The state’s property tax burden has declined by nearly 20 percent, according to economist Stephen Moore. And Walker has led several rounds of income tax cuts, although the state’s progressive tax system continues to diminish some of its tax relief gains.
Still, Wisconsin is faring better than some of its Midwest neighbors.
Illinois and its massive public pension debt won’t celebrate Tax Freedom Day until April 29. Minnesota taxpayers are free, so to speak, on April 27, while the day arrives on April 24 in Michigan. Tax Freedom Day is April 18 in Iowa and April 10 in Indiana.