Businesses Deserve Liberty Too

Lasee’s Notes

After celebrating our liberty and independence last week, it’s unfortunate that many state businesses and their employees may be enjoying their freedoms elsewhere next year. Our high tax burden is not only forcing out our best and brightest individuals, it is also making it more difficult for businesses to stay here and less likely that new business will come.

Our economy suffered three major setbacks last month. RedPrairie Corp., one of the state’s leading software developers, announced the company may relocate to another state and take 200 jobs with them. LoPresti Aviation, an airplane manufacturing company, announced that “there was a snowball’s chance in a Wisconsin summer” that it would open a plant and create 300 jobs in Manitowoc. Honda motors decided to build a $550 million assembly plant with 2,000 jobs in Indiana instead of Wisconsin. That’s 2,300 high paying jobs lost in one month.

It gets worse. Competitive Wisconsin released a report (access it here) on the condition of Wisconsin’s economy. According to their data, 75 manufacturing companies in Illinois announced expansions last year, 180 in Michigan, 36 in Minnesota, and 64 in Iowa. Wisconsin had six – yes 6!

With our state tax burden among the highest in the nation (not to mention our poor regulatory and legal environment) it’s no wonder many businesses are choosing to flee or not look here for expansion. RedPrairie’s CEO, John Jazwiec, said it best when he characterized our high tax burden as the “5,000 pound elephant in the room.”

In today’s global marketplace, where jobs and money are more mobile, businesses will move to places where they can maximize their profits. Wisconsin is not that place.

What can we do to change our ‘tax hell’ title to attract and keep businesses?

Abolishing corporate income taxes entirely would be a good start. We automatically tax 7.9% of all business profits regardless of how much they make. That is on top of the 35% the federal government takes from the average business. Talk about injustice.

Now you may be asking how can we afford to eliminate corporate income taxes? A better question is how can we afford not to?

Whether it’s directly (corporate income tax, property taxes, sales taxes, etc.) or indirectly (through their employees) all businesses pay taxes. These taxes are ultimately passed on to consumers, employees, and stockholders in the form of higher prices, lower wages, and decreased stock values. So the more taxes a business pays, the more we all pay.

Ireland understands this. After years of stagnant economic growth, the Irish cut their corporate income tax and revamped their tax system to make it more business friendly. The world business community responded. In fact, nearly a quarter of American business investment in Europe is now in Ireland. Ireland is now the second richest country in the European Union. Their gross domestic product (the market value of all goods and services produced) is higher than European powerhouses Germany, France, and Great Britain.

This recovery was not simply the luck of the Irish. It was about increasing liberty for businesses by allowing them to keep more of their money. Rather than punishing them for their success.

Wisconsin should follow Ireland’s example.
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Lasee’s Notes is a weekly column by Representative Frank Lasee, 2nd Assembly District, covering events in the Legislature and statewide.

Working Harder to Get Less

Lasees Notes

The Wisconsin Taxpayers Alliance, a respected, non-partisan source of information on Wisconsins government spending and taxes, released a study on how much of our income state and local governments spend. The analysis was based on the latest US Census
spending statistics. The conclusions were not good and not surprising.

In 2004, Wisconsins state and local government spending took nearly 22% ($6,670 per
person) of our incomes. More than $20 for every $100 earned. So if you are making $3,000 per month, state and local government spending will take $660 off the top. Ouch!

Elementary and secondary schools accounted for the bulk of government spending at 5.2% of income (14th in the nation). So much for the argument that many schools can't survive without more of our money. Higher education (the UW System) took 2.5% of our income (13th highest in the US). Our generous public welfare system claimed 4.1% of our incomes (16th in the nation).

The study found that Wisconsin spent more than the national average on every major government service area.

Over the past decade state and local spending has grown considerably as a portion of
our income. In 1994, it was 21.2%. In 2002 it jumped to 21.4%. And in 2004 it grew again to 21.9%.

Our income growth has lagged the nation for years. In 2004 our personal income grew 5%. In 2005 it was a paltry 2.6%. This year isnt any better. In the first quarter of 2006, personal income grew by 1.1% (40th in the nation for the period).

Consider the fact that our unemployment rate is fairly low (less than 5% in May) and that we have high numbers of working adults (nearly 3,000,000). Clearly we work hard here in Wisconsin.

The more money we earn, the more our government takes. Our incomes are virtually stagnant, yet a majority of our governments are growing their spending faster.

Wisconsinites are working harder to keep less of the money we earn.

As government grows, so do our taxes. People who have the ability to earn money understand this. They are relocating to more tax friendly states. They are taking their wealth, philanthropy, intelligence, taxes they paid, and businesses with them.

Then we are replacing the higher income people with lower-to-middle income people. In many cases, these people are coming here to reap the benefits of our generous
government (the government that you and I have paid nearly $7,000 per person,
per year to maintain).

There is a better way. The Taxpayer Bill of Rights will tie government growth to our ability to pay. Thus, preventing our government from spending more than we can afford, unless they ask through referendum first. In the long run, it will mean more money in our pockets because our economy will be better and government spending will be done more wisely.
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Lasees Notes is a weekly column by Representative Frank Lasee, 2nd Assembly District, covering events in the Legislature and statewide.

Keep Benefits on the Table in State Labor Discussions

Lasee’s Notes

Last Wednesday was the last official session day in the State Assembly. We honored three fallen soldiers and a former Milwaukee mayor. We finished business for the year by approving four state employee contracts. I voted against two of them and here’s why.

For several years, many government employee unions have pushed for pay parity (read as, they want more money). In their minds, public employees are underpaid in comparison to their private sector counterparts and therefore deserve a raise.

Unfortunately, the Legislature played along. Many state employee contracts (including the two I voted against last week) now include salary increases higher than those being offered in the private sector. That is on top of the generous benefits state employees enjoy.

Wisconsin is not unique. According to the Employee Benefit Research Institute, by the end of the 1990’s average state and local employees were collecting nearly 50% more in total compensation (salary and benefits) than the average private sector employee. Local governments were paying 128% more than private businesses to fund health care benefits and 162% more on retirement accounts.

In the past, government employees accepted the fact that working for the government meant working for a lower wage. They knew a generous benefits package made up the difference. Today, many government employees want to be paid as well or better than those in private business regardless of their benefit plan.

Let’s examine the typical benefits package a new state employee will receive.

According to WISCJOBS (the state’s online employment listing) a new government employee can expect to receive the following benefits:

• Paid Vacation: 2-3 weeks for the first 5 years of service;
• Retirement: The state automatically pays 5% of a vested employee’s salary into the account and matches another 5-10% for non-vested portion;
• Personal Holidays: 3-4 days to be used at the employee’s leisure (on top of the 9 legal holidays with pay);
• Sick Time: the employee accumulates 10 hours of sick time every month (unused sick time is carried over every year and upon retirement is converted to pay health insurance premiums);
• Health Insurance: the employee can choose from a variety of top-of-the-line health care providers for themselves and their family’s medical needs. The average monthly premium for a family plan is $55 (not bad considering the real cost to taxpayers is over $1200 a month, per employee);
• A host of other valuable benefits including life insurance, access to tax-free health savings accounts, income continuation insurance, catastrophic insurance, dental insurance, long-term care insurance, commuter benefits program, deferred compensation, and workers comp.

Many of you reading this in the private sector are probably questioning your choice of careers at this point.

Wisconsin should look at our entire pay and benefits package. It should all be taken into account. We should pay competitively with the private sector, benefits should be included when we decide what we compensate government workers.

Let me say that I truly believe that the majority of government workers are hardworking and dedicated employees. They produce and deliver the valuable government services many of us have come to expect. However, I think that it is imperative for all government employees (myself included) to realize how lucky we have it.

Our benefits and wages are among the best in the nation. We pay very little for the healthcare and other valuable taxpayer funded benefits we enjoy. The least we can do is admit it.

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Lasee’s Notes is a weekly column by Representative Frank Lasee, 2nd Assembly District, covering events in the Legislature and statewide.

Fall Horror Show or a Remarkable Comeback?

By Rolf Lindgren

The clock is ticking. By July 11, we’ll know who the Wisconsin candidates are
for Governor. Many are grimacing at the prospect of a fall dual between Democrat
Jim Doyle and Republican Mark Green.

The Republicans nominated Mark Green, the former Assembly Republican Caucus
Director. Of all the people who live in Wisconsin, and in the wake of the Caucus
Scandal, the Republicans chose the former leader of an organization deemed
criminal to lead them.

Green is an ardent supporter of Bush’s failed war in Iraq; a war only 22% of
Wisconsinites agree with, according to a recent Strategic Vision poll. Green
supports Bush’s program to eavesdrop without warrants on innocent Americans; a
program called “illegal” by Senator Russ Feingold. If Green were elected, he’d
be little more than a puppet of the borrow-and-spend Republicans in Washington,
DC.

The Democrats aren’t much better. Jim Doyle’s reputation for selling government
to the highest bidder is becoming legendary. The Adelman Travel scandal is the
tip of the iceberg in the minds of many. The Kewaunee Nuclear Power plant
scandal is looming.

And lest we forget, Doyle was our Attorney General for twelve years. During that
time, he was unable to uncover the Caucus Scandal. Hmmm?

With choices like these, you won’t have to go to the movies to see a horror
show. The horror show will be beamed right into your own home, courtesy of
negative Doyle and Green campaign ads. Doyle and Green are hoping you’ll
overlook their annoying two-way partisan bickering, and vote for the “lesser of
two evils”.

But there’s hope on the horizon. Libertarian Ed Thompson could still collect
2000 signatures by July 11 to get on the ballot. If so, Ed has a remarkable
chance to be elected Governor of Wisconsin.

Remarkable, because a new documentary movie about the life of Ed Thompson has
been released on DVD. The movie, called ‘A Remarkable Man’, documents Ed’s
famous legal victory over the nickel poker police, as well as his 2002 run for
Governor. The movie is receiving rave reviews from conservative, libertarian,
and liberal bloggers alike. Even Bill Christofferson, Doyle’s 2002 Campaign
Manager, stated on his blog June 12, that the ”Movie explains Ed Thompson
mystique”. The release of ‘A Remarkable Man’ could lead to a blockbuster
three-way battle for Governor between Ed Thompson, Mark Green and Jim Doyle, if
it inspires an Ed Thompson comeback. Instead hypocrisy, real issues facing
Wisconsin could be debated.

First among the issues is campaign finance and election reform, which the public
has been clamoring for since the Caucus Scandal broke in 2001. With Democrats
and Republicans occupying power, nothing has been done. Doyle and Green have
zero credibility when it comes campaign reform. That’s why Wisconsin needs Ed
Thompson to carry the campaign reform banner in the fall elections.

Because Ed holds reasonable and moderate Libertarian views, he reaches out to
both the left and right. Liberals like his stand against the anti-gay marriage
amendment and prison building, and his support of re-legalized medical
marijuana.

Conservatives like his calls for lower taxes, the right of conceal carry,
vouchers for private schools, and the free market in general.

After the 2002 election, polls showed that Ed Thompson had an approval rating of
39% among Wisconsin voters. In a three-way race, you can win with 34% of the
vote. Jesse Ventura won Minnesota with 38% of the vote. If Ed Thompson can win
the Libertarian primary against Roy Leyendecker in September, Ed can win in
November 2006.

Corruption in government has continued unabated since 2002. If Ed Thompson
doesn’t enter the race for Governor, expect corruption to continue unabated
until 2010, at least.

Rolf Lindgren is the Vice-Chair of the Libertarian Party of Wisconsin.