It is disappointing that neither candidate for governor is willing to have a serious conversation about tax reform, but that is not unexpected when we are five weeks out from an election.
The candidates responded to a study from the Milwaukee-based Wisconsin Policy Research Institute that found Wisconsin could boost its economy without bankrupting state government by cutting income and property taxes, while broadening its sales tax on consumer goods and services — including groceries.
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The study treads on some volatile political turf, presenting the elimination of 24 sales tax exemptions — including grocery store food, gas, construction labor, legal services, bottled water, fitness clubs, newspapers, coffins and funeral services — as a way to cut taxes while balancing the state budget. Taxing such goods and services would generate $2.3 billion in state revenue.
It also raises the possibility of replacing the sales tax with a gross receipts tax or value-added tax, which are used in Canada and many European countries.
Still, there are some very worthwhile ideas in this study that are worthy of discussion. Personally, I am in favor of shifting more of the tax burden to various consumption taxes, but I do not like VATs. A sales tax levied on the end consumer is more transparent than the VAT and less susceptible to political monkeying around.