Thursday, February 22, 2007

Lasee's Interesting Numbers

While Lasee's post has some big lacunae (what happened to the $75K-$100K earning range?), the point remains valid:

In Wisconsin, there are less rich people to pay taxes than in most other states. If they are not here to pay, someone will need to pick up the slack.

That's because:

Only 8.7% are “higher income” (over $100,000)...

Lasee cites Census Bureau figures. This is serious:

Jon G. Udell, professor emeritus at the University of Wisconsin-Madison's School of Business, analyzed the Census data and concluded that Wisconsin ". . . has too few high-income families and households providing revenue to government. Wisconsin needs more relatively high-income citizens to help balance the state budget.

Recall that Madison's median family income is $64K, while Milwaukee's is $35K, and that much of DarthDoyle's tax-increases are regressive (gasoline, auto fees, hospital, nursing homes, and cigarettes.)

Lasee worries that "the rich" will flee Wisconsin. It's a valid concern. Given Doyle's proclivities, it's likely that those who remain will be in debtor's prison for their inability to PAY the taxes in the first place.

7 comments:

M.Z. Forrest said...

Sometimes I wonder. Mr. Lassee assumes a portability that doesn't exist. Or if you prefer, he assumes that if someone leaves, their work won't be replaced. Here are a sample of jobs that have a significant demographic over $100,000 annual earnings.

Software Engineer - The Midwest is particularly weak in this area. You are pretty much looking at the Twin Cities or Chicago.
College Professor - Yep, they are fleeing the State.
Financial Advisor - Wisconsin has clients that need financial planning ergo, there will be financial planners in Wisconsin.
HR Manager - ...
Physician Assistant - Yep, we have sick folks in Wisconsin.
Pharmacist - ditto.
Psychologist - Yep, we have them too.

Retirees certainly have the luxury of moving. Your typical retiree will not have taxable income in that range though. What is killing us is our inability to grow GDP in this state. Our GDP per capita was 27th in the nation in 2005, down two spots since 2004. States that eclipsed us were Oregon and Pennsylvania.

Headless Blogger said...

Quite right MZF - Why would a theoretical member of the $100K club performing consulting work in Michigan want to move his theoretical domicile from Wisconsin and stop feeding the all too real Wisconsin tax beast?

m.z. forrest said...

I'm generally sympathetic to the taxes are too high argument. That doesn't mean we should throw logic out the window.

BTW, technically that consultant would be a 1099 employee whose earnings would be taxed in the place where the work was performed. (IIRC, baseball players are taxed on that portion of their income they earn when they play at Miller Field.)

Dad29 said...

MZ--that's not correct. Baseball players are W-2, for openers, OR they are personal service corporations, which have more interesting rules than 1099's.

1099's pay income tax to their home state, wherever it may be. I've earned money in Minnesota but have not paid income tax up there--because I live in Wisconsin.

By the way--is it just co-incidence that the Wisconsin GDP is not going up and there are few "high-income" people relative to the rest of the people?

Finally, "portability" is not germane. The point is that the "upper-income" group is too damn small.

m.z. forrest said...

Re out of state ballplayers:
http://www.revenue.wi.gov/forms/2001/01ic058i.pdf

Minnesota income for Wisconsin residents is governed under a reciprosity agreement.
http://www.taxengine.com/articles/reciprocal_agreements.asp

Headless Blogger said...

For WI residents, as defined by the IRS domicile rules, it matters not where the income was earned nor where withholding or estimated tax payments were paid.

WI residents must pay income tax on all income earned - period. They will receive a tax credit for income tax paid to other states. These taxpayers end up being taxed at their highest marginal rate for WI.

Dad29 said...

For the record, I DO pay Wisconsin income taxes. A LOT of them.

As to the baseball players: it's interesting that the page you cite applies only to 2001.

But granted that it's applicable to all tax years going forward from 2001, you are correct--they DO pay WI income taxes. One hopes that such payments are credited against their own State's income tax liability.

And just for fun--how much do you suppose those multi-state 1CNA's cost each team?