Flawed tax code: Wisconsin gubernatorial candidate Mark Green has proposed a three-day “tax holiday” the first weekend of August as part of his platform. The plan would allow sales taxes to be excused on purchases of school supply items under $50, clothing items under $100 and computers less than $1,500. The chief purpose of the plan is to give Wisconsin families a break during the expensive back-to-school season.
On the surface, the plan looks great. Honestly, who wouldn?t want a tax break? Taking a deeper look at the details of the proposal, however, reveals several flaws. First, how much money would Wisconsin families truly save? Wisconsin state sales tax is 5 percent, and several counties tag on an additional 0.5 percent. Let?s say a family spends about $300 on school shopping, following the guidelines. Depending on the county of residence, the savings would be around $15. Although every little bit does count, consider the costs. That family would save $15, but at the expense of the state, which would lose an estimated $10 million dollars in tax revenue from that weekend. That revenue is necessary for a balanced budget. By implementing this program, the state would have to cut funding from other areas. As a Wisconsin resident for the past 18 years, I have seen my fair share of budget cuts and how it affects my community and me personally. I do not want to see another ten million cut just so I can save fifteen dollars on notebooks and a new pair of jeans.
Another flawed aspect of the plan is how does one determine if the purchases are for school supplies? Is that new sweatshirt for school? How about Dad?s new computer? Should that be considered back-to-school? It is virtually impossible. This being the case then, it becomes a tax break for everyone, not just families. Also, the spending limits are troubling. What if a better quality computer is $1,600? Is it fair then that such a discount only applies to certain items, benefiting certain families? The argument has also been made that such a plan would encourage our neighbors in Illinois, Minnesota and Michigan to cross the border, thus helping Wisconsin retailers. I find this to be incredibly weak, as the cost of gas for nonresidents would most likely outweigh the money saved with this tax holiday. Furthermore, there is no sales tax on clothing purchased in Minnesota, so there is even less incentive for those residents to travel to Wisconsin for a tax holiday.
Wisconsin state lawmakers have been toying with such an idea for some time; it is not a new phenomenon suddenly surfacing in this election year. The truth of the matter is that such a plan has been brought up before, but no action was ever taken. It seems that I am not the only one who feels that this proposal is too flawed to be taken seriously.