Lt. Governor Asks About Raising Sales Tax to Reduce Income Tax - WBAY

Lt. Governor Asks About Raising Sales Tax to Reduce Income Tax

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Green Bay -

Lt. Governor Rebecca Kleefisch asked a group in Green Bay Tuesday what excites them about tax reform.

Not necessarily two peas in a pod, the governor's administration is on a statewide tour, possibly on the verge of big tax reforms if Governor Walker has his way.

One idea being thrown around is reducing or eliminating the state's income tax.

"We need your guidance, and that's what these tax reform roundtables are all about," Kleefisch told the group of farmers, business owners, accountants and veterans at Northeast Wisconsin Technical College.

Seven states nationwide don't have an income tax at all - Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.

New Hampshire and Tennessee only tax on certain amounts of dividend and interest income.

In return, these states find revenue elsewhere.

"For instances, Texas has oil and gas revenue," Richard Chandler said, secretary of the Department of Revenue. "Florida has substantial tourism revenues. Nevada has gaming revenue."

In Wisconsin, the administration says 53% of the state's general fund comes from the state income tax.

If you reduce that, some argue, it could be made up by an increase in sales tax.

Census bureau data, cited by the administration, shows between 2010-2011 the state's sales tax was 16% below the national average.

In reverse, the state's income tax was 28% higher than the national average.

"We've obviously got to find a way to fund road repairs and fund schools," Kleefisch said. "And so government does need revenue. And on the other hand people want to pay less in taxes. They want to keep more of their money."

State Democrats call the administration's tax reform push backwards.

"There's no other way to look at the elimination of an income tax, and having it replaced by a sales tax, is anything other than an attack on the working poor," Mike Tate said, chair of the state Democratic party.

The administration cautions any proposal is in its infant stage.

"Whether that becomes the solution on tax reform, I can't tell you at this point," Kleefisch said. "We need to see more people's reaction to this."

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