Personal Property Taxes Unfair To Businesses
Under current law, businesses – not individuals – pay property taxes on goods, equipment, and machinery they need to make a living. According to the Department of Revenue about 2% of the statewide property tax comes from the personal property tax on businesses.
From the state’s standpoint, this doesn’t affect state revenue. Or does it? Small businesses, like the tavern on the corner, the restaurant two blocks over, the work-out gym, the body shop, fast food shop, and your lawyer’s office all pay personal property taxes on the goods, books, desks, equipment, stoves, chillers, dispensers, display racks, they need to make a living. In many cases, the personal property tax they pay is more than their real estate taxes.
What does the value of the grill, fryer, tap line in your restaurant/bar have to do with the cost of educating your children? It generates income, not just to pay the cost of educating your own children, but educating everybody’s children. On the other hand, the more the taxes on your grill take out of your profits, the less income tax you have to pay for everybody else’s education. The less you can pay your employees and the fewer you can employ. The less taxes they can pay.
It’s not a matter of fairness. It’s a simple matter of economics, the more businesses pay for the things they need to make a living, the less they can pay for wages and the other costs of doing business.
Want more small businesses? Want more small business employers to invest more in more employees? Stop charging businesses for investing in goods and equipment essential to making a living.
Let’s get practical. Why should Ball’s Body Shop be taxed on their spray-painting equipment to pay for Madison Public Schools? Why shouldn’t individual taxpayers pay to educate their own children? In fact, why shouldn’t Ball employees be paid better so they can afford to pay to educate their own children?
As we are beginning to recover economically: Maybe now is the time to ask ourselves “How can we stimulate the growth of jobs in the small – and large- business sector?
In Wisconsin, I believe our long-range success lies in reducing impediments to profitability–especially focused on taxing everybody, including small business owners – not on what they need to earn a living – but on what they earn. PERIOD.
As has often been said, but ignored, it’s not what you need to make a living, it’s what you earn (not what you own) that should determine what you can afford to make life better for all of us.
NOTES: Taxable Business Personal property represents about 2% of statewide taxable property. Exempt privately owned property equals about 2% of statewide taxable property.
Don’t want to overload this, Linda, but this is just the beginning. What my bosses and I are looking for is to start the ball rolling : a simple draft to eliminate the personal property tax in Wisconsin, period. It’s a job booster. It would shift 2% of property tax to the remaining 98% of property taxpayers.
I HAVEN’T ASKED ANYBODY ELSE. But. I can’t think of a business entity from WMC, NFIB, WIB, Farm Bureau, or Farmers Union who would object. We could at least draft the thing and then ask for comments. PS. This would be the first effort to rescind a tax I can recall.