Tax Analysts Blog

The Tax Reform Debate...for a Limited Few in Wisconsin

Posted on Dec 18, 2013

Wisconsin Lt. Gov. Rebecca Kleefisch (R) and Revenue Secretary Rick Chandler, at the request of Gov. Scott Walker (R), announced a series of roundtable discussions around the state “to start a conversation with Wisconsinites and gather information and input from taxpayers on the real impact of Wisconsin taxes in consideration of future tax reform.” Unfortunately for Wisconsinites who weren't in attendance, there is no way to know what was said at the first roundtable because the discussion was closed to the press.

What was advertised as an “outstanding opportunity for the hardworking taxpayers” to engage in discussions about tax reform are also closed to the public. Entry to the roundtables is by invite only. After the first roundtable, which was held on December 9 at Beloit College, Casey Himbauch, chief of staff for Kleefisch, said this is “standard operating procedure” when discussions include business leaders, so as to “allow the participants to speak freely without worrying about what they have to say.”

Perhaps Kleefisch didn’t think this all the way through because closing the discussions was a bad decision. First, it sends the message that the administration is willing to let business leaders drive tax reform. While business leaders and trade associations should be vital contributors to a dialogue about tax reform, the discussion should not specifically exclude the public or the press.

Making tax proposals available to the public and opening up a dialogue with affected taxpayers can be eye-opening for people who will eventually have to develop and administer the proposal. If tax legislation is enacted, those who wrote the legislation, those who will enforce it, and those who will be affected by it should all understand what the legislation was designed to do.

In other words, the people of Wisconsin deserve a transparent tax system, including a transparent legislative and regulatory process. Granted, roundtable discussions about tax reform are early in that process. But closing the meetings sets the precedent that it is acceptable to have meetings behind closed doors and that it’s acceptable to pick and choose who has a voice in the tax reform debate. Walker and his administration should know better.

Read Comments (1)

bob kammanDec 18, 2013

Did they invite Home Depot executives? I'm surprised no one has picked up on
the recent Arizona appeals court decision that, no, Home Depot could not
attribute more than half its profits to a subsidiary to which it had assigned
all of its trade names. The subsidiary, of course, did not do business in
Arizona. Well, at least that's what Home Depot hoped to convince the court.

The fun part of this decision is that Home Depot's lawyers several years ago
had filed an amicus brief with the same court, in a case where the printing
company Donnelley had done the same thing and lost. Donnelley's trademark
subsidiary received all of its income from its parent. The friendly Home Depot
lawyers told the court that this was completely different from what their
company does. Home Depot, they told the court and the court cited, received
$12 million a year from companies other than Home Depot. When its own case
came before the same court, though, it was discovered that amount was only
about 1% of the subsidiary's revenue. The other 99% came from the parent.

There has been much discussion lately of how multinational corporations move
profits around internationally to avoid high tax rates. Not so much, about how
multistate corporations do the same thing.

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