With the state of the economy on the minds of Wisconsin elected officials and citizens alike, state Sen. Jon Erpenbach, D-Middleton, announced his plan to eliminate sales tax exemptions in an effort to return money to residents.
Specifically, his plan will cancel all tax exemptions that many businesses and professionals currently hold, excluding exemptions on food, drugs, health care and other basic life necessities.
""The plan generates enough money to get schools off the property tax,"" Erpenbach said. ""Some people would be paying a sales tax on things they're not used to paying, but at the end of the day, if the numbers work out right, people are going to have more money in their pocket under this idea then they do right now.""
Erpenbach said the biggest opposition to this plan will come from special interests who have previously been exempt from these taxes.
According to Mike McCabe, executive director of Wisconsin Democracy Campaign, special interests will have tremendous influence on how this plan proceeds.
""They've poured a lot of money into elections and into lobbying to get those exemptions written into law, and they'll fight tooth and nail against any effort to roll them back,"" McCabe said.
Wisconsin Manufactures & Commerce, the state's largest business group, is one of these special interests that said this plan will hurt all Wisconsin residents.
""We're a state that pays the sixth highest taxes in the country, and we should be focused on lowering taxes, not raising taxes,"" said Jeff Schoepke, director of tax and corporate policy at WMC.
Schoepke said these exemptions were agreed upon when the sales tax was established in 1962 because it was generally accepted that taxing certain services would hurt the Wisconsin business climate.
""We aren't talking about closing loopholes, these are taxes on goods and services, taxes that have not been levied before,"" Schoepke said.
These plans remain in the beginning stages, and Erpenbach said the details will not be finished for another month.
""Ultimately, it's good that we're having an honest and public debate on this matter,"" Schoepke said.
It is unclear if Gov. Jim Doyle would lend his support to Erpenbach's plan. If legislation were to reach the governor's desk, Doyle spokesperson Matt Canter said the governor would have to carefully review a proposal before making any decisions.
