Politics & Government
11:13 am
Fri December 20, 2013

Could New "Consumption Tax" Replace Wisconsin's State Income Tax?

Governor Scott Walker has directed state officials to hold private conversations across the state about changing the tax code.
Credit Mark Wilson/Getty Images

Todd Berry of the Wisconsin Taxpayers Alliance says the state may need to implement an expanded form of sales tax if state officials seek to shed income tax.

Wisconsin is one of several states contemplating an end to personal and corporate income taxes.

The President of the Wisconsin Taxpayers Alliance says Wisconsin officials might want to study how the state of Washington collects revenue.  Todd Berry says Washington has no income tax and instead uses a "consumption" style tax to garner the money it needs to fund operations such as health care, education and corrections.

"Two of the biggees when in comes to consumer goods are food and motor fuel," Berry says.

He says there are also a host of services that are not currently taxed in Wisconsin.

"Home repair and remodeling services, various kinds of professional services, conceivably even home sales," Berry says.

Berry says if the state relied only on the existing sales tax without expanding collections to other forms of consumer goods, Wisconsin officials would need to triple the current percentage.

"It's five percent now, it would go well into the teens," Berry says.

Governor Scott Walker has directed state officials to hold private conversations across the state about changing the tax code. Walker

The Wisconsin Taxpayers Alliance says individual and corporate income taxes accounted for more than $8 billion in revenue last year.