Saturday, May 29, 2010

Combined Reporting

Local media, Republican legislators, and business blowhards are doing all they can to inflate the idea of onerous taxation possibly pushing Harley-Davidson from Wisconsin.

Some things never change.

They won't be happy until they [business] no longer pay taxes. (Even then, I'm not so sure.) This time, the culprit is combined reporting.

The Journal, alongside their co-conspirators, would have us believe combined reporting is an anomaly, a burdensome taxation specific to Wisconsin. Yet, combined reporting is a practice common among the majority of states.

Businesses typically create subsidiaries (in low-tax states) and allocate profits to such to avoid taxation. The New Rules Project has a great summary of this scheme and swindle.

In February 2009 the Institute for Wisconsin's Future released a report chronicling the tax avoidance and nefarious intentions which combined reporting would end for Wisconsin businesses.

Harley-Davidson paid no state income tax in 2007. So, we have a large corporation paying no state income tax, yet, some want to claim taxation is making them less competitive. Add this to the fact that the State of Wisconsin gave Harley-Davidson $4.5 million in 2006. The City of Milwaukee has given the company $868,000; while Tomahawk has given the company $3,042,000. From 2000 through 2006, Harley-Davidson had received $3,910,000 from the Wisconsin Department of Commerce.

Not only does the tax burden on Harley-Davidson seem to be minimal, the State (along with certain localities) is subsidizing the company. These hand-outs and favorable tax treatment are the case for Harley-Davidson operations in other states, too. The company also has no qualms about asking the Feds for "help," either.

One interesting tactic the Mayor or the Governor could use in exposing this bribery is televising the discussion with company executives. (All economic development discussions using public dollars should be televised to expose these toxic dealings to the light of day.) If an executive (or one of the anti-tax crusaders) could justify, on camera, why they should not pay their fair share of all means, don't pay. I just want to, finally, hear a plausible explanation.

For Further Reading:
Class Warfare
Doyle Says Combined Reporting Not To Blame For Harley's Woes
Falsehood Fabrication
Legalized Bribery
Luring Lunacy
Miller Pork
Site Selection Shenanigans
Spuriously Invoking The Tax Boogeyman
Welcome to Walmart

1 comment:

xoff said...

In fairness, it is not Harley but the no-tax-on-anything-ever crowd that is blaming combined reporting for Harley's troubles. The company itself doesn't make that claim.