Browsing: Economic Development

When Wisconsin Manufacturers and Commerce, the state’s business chamber, last month put out the results of its semiannual survey of CEOs’ sentiments, the outlook was grim: 22% rated the Wisconsin economy as “strong.” Only 10% said the same of the national economy, with 28% calling it “weak.” That’s a gloomier number than the WMC found in summer 2020, amid lockdowns.

The Badger Institute supports a flat-rate individual income tax, a structure increasingly adopted by competing states. We have spent years researching options for reform that includes a single, low rate. But if that is out of the question as budget negotiations proceed, the priority should be Wisconsin’s top rate.

America is choosing sides and Wisconsin — given the lurch to the left along its borders — can greatly benefit.

Minnesota, Illinois and Michigan are all now among America’s 17 thoroughly blue states where Democrats control both chambers of the legislature as well as the governor’s mansion. We are just one of 11 states with divided government, according to Ballotpedia, and Iowa is one of 22 states that is totally red.

Wisconsin’s economy shows some worrisome signs in top-line economic output and some positive trends, such as fairly large net migration from other Midwestern states, both in people and in income. And while the Badger State’s fiscal and regulatory policy mix is closer to the norm among states than it was even a decade ago, there is a clear need for additional reforms.

Wisconsin Senate Majority Leader Devin LeMahieu has introduced a plan to transition over four years to a flat 3.25% individual income tax from the current four-bracket structure with a top rate of 7.65%.

He discussed the plan in this office in the Capitol Wednesday with Badger Institute President Mike Nichols in this week’s edition of the Institute’s Free Exchange podcast.

My hope for 2023 is that every legislator in Madison will talk to somebody in their district who lost their small business or their job, and ask why.

Shouldn’t be hard to find them.

Between March of 2020 and March of 2021 — the last period of time for which I could find data — 17,364 Wisconsin establishments opened and 13,698 closed, according to the U.S. Small Business Administration. Almost all of those were small businesses.

Scholars like Morris Kleiner at the University of Minnesota have found that licensing creates barriers to entry into the field, especially for low-income aspirants; reduces employment and competition; inflates prices and the wages of licensed workers; stifles innovation; and limits mobility.