I was reading the latest edition of The Darwin Awards recently. As we know, The Darwin Award honors those who improved the species … by accidentally removing themselves from it.
The stories recount some truly remarkably stupid stunts performed by apparently remarkably stupid people. With the governor and Senate Democrats passing a budget "fix" with more taxes on businesses and hospitals, I would suggest we create our own version of the award – The Darwin Smith Awards.
Darwin Smith was the CEO of Kimberly-Clark in the 70’s and 80’s. K-C became the world’s No. 1 paper-based consumer products company under his watch. The corporate headquarters was located in Neenah. The State of Wisconsin was spending more than they collected at the time.
Smith warned then-Gov. Tony Earl that his plan to increase taxes on business was putting the state at a competitive disadvantage with other, more tax and business friendly, states. In 1985, Smith moved the K-C corporate headquarters to Dallas. There is no corporate or personal income tax in Texas. It’s unconstitutional there.
Milton Friedman was fond of pointing out that corporations don’t pay taxes; only people pay taxes. Corporations are, however, extremely effective tax-collecting machines for governments. Sales taxes, income taxes, property taxes, etc. are all simply pass-through collections from end users, i.e. people.
As Friedman also noted, if raising taxes was the cure for budget deficits, there wouldn’t be any $600 million shortfall – because we have been raising all sorts of taxes for about 100 years. The State of Wisconsin currently takes approximately $25 billion annually. Wouldn’t that seem to be enough?
To show just how disingenuous these folks are, they added $200 million in new spending for the commuter rail in the so-called $600 million "budget fix." They plan to pay for it with another tax on business. This time it is the rental car companies that are expected to be the tax collectors with a 750-percent sales tax increase on rent-a-car customers.
The Metropolitan Milwaukee Association of Commerce and Wisconsin Manufacturers & Commerce deserve special Darwin Smith Award mention for their support of the $400 million hospital tax increase. Actually, the MMAC could be nominated in two categories, considering their unwavering support of commuter rail and the taxes necessary to fund these excesses.
My guess is Darwin Smith would have favored a constitutional amendment such as the Taxpayer Bill of Rights to simply limit tax increases of all levels of government to the increases in growth and inflation. With a potential downturn in the economy on the horizon, we are sure to hear more wailing from governor and Senate Democrats about not having enough money to spend due to decreases in tax collections.
Get more Darwin Smith Awards ready. More taxes can’t be far behind. How many more businesses need to be culled from the Wisconsin gene pool before we learn?
Dennis Ellmaurer is a principal of Globe National Corp., a Milwaukee firm working exclusively with sellers of small businesses in southeastern Wisconsin. Ellmaurer also is a chairman of The Executive Committee, facilitating three CEO groups in southeastern Wisconsin.
