December: Law inhibits tax policy discussion

2006 Columns

This is the story of a bizarre state law that mocks the notion of “public information.”

It’s about taxes. We need them. We hate them. We debate them. But often this debate is light on facts and heavy on spin and propaganda.

One perennial question is how Wisconsin business taxes compare with those in other states. Some say Wisconsin’s overall business-tax burden is lighter. Others complain that Wisconsin is a high-tax state in general and a high-business-tax state in particular.

I was looking for data to shed light on the controversy. I work for the Institute for Wisconsin’s Future, a Milwaukee-based nonprofit devoted to research and public education.

In Wisconsin, unlike most states, company-specific corporate income tax data is publicly available. You can learn what Company X paid in state income tax in a given year. Requests are made on the Department of Revenue’s form P-100, formally known as, “Application to ascertain Wisconsin net income tax reported as paid or payable.”

Form P-100 doesn’t give access to a tax return itself, nor to any information from the return except the bottom line: “Net income tax reported as paid or payable.”

There are some hurdles: The name and address on form P-100 must exactly match those on the return; there is a $4 fee; a reason must be given; the form must be notarized; and the target of the inquiry is told who obtained this information and why.

The biggest obstacle, though, was the requirement that I “affirm and declare that I understand the provisions of Section 71.78(2) of the statutes relating to the divulgement, publication, or dissemination of information obtained.”

This sent me to the statute books, and to a big surprise. We have a public right to the information. But “no person may divulge or circulate” the information obtained.

There are two exceptions. First: “This subsection does not prohibit publication by any newspaper of information lawfully derived from such returns.” Second: Neither does it prohibit “any public speaker from referring to such information in any address.”

After making hundreds of P-100 requests and paying thousands of dollars in fees, I was armed with loads of data, some very relevant to the public debate.

For example, a few years ago, state media disclosed the “Nevada loophole” used by banks to shelter Wisconsin profits in Nevada subsidiaries, avoiding state income tax. The state eventually settled with scores of banks, but kept settlement details secret. Using P-100, I had details of settlements.

But how to get the information out? Not being a newspaper, I couldn’t publish it. And I couldn’t impart it orally to colleagues or reporters or legislators in a meeting or a phone call, because those aren’t “public addresses.”

And so, on Dec. 4, 2006, I gave three public addresses, in various cities. The press was invited to each.

At these events, I provided printed lists of companies with blanks next to them. During the oral presentation, I went through the lists, reading the tax numbers aloud, giving the audience time to write each dollar figure by each company’s name.

Then I relied on newspapers to print the numbers. What they chose to print would be in the public domain, repeatable and publishable.

Thanks to the newspapers, I can now write, for example, that Johnson Controls Inc., the state’s largest company, paid no corporate income tax in 2003. I can write that 60% of the companies represented on the board of directors of Wisconsin Manufacturers & Commerce-which leads the fight against what it calls “excessive corporate taxation”-also paid no corporate income tax.

But what a bizarre dance to endure. What a cumbersome law that requires, as a matter of law, that to get information to legislators, taxpayers and voters, you must give a public speech and hope some newspaper prints what you say.

Taxes are the investments that keep our public infrastructures healthy. We need informed, intelligent discussion of tax policy. We need to rewrite this silly law to strengthen the public’s right to know.

Your Right to Know is produced by the Wisconsin Freedom of Information Council, devoted to protecting public access to meetings and records. Jack Norman is research director at the Institute for Wisconsin’s Future, www.wisconsinsfuture.org