The top two most interesting developments you should know about the past week include the implementation of yet another new tax and the exposure of troubling problems with the state's childcare system.
First, it is important to point out that yet another tax hike took effect Oct. 1. Dubbed the "iPod tax," this new tax was part of the 2009-11 state budget, which was enacted this summer, despite much controversy and my staunch opposition.
The new tax will result in an estimated $11 million tax hike on computer users and employers who sell their products online. Specifically, the iPod tax will be imposed as a 5 percent tax on purchases of digital goods and services including online music, movies, games and books. This means there will be $11 million less for employers to create jobs and for families to help meet their monthly budgets.
The tax hike comes as the latest in a series of nearly $5 billion in tax and fee increases, which were included in budget bills passed this legislative session. Just last month families started seeing higher auto insurance rates and phone bills due to provisions in the state budget. I do not support any of these tax increases and feel strongly that it is the wrong time to be asking for more money out of the pockets of businesses and families across the state. This will do nothing to help foster our state's economic recovery.
In addition, it is not clear if the state has the legal authority to implement the new tax, since the Internet is considered interstate commerce. In fact, North Dakota's governor enacted a law explicitly exempting digital goods from taxes. We should be emulating this policy instead of increasing the tax burden and making Wisconsin less attractive for employers to do business.
Also last week, I signed on as a cosponsor of a bill designed to institute much-needed reforms to the Wisconsin Shares program and our child care licensing system. The bill, which will implement better protections for both children and taxpayers, is much needed after continual reports of fraud, abuse and irresponsible policies taking place in Wisconsin's childcare programs.
As you may know, the Legislative Audit Bureau (LAB) and the Milwaukee Journal Sentinel (MJS) have uncovered a host of problems with the Wisconsin Shares Childcare Program, mostly in the Milwaukee area, which include extreme fraudulent activity by participants and dangerous individuals involved in the program.
For example, the LAB revealed the program cost taxpayers $22.5 million in overpayments to ineligible child care providers in 2008 alone, including almost $3 million in fraud in one individual case. On top of this, the MJS has discovered nearly 500 child care providers had criminal records, and a recent investigation by the LAB found that four convicted sex offenders resided at addresses registered to child care providers.
The current status of the $350 million program is embarrassing to our state, costly to our taxpayers, and dangerous for our children. In response, the bill I have signed onto will implement the much-needed reforms that the Wisconsin Shares Program and our childcare system needs. Specifically, the bill will create a variety of prohibitions barring criminals from becoming licensed, implement background checks of providers conducted by the Department of Children and Families, and require government employees and participants to report to law enforcement any suspected fraud in the system.
I am hopeful this bill will gain bipartisan support and be passed into law quickly to ensure these common-sense reforms are enacted to protect our children and the taxpayers of our state.
I want to hear from you, so please feel welcome to express your thoughts or let me know if I can be helpful to you in any way by calling (888) 534-0080, e-mailing me at Rep.Davis@legis.wi.gov or by writing or stopping by 11 West, State Capitol, Madison, WI 53708.
- Rep. Brett Davis, R-Oregon, serves the 80th Assembly District, which includes all of Green County and parts of Lafayette, Rock and Dane counties.
First, it is important to point out that yet another tax hike took effect Oct. 1. Dubbed the "iPod tax," this new tax was part of the 2009-11 state budget, which was enacted this summer, despite much controversy and my staunch opposition.
The new tax will result in an estimated $11 million tax hike on computer users and employers who sell their products online. Specifically, the iPod tax will be imposed as a 5 percent tax on purchases of digital goods and services including online music, movies, games and books. This means there will be $11 million less for employers to create jobs and for families to help meet their monthly budgets.
The tax hike comes as the latest in a series of nearly $5 billion in tax and fee increases, which were included in budget bills passed this legislative session. Just last month families started seeing higher auto insurance rates and phone bills due to provisions in the state budget. I do not support any of these tax increases and feel strongly that it is the wrong time to be asking for more money out of the pockets of businesses and families across the state. This will do nothing to help foster our state's economic recovery.
In addition, it is not clear if the state has the legal authority to implement the new tax, since the Internet is considered interstate commerce. In fact, North Dakota's governor enacted a law explicitly exempting digital goods from taxes. We should be emulating this policy instead of increasing the tax burden and making Wisconsin less attractive for employers to do business.
Also last week, I signed on as a cosponsor of a bill designed to institute much-needed reforms to the Wisconsin Shares program and our child care licensing system. The bill, which will implement better protections for both children and taxpayers, is much needed after continual reports of fraud, abuse and irresponsible policies taking place in Wisconsin's childcare programs.
As you may know, the Legislative Audit Bureau (LAB) and the Milwaukee Journal Sentinel (MJS) have uncovered a host of problems with the Wisconsin Shares Childcare Program, mostly in the Milwaukee area, which include extreme fraudulent activity by participants and dangerous individuals involved in the program.
For example, the LAB revealed the program cost taxpayers $22.5 million in overpayments to ineligible child care providers in 2008 alone, including almost $3 million in fraud in one individual case. On top of this, the MJS has discovered nearly 500 child care providers had criminal records, and a recent investigation by the LAB found that four convicted sex offenders resided at addresses registered to child care providers.
The current status of the $350 million program is embarrassing to our state, costly to our taxpayers, and dangerous for our children. In response, the bill I have signed onto will implement the much-needed reforms that the Wisconsin Shares Program and our childcare system needs. Specifically, the bill will create a variety of prohibitions barring criminals from becoming licensed, implement background checks of providers conducted by the Department of Children and Families, and require government employees and participants to report to law enforcement any suspected fraud in the system.
I am hopeful this bill will gain bipartisan support and be passed into law quickly to ensure these common-sense reforms are enacted to protect our children and the taxpayers of our state.
I want to hear from you, so please feel welcome to express your thoughts or let me know if I can be helpful to you in any way by calling (888) 534-0080, e-mailing me at Rep.Davis@legis.wi.gov or by writing or stopping by 11 West, State Capitol, Madison, WI 53708.
- Rep. Brett Davis, R-Oregon, serves the 80th Assembly District, which includes all of Green County and parts of Lafayette, Rock and Dane counties.
