Wisconsin Gov. Promises To Use Internet Sales Tax To Lower Income Tax

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It sounds like a nice idea, if you don’t own a calculator. The governor of Wisconsin wants to give his residents a tax break, using the revenue from a proposed Internet Sales tax to lower the state’s income tax. “I want to make clear, should federal Marketplace legislation become law, my intention would be for any resulting additional revenue be used to provide individual income tax relief for Wisconsin’s taxpayers,” Wrote Governor Scott Walker to members of Congress.

The Marketplace Fairness Act will permit state governments to collect sales taxes from any business that both grosses more than $1M in revenue and has a substantial operating base in their region. Earlier this month, a draft of the bill passed the U.S. Senate with overwhelming bipartisan support, but faces tougher opposition in the House, where Republican leadership is concerned that the law will be a logistical nightmare for small businesses.

Although, I wouldn’t get too excited. With 5 million residents in Wisconsin and an estimated $95M in savings, that’s about $16/per person, assuming it would be distributed evenly. If Forrester’s research is any indication, the sales tax would cost the average American roughly $167 per year, so it’s a net loss. If it’s unevenly distributed, a few already wealthy people will be slightly wealthier.

Still, it’s a nice gesture.