The study released Wednesday by the Institute for Wisconsin's Future, a Democratic-leaning group founded in 1994 and based in Milwaukee, concludes that too many of Wisconsin's biggest profit-makers are underpaying taxes when compared with their counterparts in other states.,”

MADISON (AP) – If Wisconsin businesses would pay the national average in state and local taxes, an additional $1.3 billion would flow to school districts, fire departments and other governmental services, a new report concluded.

The study released Wednesday by the Institute for Wisconsin's Future, a Democratic-leaning group founded in 1994 and based in Milwaukee, concludes that too many of Wisconsin's biggest profit-makers are underpaying taxes when compared with their counterparts in other states.

But Jeff Schoepke, director of tax and corporate policy for Wisconsin Manufacturers and Commerce, the state's largest business group, said taxes on its members are high enough and any increase would be passed on to shareholders and consumers.

Wisconsin businesses pay 35 percent of all state taxes, the study said, citing data compiled by accounting firm Ernst & Young. The nationwide average was 40 percent, the report said, and if Wisconsin raised corporate taxes to match that level, it would mean an additional $800 million in state revenue.

That additional money could either be used to lower the share of the tax burden paid by individuals or be added to the total tax collection, said the study's author, Jack Norman.

"If this were taken to be additional money, the pie gets bigger, and it would be useful for these other things," Norman said.

When it comes to local taxes, Wisconsin businesses pay 47 percent compared with the national average of 52 percent, the study said also relying on Ernst & Young data. It would take Wisconsin businesses another $520 million to come up to the national average, the study said.

The share of total taxes paid by businesses in the state is 39.3 percent, which makes it 41st lowest, according to Ernst & Young. The lowest state was Connecticut at 34.3 percent, while Alaska was the highest at 82.1 percent.

Norman's report recommends that Wisconsin adopt a combined reporting approach to corporate taxes already in place in 17 states. Under that approach, all profits from a corporation, including out-of-state subsidiaries, would be used when calculating the tax payable in Wisconsin. Doing that, Norman said, would close loopholes that currently allow companies to shift profits to subsidiaries in states where taxes may be less than in Wisconsin.

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