Christian Schneider

Author, Columnist

Translating the Senate Budget

On Monday, Wisconsin Senate Majority Leader Russ said he was committed to retaining a tax on “big oil,” along with a dubious provision that prevents those oil companies from passing the tax on to drivers.  On Wednesday, the Senate unveiled their version of the budget, which completely eliminates the tax altogether.

You may say to yourself, “self, that doesn’t make any sense.”  Why would Decker so quickly abandon a lynchpin of his budget?  He really just realized on Tuesday that he couldn’t stop the oil companies from passing the tax through to consumers?  WPRI wrote our report saying exactly that in March of 2007 – it’s good to see him admit that he should have listened to us all along.

Here’s why – he merely needed to give a couple of his members a vote without the tax in it.  It’s coming back – you can bank on it.

Decker replaced the funding from the oil tax by eliminating the tax exemption for capital gains.  This is, simply put, insane.  It amounts to a $485 million tax increase on the middle class, many of whom have been waiting to cash out their retirement funds, and completely blows any argument Democrats have that this budget somehow only affects the rich.

But by replacing one unpopular tax increase with another even more unpopular tax increase, Decker will be able to argue that he’s somehow doing taxpayers a favor when he re-implements the original oil company proposal in the conference committee version of the budget as crafted by the leaders of the two houses.  Eventually, the Legislature will end up either where Governor Doyle and Decker were (with the no-pass through provision) or where the Assembly was, allowing oil companies to pass it through to consumers.

In positing this theory, I’m giving Decker a lot of credit for his political cunning.  But if I’m wrong and he’s actually serious about jacking up taxes on peoples’ retirement accounts during a recession, then he’s the most tin-eared politician alive.


  1. I’ll take Door #3 – both taxes survive. They are that tin-eared.

  2. Most of the middle-class has their retirement investments in things like 401(k)s and IRAs. This doesn’t affect those investments at all. You don’t pay capital gains on those investments.

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