Scott Walker Demonstrates his lack of Economic Competency

Today in his so called State of the County address, Milwaukee County Executive Scott Walker proposed some really peculiar uses of the economic stimulus money slated for Milwaukee County and the State of Wisconsin.

In it he proposed this;

Walker said $3.2 billion of the estimated $3.5 billion the state is expected to receive in stimulus aid should be used to offset the state's 5% sales tax starting March 1. That would translate into some $3,000 in saving for the average family.

"I just want something that's going to work," to get the economy moving again, Walker said. The sales tax hiatus could prove to be a bonanza for Wisconsin merchants if residents from neighboring states flocked to Wisconsin for purchases of cars, appliances and other big-ticket items, he said.

That’s interesting; the average family in Wisconsin will save $3,000? Here Scott Walker reveals his lack of knowledge of the tax law and the understanding of the Average Wisconsin family, Joe Wineke chair of the Democratic Party of Wisconsin;

Redirecting federal stimulus money towards a sales tax holiday would be impossible under the law. Furthermore, Walker’s crazy claim that the sales tax holiday would translate into $3,000 in savings for the average family assumes that each household will go out and spend $60,000 on taxable goods. What ‘average’ family has that kind of disposable income?

And as far as residence in neighboring states flocking over here to purchase those big ticket items, The Recess Supervisor articulates how this would be impractical;

First of all, state use tax laws typically require that a consumer who resides in a state pay tax on any untaxed item that is brought into the state for use in that state. That means that people from Illinois who come to plunder Wisconsin's stores would legally owe use tax on that to Illinois. So unless Scott Walker is encouraging people to break the law, folks from Illinois would come to Wisconsin, buy stuff here, and then pay the tax to Illinois. Brilliant!

Furthermore, let's consider Walker's specific mention of vehicle purchases. Most states require proof that tax has been paid on a new vehicle when the vehicle is imported and titled in your home state. Otherwise, guess what? You have to pay the difference to your state of residence! Such is the case in Illinois, for instance, unless you leave the vehicle out of the state for 90 days prior to import. It is always the case in Minnesota when a resident purchases a vehicle out-of-state. Does Walker think dealers in Racine are going to sell cars to Illinois residents on lay-a-way?Besides that, the feds are already ponying up to refund sales tax payments on new vehicle purchases. So in Walker's example, Wisconsin would collect no tax, Illinois or Minnesota would, and the consumer would have their state sales tax refunded to them by the federal government. Illinois and Minnesota win! Wisconsin loses! Yay stimulus!

Scott Walker has clearly shown that he lacks the ability to solve the problems that are facing Wisconsin and Milwaukee County. He has also demonstrated that he lacks the basic understanding of economics and tax laws.