Wis business lobby's cluelessness exposed on costly business tax giveaway

The damage of 5 years of trickle-down failure in Fitzwalkerstan keeps on piling up, with the latest example being exhibited in an article today in the Capital Times. This article discusses the Manufacturing and Agriculture (M&A) tax credit, a targeted giveaway to business interests that has become exponentially larger in recent years, with the write-off of "eligible qualified production activities income" going from 1.875% in 2013 to 7.5% this year. That’s not 7.5% of a company’s taxes, that’s 7.5% of their INCOME, basically allowing them to avoid paying almost any tax.

The Cap Times’ Katelyn Ferral shows the contrast between what corporate interests think about the M&A tax cut, and why others aren’t so keen on it.

The credit is among the broadest on the books in Wisconsin and has drawn ire from those who say it boosts the state’s richest at the cost of investing in other public services including universities and roads. It is widely heralded among businesses groups who say it has given the state an advantage in attracting job-creators to the state’s largest industry sector and enabled businesses to grow.

“This allows (manufacturers) to compete effectively by essentially allowing them to operate tax free in Wisconsin and that’s a great incentive for companies to stay here, it’s a great selling point,” said Steve Baas, senior vice president for governmental affairs at the Metropolitan Milwaukee Association of Commerce, which represents 1,600 businesses and works to attract companies to the state’s manufacturing hub. “As we’re marketing the region, this is one of the things we lead with.”

But in the three years since the credit was implemented, the increase in manufacturing jobs in the state has been negligible. According to data from the state Department of Workforce Development, there was a 2.7 percent increase in manufacturing jobs since the credit has been in place. The number of jobs increased from from 455,576 in 2013 to 468,600 jobs in 2015.

The lack of a significant increase in jobs numbers highlights the credit’s inequity for Wisconsin taxpayers, said state Rep. Dianne Hesselbein, D-Middleton, who has called for an effort in the Legislature to repeal the credit during the next session.

“It’s an unfair tax policy because it picks winners and losers. It favors manufacturers and farm owners over all other kinds of business,” she said. “We need to shut down this credit in the coming budget. Five years of free money is enough.”

Gee, you wonder how this state lags with economic geniuses like Steve Baas and the oligarchs at the MMAC leading the way?

No wonder Wisconsin is last in the country in start-up activity with this mentality, favoring established and politically connected companies over newer ones who might actually do better at the job. And cutting taxes on businesses encourages cash-hoarding and speculation over investment, which may help explain why Wisconsin continued to have some of the worst job growth in the Midwest in 2015, despite the growth of the M&A tax break.

And while the M&A credit has started up and increased between 2013 and today, Wisconsin has also started to see tax revenue shortfalls emerge. Those shortfalls have led to cuts in public K-12 and higher education, and cuts in aids to local governments that have led to deteriorating infrastructure and a lower quality of life. In addition, anti-worker policies like (right-to) work-for-less get thrown into the mix, and how can Wisconsin grow and maintain the talent base necessary to keep up with other places that invest in education and pay better wages?

So now lobbyists like Steve Baas and the mediocre MMAC businessMEN that he represents are whining about an alleged “skills gap”, and lack of talent available for their businesses. Maybe these guys should spend less time cozying up to Scott Walker and Rebecca Kleefisch at the Capitol for tax write-offs and union-busting, and use more time building up and innovating in their businesses, paying their employees a fair wage, and trying to encourage policies that make people want to work and live in Wisconsin. Just a thought.