Wednesday, July 6, 2016

More proof that "manufacturers" tax credit doesn't create jobs

Gotta appreciate State Sen. Janet Bewley and the Legislative Dems staying on the issue of “The Big Giveaway” known as the Manufacturers and Agriculture Tax Credit, and shooting down absurd claims by right-wing hacks along the way.

Bewley responded today to an absurd bit of spin by Scott Manley, head lobbyist for the Mediocre Businessmen’s Association Wisconsin Manufacturers and Commerce, where he implied that Bush’s Great Recession had nothing to do with Wisconsin’s economic struggles in the late 2000s.
"The Manufacturing & Agriculture Credit is growing and sustaining middle class manufacturing jobs in Wisconsin. The Wisconsin Budget Project report against this credit is fundamentally flawed, and does not reflect the economic reality of its impact on our state. The reality is that since this tax credit was enacted in 2011, Wisconsin has grown the fifth-most manufacturing jobs in the country. Prior to the credit's enactment, Wisconsin was bleeding manufacturing jobs - we lost 81,800 manufacturing jobs between 2006 and 2010. By contrast, we have grown nearly 34,000 manufacturing jobs since the credit was enacted in 2011. The credit has helped to reverse a trend that had devastated family-supporting jobs for middle class families.
Interesting bit of date-choosing by Mr.(Thinks He’s) Manley, and not just because of the convenient placement of the years of the Great Recession and its “bleeding of manufacturing jobs.” The M&A tax credit didn’t become a tax write-off for these rich people and businesses until 2013, so it seems quite interesting that Manley would say that the M&A credit brought manufacturing jobs back in 2011 and 2012 when the write-off didn’t even exist at that time. It’s magic, I tell you!

Sen. Bewley called Manley’s bluff with a simple data request of the Legislative Fiscal Bureau, She asked what the “gold standard” Quarterly Census on Employment and Wages (QCEW) listed for Wisconsin Manufacturing jobs for the 3 years before the M&A tax credit took place, and what happened in the 3 years following it. Obviously, if Mr. Manley’s argument that the M&A credit sparked manufacturing job growth was true, you’d see an increase in it over the last 3 years.

The actual numbers say….the exact opposite.

QCEW manufacturing jobs, Wisconsin 2009, 2012, 2015
December 2009 422,714
December 2012 454,145 (annual growth, +2.4%)
December 2015 465,069 (annual growth, +1.6%)

Bewley noted the lack of boost after the expensive tax cut was put into place.
Last week we learned that after the first three years under the Manufacturers Tax Credit, a handful of Wisconsin’s millionaires will receive hundreds of millions in tax breaks. If you thought those tax breaks would lead to more job creation, you’d be wrong. The number of new jobs created in those three years fell by 65% compared to the three years before the tax cut took effect.

New data in a Legislative Fiscal Bureau memo, using the Governor’s gold standard measure of job creation, the BLS Quarterly Census of Employment and Wages, shows that Wisconsin added just 10,904 new manufacturing jobs in the three years that the Manufacturing & Agriculture Tax Credit began phasing in. In the three years before the soon-to-be $209 million giveaway took effect, Wisconsin added three times as many manufacturing jobs: 31,431.
Yes, I know manufacturing has slowed down in general over the last 3 years in the U.S., but that proves the bigger point that WMC oligarchs won’t tell you- tax breaks to corporations don’t create jobs, demand and revenue from selling products does. And a lack of demand is the reason Scott Walker’s buddies at HUSCO just laid off 100 people in Waukesha last week after getting WEDC tax credits for “expansion" 3 years ago, and likely why New Hampshire Industries in Horicon will close next year.

UW professor Menzie Chinn has a similar analysis at Econbrowser. Prof. Chinn starts his comparison with January 2014, as the M&A credit was small in 2013 and began to accelerate that year. But the end result is largely the same- if anything, manufacturing employment slowed down, and actually fell below what would have been expected, given the nationwide trend in that time period.

At this point, does anyone who’s not being paid by the oligarchs at WMC or similar RW liars really believe giveaways like the M&A tax credit are about job creation? It’s all about greed, both in grabbing more money and profit, and by grabbing more power through kicking back some of that excess profit and rent-seeking in the form of dark money and campaign contributions.

Now do you think you’ll hear these figures in the Milwaukee Journal-Sentinel, or will they refuse to talk about it, as they refused to do with last week’s report of 11 mega-millionaires getting $21 million back from the M&A tax cut? And who ordered that storied to be buried anyway? Editor George Stanley, or his real bosses at the MMAC?

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