Hintz asked the LFB to update the figures for 2017 and the latest budget, now that more information is known, and it turned out that the M&A tax cut is blowing up bigger than ever, with the vast majority of the windfall continuing to go to the richest Wisconsinites. Hintz used the new memo to call for the end to this handout, which would make it easier for the state to pay its bills and improve quality of life.
“I agree that we should be doing everything in our power to encourage economic growth. Effective, targeted tax cuts should certainly be a part of the equation,” said Rep. Hintz, “However, this expensive, regressive tax cut is the exact opposite of that. Wisconsin’s economic performance remains well below the U.S., even as this credit continues to exceed its budget.Even worse, if you add in the LFB Informational Paper which includes the income levels of all Wisconsinites who file income tax, you get this remarkable stat.
“The 2017-19 budget presents an opportunity to restore some of the cuts in programs the Governor used to pay for this giveaway,” said Rep. Hintz. “However, based on past budget priorities such as this, I am not confident Governor Walker will invest in the people of this state the programs that provide opportunity and enhance the quality of life, such as funding for public education and our communities.”
Rep. Hintz also released an LFB memo showing that over 75% of the credit ([when] claimed as income tax) goes to individuals making more than $1 million per year. The memo also showed that $22 million of the credit went to a mere 11 individuals who all made $30 million or more per year.
% of total Wis taxpayers using M&A credit
Income over $200,000 5.02%
Income under $200,000 0.22%
In other words, if you make over $200,000 in Wisconsin, you are 23 times more likely to use the “Manufacturers and Agriculture” tax credit than the other 97.3% of Wisconsin taxpayers. So as it stands today, the M&A credit is a flat-out giveaway to the rich and the corporate that most of the rest of us have no chance of getting.
And as Hintz points out, the price tag for this giveaway keeps going up- well above what the Legislative Fiscal Bureau projected for the Legislature when the tax credit was approved in 2011.
M&A tax cut, projections vs actual use
2013
Proj $ 10,100,000
Actual $ 15,600,000
Difference $5,500,000
2014
Projected $ 44,200,000
Actual $ 81,700,000
Difference $37,500,000
2015
Proj $ 72,300,000
Actual $ 152,700,000
Difference $80,400,000
2016
Proj $ 104,400,000
Actual $ 218,400,000
Difference $114,000,000
2017
Proj $ 128,700,000
New Proj $ 299,000,000
Difference $170,300,000
2018
Proj $ 128,700,000
New Proj $ 320,200,000
Difference $191,500,000
2019
Proj $ 128,700,000
New Proj $334,000,000
Difference $205,300,000
So this tax cut has cost the state's Treasury an additional $804 million beyond what was projected when it was passed into law in 2011. Think the state's education or roads could have been put in better shape with some of that $804 million, instead of just giving it away to
And if this actually translated into growing the state’s economy, then maybe you could accept the price. But that hasn’t happened either, as Wisconsin’s job growth has actually fallen as the M&A tax cut has become fully phased in, with 2016 having the lowest rate of private sector job growth (1.16%) in Scott Walker’s 6 years as Governor.
If WMC and Walker are squawking about this giveaway being brought to light (like they were this afternoon) and are trying to justify it, you know they're vulnerable on this one. And rightfully so, because after 6 years of taking from workers and the poor and giving to the rich, Wisconsin's budget and economy aren't much better off, despite having the benefit of the Obama Recovery to ride on top of. After taking from everybody else for all these years, doesn't WisGOP and WMC and the rest of these oligarchs have to pay back something, especially since their moves haven't done anything to help the average Wisconsinite? And why aren't more Wisconsinites demanding that these scumbags stop getting a free ride at the expense of everyone else?
This whole argument needs to be put down once and for all. Giving money to people who already have lots of money does not produce jobs.
ReplyDeletePeople don't open businesses or expand operations because they have more money. They do those things when there's a greater demand for their goods and services.
In other words, businesses expand when their customers have more money, so what happens when you shove wages down?
Caveat - yes, at the extreme high end of taxation, reducing taxes and stimulate growth, but whatever gains we were going to get from that have already been realized. Now it's just more cash in hand for people who already have bunches.
It's been almost 30 years since my one and only economics course at UW-La Crosse, and I still have a clear recollection on diminishing marginal returns.
Yes, I wanted to be an English teacher. Go figure.
Well stated, Jeff. Your experience reminds me of the first time I was introduced to supply-side as a teenager. My immediate reaction was "No, that's bullshit. You won't get more money by taxing the rich less, and they won't do anything with it."
Delete25 years later, I believe that more than ever. In fact, I'd argue that lowering taxes on the rich STOPS jobs from happening because the incentive to hoard and gamble overwhelms the benefit of investing and growing your company.
Want to jump-start Wisconsin's economy? RAISE WAGES and encourgae entrepreneurs over well-connected corporations.