Schneider tries to claim that because the Wisconsin budget is projected to have enough revenues to increase spending on K-12 education, that it proves that Governor Scott Walker’s tax cuts worked, and that Republicans should continue to insist that “lower taxes makes us better off.”
In fact, in Gov. Scott Walker's proposed 2017-2019 state budget, he plans to spend more in general purpose revenue (generally income, sales and business taxes) than the state ever has before. Walker's last budget spent $33 billion in tax revenue — his latest proposal spends $34.6 billion. And he can do it because tax receipts are up.First of all, Schneider sneakily includes sales taxes in these revenue totals, when sales taxes haven’t been cut at all in Wisconsin over the last 6 years (with some rare, targeted exceptions for specific businesses). And it’s not like Wisconsin has had the sales boom that Schneider theorizes would happen after income tax cuts, as Wisconsin sales tax revenues had an average growth rate of just over 4% between 2011-2016, while US retail sales outside of grocery stores, food and beverage stores and gas stations (aka- most of the places that people pay sales tax on products in Wisconsin) grew close to 5.5% a year in the same time period.
What's most interesting is that state collections have increased despite Walker and the Legislature enacting significant tax cuts over the past six years. Since 2011, Wisconsin has cut taxes almost $4.8 billion, including over $2 billion in cuts to income and business taxes. And yet receipts still continue to rise, allowing Walker to, for instance, increase funding to schools by nearly $650 million in his new budget.
In fiscal year 2016, Wisconsin took in an estimated $15.2 billion in taxes. The next year, that number increased to $15.7 billion, with recent state estimates increasing the number to $16 billion in 2018 and $16.6 billion in 2019.
This effect lends credence to what conservatives have argued all along: Allowing people to keep their own money and spend it how they wish stimulates economic activity and job growth, and thus stimulates tax receipts. When tax rates creep too high, they provide a disincentive for work, thus reducing government revenues.
Retail sales isn’t the only place where Wisconsin has lagged in the Age of Fitzwalkerstan. Let’s go into the numbers and see what has happened with federal tax receipts for both individuals and corporations, and then compare it to what Wisconsin’s tax revenues look like. Obviously tax changes at both levels of government will affect this, but if Chrissy Schneider is correct that it’s the lower tax rates have led to higher revenues in Wisconsin, then we should be near or above the rate of revenue growth that they’re seeing in the rest of the country, right?
And let’s start in 2010, so we can see the last year under Jim Doyle and the Dems’ budget and then look at the Age of Fitzwalkerstan after that.
Change in tax revenues, 2010-2016
Individual income taxes
2010-11 Feds +21.48%, Wis. +10.04%
2011-12 Feds +3.73%, Wis +5.09%
2012-13 Feds +16.27%, Wis +6.46%
2013-14 Feds +5.94%, Wis -5.81%
2014-15 Feds +10.48%, Wis +3.74%
2015-16 Feds +0.35%, Wis +5.66%
In particular, note how badly Wisconsin lagged in 2013-14 and 2014-15, when they used the one-time bump in revenues that everyone got from 2012-13 to put new (Koo-Koo) income tax cuts in place.
Corporate income taxes
2010-11 Feds -5.38%, State +2.20%
2011-12 Feds +33.79%, State +6.30%
2012-13 Feds +12.88%, State +2.07%
2013-14 Feds +17.26%, State +4.52%
2014-15 Feds +7.20%, State +3.90%
2015-16 Feds -14.75%, State -4.17%
And it’s not like this lower corporate tax growth led to more hiring in Wisconsin, as the Walker jobs gap grew in every year from 2011 onward.
Overall, the growth in revenue into state government over the last 6 years in Madison is far behind what was being sent to DC.
Cumulative change 2010-2016
Individual income taxes Feds 72.08%, State +27.12%
Corporate income taxes Feds +56.53%, State +15.40%
So the feds have had an income tax growth rate 2 ½ times faster than Wisconsin, and a corporate tax growth rate nearly 4 times faster. And much better job growth happened in the rest of the country as well as most of the Midwest in that same time period, so it shows that Schneider is clueless (and likely lying on his bosses' behalves) when he says that Walker’s and WisGOP’s tax cuts have led to better growth. Instead, Schneider should instead be saying “Thanks for keeping us above water, Obama!”
Why does this hack keep pulling a paycheck from the state’s largest newspaper again? Promoting these Bradley Foundation liars and other regressive pro-oligarch crap is why I haven’t given the Journal-Sentinel a cent for years, and won’t until they blow out dishonest brokers like Chrissy Schneider.