Cutting taxes isn't helping Wisconsin revenues, why would the US be different?

There's a lot I can say about the abominable Piece of Shit tax bill that passed the Senate late last night (and likely will), but I'm going to go locally for an angle this morning. And it starts with a comment from Our Dumb Senator.

.@SenRonJohnson predicts Senate GOP tax bill will DECREASE federal deficits by spurring economic growth at higher rate than projected by nonpartisan congressional scorekeepers. They say, while accounting for economic growth, it will boost federal debt by $1 trillion

— Mark Sommerhauser (@msommerhauser) December 1, 2017

Well, (mo)Ron can look no further than his home state to see if that strategy is working, given that Wisconsin has cut income and corporate taxes numerous times over the last 6 years and had an especially large tax cut to "take care of" a one-time surplus in 2014. It hasn't come close to happening so far, as Wisconsin revenue projections have been revised down from previous estimates in Fiscal Year 2017, Fiscal Year 2016, and Fiscal Year 2015.

But maybe now the stock/housing Bubble is making it a different situation. That's certainly what the Wisconsin Department of Revenue was implying yesterday.

General Sales & Use tax collections are up 15.2% this October vs. last October. A possible jump start on holiday shopping? pic.twitter.com/wleOKba9Tl

— Wis Dept of Revenue (@wi_revenue) December 1, 2017

(Quick sidelight- why is a taxpayer-funded agency putting this pro-Walker campaign propaganda on its Twitter feed?

So I took a look at the DOR's revenue report that came out Friday afternoon, and the sales tax numbers are indeed robust for October. They're also up a solid 6.2% for the first 4 months of Fiscal Year 2018 compared to what we had through October of FY 2017. If people are that confident in shelling out money to buy things, then maybe things are booming in the state.

Or maybe not. Look at every other type of taxes in that revenue report.

Wisconsin tax revenues, Oct 2017 vs Oct 2016
Income tax DOWN 5.8%
Corporate taxes DOWN 22.2%
Excise taxes DOWN 8.0%
Other taxes DOWN 12.2%

Oh, and that 15.2% increase in sales taxes that Walker's DOR talked about? It probably had more to do with Sept. 30 falling on a Saturday this year, which meant that month and quarter-end sales tax payments didn't have to come in until the following Monday, Oct 2. Don't expect that to continue either.

Even with that one-time bump in sales taxes, October's total General Fund tax revenues were only up 1.1% compared to October 2016, and we're only up 2.1% for the year. That is well below the 3.6% increase in revenues that we need to make the numbers in the current state budget add up for next year. In fact, a 1.5% shortfall in taxes would be in the neighborhood of $240 million.

Now, Wisconsin has enough carried over from 2017 in order to handle that type of shortfall for this Fiscal Year (due to prior budget cuts), but that type of shortfall in Year 1 would likely lead to another projected shortfall in revenues for Year 2 of the budget, and that year doesn't have as much breathing room to handle it. With the Legislative Fiscal Bureau scheduled to release new revenue estimates next month, it'll be interesting to see if LFB lowers its numbers to account for the chronic shortfalls that we've seen with Wisconsin's revenues for the last several years, or if they will buy into the "rosy scenario" of tax cuts and trickle-down, despite no evidence showing that it ever does trickle down into true growth.

But Republicans like (mo)Ron Johnson continue to insist that tax cuts from DC will somehow be different from prior history, and that the Confidence Fairy will cause an already-Bubbly economy near full employment to boom so much that it'll make up for the $1.45 trillion in revenues that the Congressional Budget Office says will be cut. Our experience in Wisconsin shows otherwise- revenues have constantly fallen short of expectations, and lowering taxes on the rich and corporate haven't translated into job or wage growth for people that actually work.

If this monstrosity in DC actually becomes law, expect the GOP to keep trying to sell the failed trickle-down fallacies for the next 11 months, backed by Koch-Bradley ads that are the kickback from oligarchs in exchange for these giveaways. And the only way it stops is if we kick every GOP out at the state and federal levels and keep them out, starting in November 2018.