Wisconsin under Walker shows that tax cuts don't add jobs, and don't pay for themselves

I can't help but notice that our Fair Governor tried to get his name out into the national news and GOP Bubble World again last week, this time by being one of 21 GOP governors signing on to a letter to House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell supporting the GOP's Piece of Shit tax plan.

“America needs a tax cut…Since January 2011, Republican governors have enacted $62 billion worth of tax cuts for the hard-working people of our states, according to Americans for Tax Reform,” the governors wrote. “We urge the two chambers to pass meaningful tax reform legislation and send it to the President’s desk. We’ve proven in our states that you can cut taxes, create jobs, and generate budget surpluses all at the same time. If it can work in our states, it can work for America.”

That's an odd statement, and not just because the GOP tax plan gets rid of "above-the-line" tax deductions like student loan interest and Health Savings Accounts will raise state income taxes for many individuals (by increasing their "income"). The bigger reason is that the tax cuts apporoved by Scott Walker and WisGOP have failed when it comes to adding jobs and revenues.

First, let's look at the jobs front. Walker and WisGOP started by cutting taxes and regulations on corporations, while attacking worker's rights from 2011-2013. Then income tax cuts and an accelerated tax cut for manufacturers followed in 2014, after a one-time surplus of funds appeared.

What do we have to show for it? 24 straight quarters of job growth in the bottom half of US states, and a Walker Jobs Gap of nearly 115,000 jobs during the Age of Fitzwalkerstan.



And as you can see, that gap has grown consistently over those 81 months, with no discernable difference in how it grew in the years after the income and M&A tax cuts went on full blast after 2013.

In addition, once a budget deficit appeared after those 2014 tax cuts, Walker and WisGOP put in spending cuts to balance the budget, and the already sub-standard job growth nose-dived, as shown by the year-over-year figures in the "gold standard" Quarterly Census on Employment and Wages.



And it's worth noting that in this time where Republicans are claiming that $1.5 trillion in tax cuts in DC will "pay for themselves" with added growth, that this has not come close to happening in Wisconsin since the 2014 tax cuts were put into place. We can put this into numbers by looking at the Legislative Fiscal Bureau's revenue projections starting with January 2014, along with what the LFB figured would be the reduction in revenue due to the 2014 tax cuts, and see what actually happened.

Let's start with the immediate effects, and see how far short the state’s tax revenues fell compared to initial projections in the first two years those tax cuts were put in place.

FY 2014 Projected effect of tax reduction -$170 million
FY 2014 Actual taxes vs pre-tax projection -$451.8 million
SHORTFALL $281.8 million

FY 2015 Projected effect of tax reduction -$285.6 million
FY 2015 Actual taxes vs pre-tax projection -$476.0 million
FY 2015 SHORTFALL $190.4 million

This exploding cost of the 2014 tax cut is why the Walker Administration had to skip debt payments in 2015 and 2016 just to avoid the embarrassment of a budget repair bill. It also led to such a budget deficit for 2015-17 that Walker cut the UW System by $250 million, with UW-Madison falling out of the top 5 for public research schools soon after. K-12 education and local governments also remained underfunded, and led the numerous referenda and wheel taxes that we have seen in the last 2 ½ years that have hiked local taxes for many Wisconsinites.

This pattern has repeated over the next 2 years, as Wisconsin revenues fell short of initial projections in those years as well.

Revenue shortfalls vs 2015-17 original budget
FY 2016 $106.1 million
FY 2017 $138.1 million

And 2018's revenues are under a slow start as well. Now maybe a Bubbly stock market will take care of some of that gap as tax returns are filed in early 2018, but that's certainly not anything to count on, and it still underscores that jobs or revenues have not jumped in Wisconsin due to the tax cuts put in place over the last 6 years. In fact, it's more likely that we can say those pro-corporate and trickle-down measures have made the state fall behind the rest of the country throughout most of this Obama Recovery.

But that won't stop Shameless Scotty from trying to throw around this zombie lie of "you can cut taxes, create jobs, and generate budget surpluses all at the same time." And while it is tiring to have to keep reiterating the fact that this claim is Bullshit, Dems have to keep doing until the average Wisconsinite realizes that GOP fiscal policy in Wisconsin is every bit as destructive as the regressive Piece of Shit that the GOP tax plan in DC is.