Monday, February 12, 2018

Kimberly-Clark already gets plenty of tax help. They don't deserve more

As the state Legislative session winds down, there is discussion about possibly throwing more incentives at Wisconsin paper companies like Kimberly-Clark, who recently announced plans to shut 2 facilities and lay off 600 workers in the Fox Valley. But before we try a 920 version of the Fox-con, it may be good to read this analysis by Tamarine Cornelius at the Wisconsin Budget Project.

Cornelius reminds us that manufacturers like Kimberly-Clark already have received years of tax cuts from the state of Wisconsin under the Manufacturers and Agriculture tax credit (aka "The Big Giveaway").
The Manufacturing and Agriculture Credit costs the state an estimated $276 million this year in tax breaks for manufacturers and agricultural producers. That’s a lot of money. For example, that’s more than all the tuition and fees combined paid by students in Wisconsin’s technical college system.

For such a big tax break, you might think that the state would require a great deal of accountability on the part of manufacturers receiving the credit. But in fact, there is no requirement that businesses create even a single job to receive the credit. Kimberly-Clark’s announcement illustrates that allowing a corporation to get away with paying next to nothing in income taxes doesn’t mean that corporation will increase the number of workers it employs....

While the Manufacturing and Agriculture credit doesn’t do much to keep jobs in the state, it does serve another purpose: to line the pockets of the wealthy and well-connected who have rigged the system to their benefit. The credit is strongly slanted in favor of the very rich, to the point where millionaires take home nearly three-quarters of the portion of the credit that is claimed through the individual income tax, despite making up only 12% of the claimants (and a much smaller share of the total population). In fact, just 15 credit claimants—all with incomes of at least $30 million—received a combined tax break of $28 million from this credit. That averages out to a tax cut of a whopping $1.8 million each for these extremely wealthy claimants. These figures are based on the Legislative Fiscal Bureau’s analysis of the costs and distribution of this credit.

And recall that 2 years ago, we were told that right-to-work (for less) would save jobs and help companies expand in Wisconsin, guess that's not quite happening either, is it?

Remember, these GOP giveaways are already in place before any bailout package would be considered. But instead of recognizing that maybe tax cuts and wage suppression don't add or save jobs, and using those hundreds of millions of dollars for the M&A tax cut for something that might actually work, Cornelius notes that the Walker Administration now wants to give away EVEN MORE TAX DOLLARS to Kimberly-Clark
Now, Governor Walker and other state policymakers are saying that nearly wiping out the requirement for manufacturers to pay income taxes is not enough, and that Wisconsin should also publicly subsidize a portion of each job that Kimberly-Clark (and potentially other companies in the same situation) identifies as threatened.

Given the high cost of the Manufacturing and Agriculture credit, its failure to spur employment, and its extremely slanted nature, Wisconsin policymakers should be seeking to roll back the credit. Instead, Governor Walker and other lawmakers have proposed giving an even bigger break to Kimberly-Clark (and presumably other companies) by paying cash subsidies to maintain employment levels, similar to a portion of the incentive package that the state offered Foxconn.
Kimberly-Clark also got a major tax break from the recent Piece of Shit tax bill that was jammed through by Republicans in Washington DC. In fact, Kimberly-Clark cited those tax cuts as a reason for the layoffs, because it allowed to begin a wide-scale restructuring in 2018, letting them reap the benefits of the "cost-cuts" by being taxed less.

This prompted Wisconsin US Senator Tammy Baldwin to ask why state and federal governments was giving so many breaks to a company that would cut so many Wisconsin jobs.

Tammy's got a good point- How many tax breaks DO these corporations need? Maybe it's the corporate tax breaks that are the problem, and maybe it's time that politicians and government have the backs of people that actually work real jobs instead of caring about their donors rich jerks in the boardroom.

As another US Senator asked a little over a decade ago: "When does the greed stop?"

1 comment:

  1. How about more good economic news: