Dem guv candidates have plenty of tax ideas. Here's a few of them

For Sunday's paper, the Wisconsin State Journal' Matt DeFour did a deep dive on the tax proposals of the several people hoping to be the Democratic nominee for governor. Let me break down a few of them.

State Superintendent of Public Instruction Tony Evers and four other top Democratic candidates want to eliminate the manufacturing and agriculture tax credit, noting 93 percent of the benefit goes to taxpayers who make more than $250,000 a year.

“Scott Walker and legislative Republicans have rigged Wisconsin’s economy to benefit millionaires, billionaires and big corporations,” Evers said. “Everywhere I go, I continue to hear the same thing from Wisconsin families, ‘What about the rest of us?’”

Sen. Kathleen Vinehout, D-Alma, wants to reduce the manufacturing credit and preserve the credit for farmers. Rep. Dana Wachs, D-Eau Claire, and Milwaukee businessman Andy Gronik said they want to restructure the credit and tie it to actual job creation. Soglin was the only candidate who said he wouldn’t make any changes to the credit.

While I am sensitive to Vinehout wanting to help farmers in a time when many are going out of business, I think the whole credit should be scrapped. This costly tax cut is taking out more than $300 million a year at this point, as the Wisconsin Budget Project has frequently pointed out.



Especialy given that corporations are getting huge tax cuts from the Trump/Ryan Tax Scam from DC, and because the personal property tax is being reduced in 2019 for business equipment and similar items, I think the manufacturers and Big Ag producers in this state will get along just fine. Especially if some of those funds are used to improve the state's workforce, which these businesses can utilize to improve and expand.

Here are a couple other tax items that Dem candidates are salling for.

...Soglin offered the most specific plan for changes to property and income taxes, calling for a major reduction in property taxes through either an income tax deduction or tax credit targeted at residential property owners. He said he would put in place measures to ensure renters derive some benefit from the property tax reduction, and also to limit the benefit for owners of “McMansions.”

Soglin also would create a new tax rate for the top 3 percent of income earners, or those making $194,000 or more, and use those funds to pay for additional revenue to municipalities to keep property taxes low. He also said he would suspend and possibly eliminate revenue limits, which are the chief way the state has kept a lid on property taxes....

Professional Firefighters of Wisconsin president Mahlon Mitchell is calling for reinstatement of the state forestry tax, saying it “took up a small portion of a homeowner’s property tax bill, but this was crucial revenue for our state forests,” which “are a public good and should be protected for generations to come.”

Mitchell was the only Democrat who suggested completely eliminating the personal property tax, which Walker and Republicans scaled back in the previous budget....

I get Soglin's idea of transferring the burdens from property taxes to income taxes, and I agree that our system of funding local government needs to be reformed so local governments don't have to rely on the property tax as their main source of revenue. And while I'm all for a higher tax on the rich, it seems a bit odd that Soglin would want to get rid of property tax limits unless he's not willing to allow local governments to impose their own sales taxes or other measures to diversify revenue.

As for Mitchell's idea, I agree that getting rid of the state forestry tax was a stupid Walker stunt that is endangering both the dedicated aids for state forests, but other services, given that we're spending $181 million in General Fund tax dollars to fill in the gaps caused by it. But maybe changing it into a dedicated flat fee or part of General Fund taxes is a better way to do it instead of raising property taxes back up. And giving the WMC crew another tax break in the form of getting rid of the personal property tax is a non-starter with me.

DeFour also discussed some of the Dems' plans for transportation. And most do not take the Scott Walker method of "wish and borrow".

Mitchell and Roys mentioned eliminating the new $100 hybrid and electric vehicle fees, though Roys was the only one who said she was open to a new fee on heavy trucks.

Transportation funding has been a major debate for the past three budget cycles with Walker increasing borrowing to pay for road projects, while Assembly Republicans have urged upping revenues such as the gas tax. Democrats have made the state’s poor road quality compared with other states a key issue in the campaign.

Former Democratic Party of Wisconsin chairman Matt Flynn, McCabe, Mitchell, Roys and Wachs said they support indexing the gas tax to inflation, while Soglin supports a five-cent increase and indexing to inflation. Vinehout supports a five-cent increase and finding more efficiencies in the Department of Transportation. Gronik and Evers didn’t offer a specific position on a gas tax hike, but said all options are on the table.

I think Kelda Roys' idea of a heavy truck fee is a great idea, and it matches an idea floated by Republican Rep Amy Loudenbeck last year, before it was shot down in budget negotiations. Why not make those who damage the roads the most pay more towards the repairs that need to be done on them?

I also think gas tax indexing needs to come back, but I'm also partial to the idea of raising the base gas tax by 10 cents from May 15 to September 15, but cutting it by 2 cents for all other months of the year. I can't see why this couldn't be done, and it would put more of the burden on paying roads to the FIBs tourists and others who use Wisconsin's highways in a higher amount in the summer.

Regardless, any of these options would raise more revenues to help fill our $1 billion deficit on the highways and roads, and would lessen our reliance on debt, the costs of which keep rising every year during the Age of Fitzwalkerstan. Anything is better than the pothole-filled path we have been on for the last 4 years.

Lastly, DeFour described some sales tax reforms from the candidates.

Soglin suggested allowing the creation of regional transportation authorities with the ability to raise a half-cent sales tax.

McCabe offered a specific plan to lower the sales tax by a half-cent, while also proposing it be applied to a wide range of goods and services, including aircraft parts, health clubs, travel clubs, stowing nonresident aircraft and boats in Wisconsin, public relations, interior design, tax preparation, real estate broker commissions, advertising and beauty services.

I am all for the idea of RTAs. They are needed in bigger cities, and are a way to make the many tourists that use city roads and amenities pay some of the costs that they impose on the places they visit. McCabe's got an intriguing idea by making the sales tax broader-based and simpler to adminster, but I'd have to see what the price tag would be with lowering the sales tax by 0.5%. 1/10th of our total sales tax revenue is around $360 million, and a 0.5% decline is 1/10th of our current rate.

So if you hear lazy voters and pundits say "Dems have no ideas on taxing and spending", you might want to point them to that DeFour article from over the weekend, and tell them to get a new set of talking points. There are plenty of ideas, now you gotta choose the candidate that has the best ones, combined with the best chance of winning in November.

Even with tax cuts, income and spending are no different so far

I mentioned over the weekend that today's release of US spending and income numbers for March would be notable. It would give us an idea if the economy was accelerating at the end of the 1st Quarter, or if things were on the upswing as that quarter ended, and it might give us an idea which way any revisions to 2.3% GDP growth might go.

If you isolate today’s personal income and spending report to March, it looks like spending and incomes went up at a solid pace.

Personal income increased $47.8 billion (0.3 percent) in March according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $39.8 billion (0.3 percent) and personal consumption expenditures (PCE) increased $61.7 billion (0.4 percent).

Real DPI increased 0.2 percent in March and Real PCE increased 0.4 percent. The PCE price index increased less than 0.1 percent. Excluding food and energy, the PCE price index increased 0.2 percent.

Given that slow consumer spending was a problem in Friday’s GDP report, seeing that 0.4% increase in PCE is a welcome change if you want to see growth pick up. The 0.2% increase in real disposable income also should keep consumer spending going in the short term.

But then you look at the revisions that the report had for January and February, and things don’t look so hot.

Revisions to spending and income report
January 2018
Personal income -$10.5 billion
Disposable income -$13.4 billion
Consumption expenditures +$11.4 billion

February 2018
Personal income -$10.2 billion
Disposable income -$11.3 billion
Consumption expenditures -$26.3 billion

Which means that we started from a lower number than we previously knew for these stats. If you use the numbers from last month’s income and spending report as a base, the increases in March don’t look so great.

March 2018 spending and income vs unrevised totals Feb 2018
Personal income +0.2%
Disposable income +0.1%
Consumption expenditures +0.3%

In other words, much of the “increase” in income that hit in March merely got us back to where we already thought we were in the previous 2 months. So at least for the first 3 months of 2018, these stats showed little to no boost from the GOP’s tax cuts, other than a one-time increase in disposable income in January (when the lower withholdings from the tax cuts were registered).

What the income and spending figures don’t indicate is that wages are being increased any more than they were in the past. In fact, after three straight months of good gains in wages and salaries at the end of 2017 and January 2018, those increases declined in both February and March, with March having the smallest gain in 10 months.


So to anyone who thinks lower tax rates on employers might be “trickling down” into higher wage growth for the first three months of 2018, the answer is “not yet.” And if history is any indication, the second part of that answer is likely "not ever."

Hard times for dairy farmers in Wisconsin

Look at the increasingly hard times that dairy farmers are facing in Wisconsin, which has been addressed by numerous media recently. There was the revelation earlier this year that Western Wisconsin led the nation in farm bankruptices in 2017, and the Milwaukee Journal-Sentinel went into this problem in detail this Sunday.

The J-S article noted that the number of milk-cow herds has declined by 20 percent over the last five years in Wisconsin, and this has led to calls for help from Congress.

Last week, more than 50 groups from across the country — including the Wisconsin Farmers Union, Family Farm Defenders and the National Family Farm Coalition — asked Congress for emergency relief from the deepening troubles on small dairy farms.

Among other things, they want the government to set a minimum price that farmers would get for their milk — at a break-even point of $20 per hundred pounds, or about 11 gallons, compared with $13 paid in some months of the downturn.

They’re seeking a milk supply management system to stabilize volatile markets. And they’re asking the government to purchase surplus milk for use by emergency food providers, such as food pantries.

Some of the solutions may seem extreme, but so is the crisis that’s rapidly eroding America’s rural economy and threatening families, according to the farm groups.

“In the last few months, dairy marketing cooperatives have provided suicide hotline information to members along with milk checks,” the groups said in their letter to members of Congress and the U.S. Department of Agriculture.

Mike Gousha also discussed the tough situation involving Wisconsin farmers on his show this Sunday. Gousha interviewed Dave Daniels, a dairy farmer from Union Grove who serves on the board of the Wisconsin Farm Bureau Federation. Daniels mentioned to Gousha that low prices and a lack of supports from the federal and state governments were making an increasing amount of farmers give up on the business.

Daniels: WE’VE HAD THESE LONG TIME FRAMES OF LOWER PRICES IN THE LAST COUPLE OF YEARS. WE KNOW IT'S A CYCLICAL TYPE OF INDUSTRY, AS MOST COMMODITIES. WE JUST DON'T HAVE THE SAFETY NET THAT'S OUT THERE, AND WE ARE WORKING WITH THE GOVERNMENT AND FARM BILL TO TRY TO PUT THAT IN PLACE.

Gousha: WHAT ARE THE PRICES SO LOW?

Daniels: IT IS ALL ABOUT SUPPLY AND DEMAND, AND WE HAVE AN OVERSUPPLY OF MILK. DEMAND IS ACTUALLY REALLY GOOD, AND WE ARE GETTING IT MOVED OUT OF THE COUNTRYSIDE. AND THEN WE ARE DOING A LOT OF EXPORTING, BUT WE JUST NEED TO GET THAT BALANCE BACK IN PLACE.

Gousha: AND WE WERE TALKING BEFORE THIS INTERVIEW BEGAN ABOUT THE NUMBER OF DAIRY FARMERS WHO HAVE SIMPLY SAID "YOU KNOW, IT MAY BE A CYCLE, BUT I THINK I AM DONE, I'M GOING TO GET OUT. HOW MANY PEOPLE ARE LEAVING?

Daniels: I’VE HEARD THE NUMBER, ABOUT 500, IN THE LAST COUPLE OF YEARS WHO DO NOT HAVE A LICENSE NOW OR THEY DIDN'T TAKE OUT THEIR LICENSE TO BE A DAIRY FARMER. AND THAT COULD BE SOME CONSOLIDATION OR THAT COULD JUST BE A FARMER THAT'S READY TO RETIRE.

I agree that farmers deserve some kind of price supports to stay in business and keep them relatively competitive with large, corporate mega-farms. But John Peterson of the Democurmudgeon blog watched that interview, and noticed an interesting contrast between how some Wisconsinites discuss what to do with farmers having a tough time, and urban people (often of color) who also may be falling hard times.

Upfront's Dairy Farm Bureau guest offered no solution and double standard; taxpayer handout when dairy prices are low, cut "handouts" to urban low wage or jobless Wisconsinites! Walker's divide and conquer works.

— John (@democurmudgeon) April 29, 2018

That is an intriguing double-standard, isn't it?

Note that Daniels brought up overproduction as a reason behind farmers being in such dire financial straits. James Rowen was talking about this problem a year ago in his Political Environment blog, and noted that while dairy farmers were already feeling the hit of oversupply, the Walker Administration and other GOPs have cleared the way for mega-farms and others to pump out even more product, increasing the economic problems.

Clearly there is a lot wrong with this picture; the common thread -- - those with the least power are being ignored and abused by those with more power, or access to it.

So consider that:

* Walker in 2012 began financing a state plan to boost milk production in the state:

Walker hopes to grow Badger State milk production to 30 billion pounds annually by 2020. The effort to do that has been dubbed "30x20" and is part of the Grow Wisconsin Dairy program.

Walker unveiled his proposal in Madison on March 13. He chose the twentieth annual business conference of the Professional Dairy Producers of Wisconsin (PDPW) for his announcement.
* GOP Attorney General [Brad Schimel], at the request of GOP legislators, issued an opinion [in 2016] that would make it easier for the DNR to award high-volume ground water permits sought by Big Ag and Big Dairy.

So sure, Scott Walker might have toured Northeastern Wisconsin dairy farms whose buildings were damaged by heavy snow last week, to make it seem like he and his Administration cares and is trying to help. But in that same week, Walker's DNR allowed a permit for a 5,800-cow operation Green County that will crowd out smaller, family operations and pollute the communities in the Sugar River watershed.

As always, watch what Republican politicians do (or DON'T do), and not what they say at a media event. And WisGOP's actions (and inactions) show that they don't care about family farms or in promoting responsible measures by Big Ag to allow for more of the balance that Dave Daniels is asking for. It makes you wonder if Big Ag organizations like the Wisconsin Corn Growers, the Dairy Business Association and the Farm Bureau Federation regret endorsing Walker in 2014.

NAAAAH! Those groups care about one thing - increased profit and policy influence for Big Ag. And as long as Republicans give them increasing amounts of those, they'll keep supporting the GOP. Even if it's at the expense of everyday family farmers who are increasingly being driven into bankruptcy....or worse.

Once again, comics tell truths because "legit media" won't

With all the repression, mendacity and flat-out lies coming from our government these days, it's telling that we need comics more than ever to tell the truths that our "objective" media won't.

While I find Bill Maher to be very hit-and-miss, he was on it Friday night. Maher mentioned how it's odd that Roseanne Barr and her character on "Roseanne" became a Trump supporter, when it's obvious that Trump and other GOPs have done nothing but give away money and power to the rich, which is something Roseanne railed against for years.

"The elites (Trump) rails against on Twitter got billions forever, while Roseanne Conner got peanuts with an expiration date. He cut the corporate tax from 35 to 21 percent. I don't remember "the forgotten American" clamoring for that. This is what his fans have so much trouble seeing- the constant bait and switch."

"[Trump] talked tough to the pharmaceutical companies. He said 'We're going to get drug prices so far lower than they are now, you're head will spin.' Is your head spinning, Roseanne? Because in the first scene of your new show, you and Dan are trading your meds, because you can't afford the ones you need. Because Trump sold out to Big Pharma and sabotage Obamacare, the program designed exactly for people like the Conner family." _Bill Maher

Our media won't be this blunt, and call out the double-talk and flat-out lies that permeate from the average Republican these days, because they think they will be called "liberal and biased" by the right-wing media complex. But what if the truth is liberally-biased (or what is portrayed as "liberal" in "both-sides" media)?

This is where the comics have to step in, which is what is so infuriating about the faux-trage from comic Michelle Wolf's routine at last night's White House Correspondents dinner. As someone who has been watching the "Handmaid's Tale" with my wife recently, this comment really hit home.

"Sarah Huckabee Sanders is here. I have to admit I'm a little starstruck. Sarah, I love you as Aunt Lydia in The Handmaid's Tale." ~ Michelle Wolf#WhiteHouseCorrespondentsDinner pic.twitter.com/TQbFHAeDyk

— 🌊Ryan Adams (@filmystic) April 29, 2018

The subtext of that show in how freedoms are eroded to reach the end goal of authoritarian fascists, and how many people are willing to enable them. (SPOILER ALERT) In the most recent episode, the main character has to hide in the former newspaper offices where the people that Aunt Lydia works for murdered scores of journalists. Given some of the "lock em up!" and "fake news! along with the hate-stirring that is part and parcel of Trumpism, it makes it hard for me to watch that show sometimes, because it illustrates the depths that we could sink to with right-wing depravity.

Here's the other part of the fauxtrage that drives me nuts. Some of the invited guests to this DC Circle Jerk claimed "elitists" like Wolf deeply offended them. Which is especially rich because the circles THEY run with are p[laces 99.5% of us can only dream of.

The poor beleaguered Koch Brothers Lobbyist and White House senior official who frequently pose for photo shoots as a DC power couple being picked on by elites https://t.co/KRkoYBlGZl

— Dan Pfeiffer (@danpfeiffer) April 29, 2018

Wolf had another big target in her speech last night. She ripped on corporate media's role in enabling this awful president, the corruption that permeates all parts of his administration, and the corrosive politics that we are dealing with today. Because that media treated Trump as a reality show star that wasn't to be discussed seriously, and therefore ignored the heniousness that he stands for.

Even when Trump became a serious contender for the GOP nomination and their eventual nominee, they kept treating him as a celebrity and as a sideshow (and still kind of do as president) instead of castigating him as a clueless, anti-democratic fool who has no business ever being charge of a country with the ability to (ab)use political power.

And the reason why? Ratings and access.

"What no 1 in this room wants to admit is Trump helped all of you. He couldn’t sell steaks, vodka, water, college, ties or Eric - he has helped u sell your papers, books & TV. You created this monster & now you're profiting off of him"

Michelle Wolf being factual #WHCD pic.twitter.com/WLzNRI3Rkk

— ☇RiotWomenn☇ (@riotwomennn) April 29, 2018

When this fact was pointed out to the media's faces, Coastal Establishment insiders like the New York Times' Maggie Haberman and NBC's Andrea Greenspan...COUGH....Mitchell complained about Wolf's "tone" and fauxtraged about what they claimed were shots against Huckabee Sanders' appearance (which they weren't, by the way).

Which makes this response by Wisconsin-raised Jeremy Scahill so on the money.

But jokes from presidents about drone murdering civilians and wars based on WMD lies are perfectly fine. You are parodies of yourselves. https://t.co/PqyO7yLubD

— jeremy scahill (@jeremyscahill) April 29, 2018

It illustrates the fatal flaw in much of the Beltway's "journalism". They only care about what affects them and the other politicans and insiders they cover. They don't have a problem if people make jokes that punch down at the everyday person, but if someone turns the spotlight on them and the fraudulent game they're in on , then it's "deeply offensive." Cry me a river, millionaires.

And why is the media caring about the fee-fees of right-wingers anyway? the Washington Post's Greg Sargent points out, Republicans will lie and whine regardless of what the press does, and the press then shrugs and gives their dishonest bile as "one side of the story." Which plays right into the GOP's hands while hurting the media's reputation with everybody.

This is how the media ends up rewarding bad-faith right wing attacks on the press.

There *is no point at which* right wing critics will *ever* concede that the press is behaving objectively.

It's a sucker's game. Choose not to play it. https://t.co/lWdEmIjpN5

— Greg Sargent (@ThePlumLineGS) April 29, 2018

The media's constant enabling and allowing of bad-faith right-wingers to poison the well of discourse leads a lot of people to be turned off from 2018's politics and treat it as a reality show to watch and be entertained by. And that's dangerous in a time when both media members and average Americans need to be active citizens that give a damn about the destruction of our democratic system of governance, along with the lack of accountability and checks and balances that is currently happening in GOP-run DC.

So as long as our "legitimate" media continue to value ACCESS over REPORTING, we're going to have to rely on partisans and comics to give us the truth and connect the dots on things these days.

Wisconsin corporate taxes keep falling, but wait till next month to see if we're in crisis

With tax-filing season winding down last week, it’s the time of the year where we start to find out what state finances will really look like ahead of a big state election in November. But newly-released figures from the Wisconsin Department of Revenue actually muddied the waters when it came to figuring out that direction.

At first glance, the Wisconsin DOR says income taxes are either way down or way up, depending on how you choose to look at it.

Income taxes, Wisconsin
Mar 2018 vs Mar 2017 unadjusted -58.0%
Mar 2018 vs Mar 2017 adjusted +24.4%

FY 18 vs FY 17 unadjusted +1.3%
FY 18 vs FY 17 adjusted +6.0%
FY 18 LFB projection vs FY 17 +4.24%

These notes help explain March's big income tax “adjustment” of more than $253 million.

1. For fiscal year (FY) 2018, the adjusted line includes withholding that was received on the first working day of April, rather than the last day of March, which was a weekend day. The collections-to-date were also affected for FY2018.

In 2017, March 31 was on a Friday, and it wasn’t Good Friday like this year, so there was no need to build such an adjustment. And while the percentage changes are large because net revenues are smaller due to lots of refunds in March, that’s still a major difference whether you go on the “adjusted” or “unadjusted” income tax figures. So the projections fall right in the middle of the adjusted and unadjusted numbers. When things “adjust back” in April, we’ll see which number is closer to reality.

Also in the report, when I first looked at the corporate tax figures for March, it looked like a bloodbath for the state that would mean a sizable budget hole.

Corporate taxes, Wisconsin
Mar 2018 vs Mar 2017 -46.4%
FY 18 vs FY 17 -18.1%
FY 18 LFB projection vs FY 17 +3.2%

But the DOR had a caveat with this as well.

3. 2017 Wisconsin Act 2 changed many corporate due dates from March 15 to April 15.

Ah, that helps explain it. If we assume that the drop in corporate revenues is due to this change in filing deadlines, and instead figure that March would have had a 3.7% year-over-year growth in corporate tax revenues (which would match the estimates for Jan-June 2018 from the LFB’s revenue projections), this would have increased March’s corporate taxes by about $91 million.

But even considering the change in due dates, there are still concerns with those corporate revenue numbers. That extra $91 million would still have left corporate taxes for FY 2018 DOWN by -3.5% with only 3 months to go. That’s quite a gap, and it would mean we are on our way to a 3rd straight year of declining corporate revenues in Wisconsin.

Sales tax growth declined in March (only 1.2%), but stronger months before then means that we are right in line with the 4.6% growth the LFB projected for Fiscal 2018. So it’s the income and corporate taxes that seem likely to be the key as to whether Wisconsin exceeds or falls short of those projections.

A lot of these variables will be straightened out in the April revenue report. If it goes to the good side, then we will be increasing our very small budget cushion, and in better shape for the future. But if we are underperforming, then we are staring at a 2018-19 budget deficit that has to be fixed, along with the $1 billion structural deficit that is looming in the next budget for 2019-21.

Even with tax cuts in place, consumption,1st Quarter GDP slows.

We got a look at the first GDP numbers under the new tax law. And it was a mixed bag with solid growth continuing, but slowing down from what we had at the end of 2017.

The U.S. economy slowed in the first quarter as consumer spending grew at its weakest pace in nearly five years, but the setback is likely temporary against the backdrop of a tightening labor market and large fiscal stimulus.

Gross domestic product increased at a 2.3 percent annual rate, the Commerce Department said in its snapshot of first-quarter GDP on Friday, also held back by a moderation in business spending on equipment and investment in home building.

The economy grew at a 2.9 percent pace in the fourth quarter. Economists polled by Reuters had forecast output rising at a 2.0 percent rate in the January-March period.

If you dig into the Bureau of Economic Analysis’ GDP report, and especially their technical note, you get some intriguing information. The technical note gives figures on how much extra money was pocketed due to the GOP’s tax cuts taking effect, and how it inflated disposable income and savings for the 1st Quarter.

Increases in the first quarter estimates of disposable personal income and the personal saving rate mostly result from a decrease in personal current taxes, which reflect the effects of the Tax Cuts and Jobs Act (TCJA). BEA estimates that the TCJA reduced personal current taxes by $115.5 billion at an annual rate. BEA’s preliminary estimates of the effects of the TCJA are based in part on projections prepared by the Treasury Department’s Office of Tax Analysis….

Wages and salaries in the first quarter were adjusted up by $10.0 billion (annualized rate) to account for bonuses that are not included in the monthly source data in the Current Employment Statistics from the Bureau of Labor Statistics. This adjustment reflects one-time bonuses paid by businesses reported publicly in response to the TCJA and was derived based on news releases covering estimates of the number of employees receiving bonuses and payment amounts. BEA will release QCEW-based estimates of wages and salaries, that will include both regular and TCJA related bonus activity, for the first quarter of 2018 on July 27.

Apparently the BEA isn’t looking into how many of those publically-announced bonuses are being offset by businesses like Kimberly-Clark who used the lower corporate tax rate to “restructure” and lay people off. Maybe they should.

James Hamilton at Econbrowser has a good explanation of today’s data, and you can see how the slowdown in consumption at the start of the year is the big culprit behind the 1st Quarter slowdown.



Hamilton also notes that the year-over-year trend for growth has gone up for each of the last 6 quarters. That figure is now at 2.8%, back toward where we were in much of 2014 and 2015.



Hamilton also directs us to this article from Bill McBride at the Calculated Risk Blog, who notes that a
hotter housing sector is also leading to higher prices.

In the GDP report, real residential investment was unchanged in Q1. But residential investment (RI) as a percent GDP actually increased in Q1! How can that be? The answer is that the price index for residential investment increased sharply in Q1 (up 8.5% annualized). The large increase in the residential investment price index follows what we are hearing from home builders - that material costs have increased sharply (the tariffs haven't helped, but other prices are up too). This hurts both builders and home buyers.

And it’s that inflation part that I think will be a risk to GDP growth in the near future. The higher deficits are already leading to higher interest rates for the 10-year Treasury and 30-year mortgages, and rising prices should make the Federal Reserve more likely to bring up rates for the short term.

If wages don’t rise to keep pace with the higher prices Americans are facing, then we have an economic imbalance growing that won’t hold. Which makes Monday’s release of spending and income numbers from the BEA all the more interesting, since those figures could be a big leading indicator as to whether our 1st Quarter slowdown was temporary, or an early sign that any “Trump Bubble Boom” that happened in 2017 is slowing down.

Fox-con slams full speed ahead, so GOP can keep the wreck from being avoided

This week featured Scott Walker's DNR rubber-stamping Foxconn's plans to take 7 million gallons of Lake Michigan water, moving this boondoggle onto the fast-track. As part of the PR offensive, officials from Racine County, Foxconn and Foxconn’s contractors held a commercial groundbreaking ceremony on Thursday (with little public notification) to officially hand over nearly 800 acres of land from the Village of Mount Pleasant to Foxconn. The event allowed the chance to discuss the large excavation project that will lead to the Foxconn campus, which Foxconn's main contractor claims will mostly be done by Wisconsin firms and workers.

Also on Thursday, Foxconn, M+W and Gilbane also announced that 90 percent of the contractors for the initial site work are from Wisconsin, including 10 percent by Racine County-based firms. Ten percent are minority, veteran and/or woman owned.

“We are committed to and passionate about putting Wisconsin first,” said Adam Jelen, senior vice president, Wisconsin, for Gilbane Building Co. “Right out of the gate, these first bid awards reflect our passion for building capacity in local workforce and businesses.”

OOOOH! 10% will go to local firms, and to firms that aren’t run by white men? Transformative, I tell you!



Does anyone think those other Wisconsin firms wouldn’t be getting business if it wasn’t for Foxconn? I mean, according to the Walker Administration’s stats, manufacturers have been hiring everywhere in the last 6 months before one bit of dirt is turned on Foxconn! (yes, the Walker Administration's manufacturing jobs number is bullshit, but the double-talk is amazing)

The massive first phase of the project will take place over the next 16 months, and turn the farm fields and residences in the area near Mount Pleasant into a place that can handle a massive manufacturing facility.

Jelen said the first phase of bidding totals about $100 million in contracts to Wisconsin businesses spread across 25-30 Wisconsin companies for site development work on phase one of the Foxconn Science and Technology Park.

He explained that the first phase will consist of a massive excavation of about 4 million cubic yards of soil, erosion control and stormwater management to get the site ready for the next steps of the infrastructure. That amount of soil is the equivalent of a National Football League field 625 yards deep, he said.

“The early development work will have about 500,000 work hours on site with a peak of 400 workers and create 800 direct and indirect jobs,” he said, stretching into August 2019.

Remember that 15% of these costs get kicked back to Foxconn and their contractors by state taxpayers, due to the incentive package that was jammed through last year. You think our roads or services in other parts of the state could use $15 million to improve things? Not only would that direct public spending also get people hired, but all Wisconsinites could actually benefit from those improvements, instead of one foreign company.

And this type of tax-funded “capitalism” isn’t expected to just be connected to the Foxconn campus, but now is likely to extend to the indirect jobs that Walker and other GOP hacks have pointed to as a reason to support the Fox-con. That was made obvious in an article in Thursday’s Milwaukee Business Times from Arthur Thomas.

The economic impact study initially released to support the Foxconn project touted the prospect of 400 jobs at a glass manufacturing plant and ever since MMAC president Tim Sheehy mentioned the company’s name during public testimony, the expectation has been the glass supplier would be New York-based Corning Inc.

Wendell Weeks, Corning chairman and chief executive officer, said during an earnings call this week that the strategy the company has laid out makes it clear that “we weren’t going to put in new melting capacity for display unless we get two out of every three dollars from others and that we could keep 100 percent of the revenues and profits.”

The company’s first Gen 10.5 facility in Hefei, China was a $1.3 billion investment, but Corning contributed just $460 million after government and commercial incentives. Weeks was asked if Corning would require a similar financial split if it were building a facility in Wisconsin.

“We would apply that same rule to any LCD manufacturing anywhere in the world, because we believe it’s really important to preserve high returns on capital for our investors,” Weeks said. “If our customers want the leading player in the display industry to be with them, then they’re going to need to subsidize that for our shareholders. Wherever anybody is going to build, we’re going to apply that rule.”

Look at that statement from Corning CEO Weeks. He is openly admitting that corporate welfare is part of the company’s business model. And the article notes that Sheehy talked up the glass plant as a $1 billion investment, so if 2/3 of that is subsidized, that means Corning expects taxpayers to come up with $667 million on top of what they’re already shelling out for the Fox-con.

But maybe Foxconn will be nice enough to kick back some of its handouts from the state of Wisconsin, and send them to Corning to lessen the costs and make for a win-win for everyone and…..

HAHAHAHAHAHA!!!! Had you going there for a second, didn’t I?

The Fox-con development is becoming even more of a theft in plain sight. And Walker and his corporate oligarch puppetmasters are putting their foot on the gas to have this thing go full-speed ahead, regardless of how badly is screws things up for everyone else. And the reason why is sickening.

Once Foxconn’s construction gets started, Walker and WMC and MMAC think it’ll be a lot harder for it to be stopped after the November 2018 elections, regardless of who is power, and leave the state with less of a chance to remove this albatross from the necks of state and local governments, because many of the costs of development will already be sunk in.

They’ll skip away with their massive handouts and profits from the Fox-con, and we’ll be left to pay for years and clean up the mess they leave behind. With corporatist garbage like this going on under the guise of “capitalism”, you wonder why younger generations are preferring socialism these days?

WisGOP reaches into recycle bin to promote more failed tax policy

With our Governor being visited by the equally Koched up, clueless and dishonest Vice President this week, someone out in WisGOP land thought it was a good idea to promote the GOP's Piece of Shit tax bill to go with it. You know, the one that has "Nixon during Watergate" levels of approval these days.

And Scott Walker used the occasion to bring back this claim.

According to analysis by the @WI_Revenue, the federal Tax Cuts and Jobs Act will result in a $2,508 tax cut for a typical family of four in Wisconsin. That’s $200 a month more in the pockets of the typical Wisconsin family. #WIWorking pic.twitter.com/fNnMkd18ct

— Governor Walker (@GovWalker) April 26, 2018

First of all, raise your hand if you're getting nearly $100 a paycheck more than you were in January. Yeah, me neither.

Second, that claim was recognized as BS when Walker first made it 4 months ago. I talked about it in this post, and noted the assumptions that Walker's Department of Revenue made were sketchy at best, and conveniently left out the bad things that were happening due to the tax bill.

If you punch in "$94,700, married filing jointly with 2 kids" to this tax calculator from the Reason Foundation, then it says....tax cut of around $2,500. The reasons? About 2/3 in rate cuts and an expanded standard deduction, and about 1/3 from the expanded child tax credit. But that expanded standard deduction is also a problem, because this also reduces the incentive to own a home (like the "typical Wisconsin family" does), and Mark Zandi of Moody's Analytics says that US housing prices will be 4% lower in 2019 than they otherwise would have been as a result.

If you figure the median Wisconsin home is around $160,000, that's a $6,400 difference in wealth. So much for your one-time tax cut, "typical family."

The danger to housing prices dropping due to a lack of writeoffs was underscored this week, as Congress's Joint Committee on Taxation said that over half of the people who wrote off mortgage interest when they filed their taxes this year will not do so next year due to the tax law changes. And people in the income bracket Walker mentioned will have a decline of 60%.

In addition, I pointed to a quote from Todd Berry of the then-Wisconsin Taxpayers Alliance, who noted that using a "married family of 4" was a wrong way to look at the tax law's effects.

Wisconsin Taxpayers Alliance president Todd Berry said the biggest problem with Walker's analysis is that it chose a two-income, two-child family which is no longer "typical."

"The largest number of filers in Wisconsin are single," Berry said. "And, among those who file jointly, two kids of tax credit age are less and less the norm."

More absurd WisGOP tax spin happened when Koched-up Assembly Speaker Robbin' Vos and State Senate wanna-be Dale (Koo-Koo) Kooyenga pointed to an analysis that claimed a Walker/WisGOP tax cut was adding manufacturing jobs.

Study: Manufacturing tax credit added 21,000 jobs. https://t.co/052DeaIdl7

— Speaker Robin Vos (@SpeakerVos) April 24, 2018

The problem here is two-fold.

1. The article is a year old, from April 2017.

2. The "analysis" was by Koched-up hack Noah Williams, who is using the UW's good name to try to legitimize garbage right-wing policies. The Capital Times noted in August that Williams' CROWE center in UW-Madison's Economics Department was backed by a combined $340,000 from the Bradleys and the Kochs. In addition, Williams infamously tried to get a job as an advisor for the 2016 presidential campaigns of Scott Walker and Marco Rubio, so no, he is not an honest broker.

But it's par for the course with the weaklings in today's GOP. If WIsGOP is reaching into the recycle bin like this, to prop up things that have already been found to be wrong, you know THEY HAVE NOTHING to offer in November.

And if they're desperate enough to try to pull this garbage in April, how are they going to try to spin things when the economy is likely worse in 6 months?

No matter what Walker claims, rural schools in Wisconsin continue to suffer and slide

State Senator/Dem candidate for Governor Kathleen Vinehout recently wrote an article detailing her trip to Southwestern Wisconsin as part of the Wisconsin Legislature’s Blue Ribbon Commission on School Funding Reform.

Vinehout says that rural schools continue to struggle due to a funding formula that doesn’t fit their areas’ needs and demographics, and due to cuts in state aid.

For decades state policies created hardships for rural schools. Superintendent Nancy Hendrickson of Highland School District explained that spending caps in the 1980s locked in low spending districts. A need for new buildings led to borrowing and increased property taxes in the ‘90s. In 1993, revenue caps locked schools into unequal spending. With school aid tied to the number of students and, with a declining rural population, aid is dropping faster than the cost to educate children….

Superintendent Doug Olsen of Kickapoo Area School District explained some of the challenges. “We are a consolidated school district of three communities in one building.... Our district consistently serves an economically disadvantaged population that comprises over half of the student body.”

Olsen noted that with poverty come needs. “... only 48% of poor students are ready for school at age 5, compared to 75% of students from moderate to high income families. From vocabulary and pre-literacy skills, to numeracy, emotional regulation, and trauma, kids in poverty are more at risk to come to school less prepared.”

“Cut, cut, cut,” said Superintendent Hendrickson. “We had to cut so many things.” Rural schools did not recover from deep cuts made in Governor Walker’s first budgets. Across the state, school funding, in real dollars, for this school year is less than a decade ago.

Without resources, buildings and systems maintenance is deferred. School districts see fewer applicants for vacant teaching jobs, a shortage of substitute teachers and problems with a flattening pay scale for teachers making it hard to keep veteran teachers.

It’s worth noting that when Scott Walker is flying around the state at taxpayer-funded campaign stops events promoting added spending on K-12 education in the 2017-19, that all of those extra funds were put into per-pupil aid. That means those rural schools that Vinehout described, the ones in areas that are declining in population and enrollment, aren’t getting as much of a benefit as other districts.

Which helps to explain Wisconsin still had 66 school referenda in April to allow schools to tax and spend more, despite those increased aids and other pre-election boost in sparsity aid and flexibility for low-revenue districts. Most of those passed, including 27 of the 31 operating referenda, but the fallout from one of the few failures was revealed this week.

After referendum's failure, Delavan-Darien School Board votes to close Darien Elementary, not renew 16 teachers https://t.co/Q9En6Hlk3v pic.twitter.com/3IWgO0ozWC

— GazetteXtra (@gazettextra) April 24, 2018

Here's some more detail on that Alternate story from Fort Atkinson radio> from 940 AM in Fort Atkinson.

The Delavan-Darien school board voted to close Darien Elementary School—the only public school in Darien—after the 2017-18 school year and approved 16 teacher non-renewals, bringing the total number of non-renewals to 39. This is after a $3.5 million referendum on the April 3 ballot, failed by more than 500 votes. The board included a warning: If it didn’t pass, the district would have to make severe cuts. Darien Elementary School is one of the district’s three elementary schools, currently housing 263 fourth- and fifth-graders. Darien Elementary’s fifth grade will shift to Phoenix Middle School, and the fourth grade will move to Turtle Creek Elementary School.

And yes, this the same Delavan-Darien school district that had this guy roaming its halls in the 1980s.



How can Walker continue to have these taxpayer-funded photo ops claiming he is helping schools when THE DISTRICT HE GRADUATED HIGH SCHOOL IN has to close an elementary school and cut staff? A normal person might stop and reflect on that situation, and try to figure out a better direction.

But the Desperado won't come to his senses, because he's a lifetime grifter who has never had to work a real job, nor face many consequences for his bad decisions. Scotty’s pre-election boost to Wisconsin school funding is not the start of a new dedication to invest in education. It's clearly nothing beyond a desperate, one-time gimmick.

And the “one-time gimmick” theory makes extra sense when you consider there’s a $1 billion deficit looming for the next Wisconsin budget. So if Walker isn’t kicked out in November, you can bet more rural districts will be joining Delavan-Darien in closing their schools, because you know Scotty won’t give anything more to help them.

Why did WisGOP want to bail out Kimberly-Clark, but didn't help Appleton Coated reopen?

Two Fox Valley paper manufacturers that announced large amounts of layoffs amid “restructuring” last year have very different tales to tell when it comes to the state of their business. It also led to two very different (and suspicious) reactions in Madison by the GOP-controlled state government.

The first case involves Appleton Coated, which shut down its mill last Fall when its owners went bankrupt, putting the future of the facility up in the air. But in recent months, things have turned around at the mill in a good way. This includes a new owner, a new name (Midwest Paper Group) and some of the laid-off workers coming back on the job making new products to be more competitive.

The plant in the village of Combined Locks shut down in October while the owners went through receivership.

Outagamie County Executive Tom Nelson praised the re-start.

"Make no mistake, Appleton Coated’s turnaround will be remembered as one of the biggest grassroots economic success stories in a long time," Nelson said, creating union members for attending receivership hearings in September and helping convince a judge, and the new owners, that the mill was still viable.

Now, months later, 230 of them are back on the job. Most of the workers are in the union and worked at the mill, where 600 people used to be employed, for years before it closed….

The name is not the only thing that is changing at the mill. Workers will still make free sheet coated paper used for stationery or in printers but they are also making "brown paper" that can be turned into cardboard. Brown paper is more in demand because of online shopping and shipping.

It's alive!

Compare the Appleton Coated situation with another Wisconsin paper products company that recently announced layoffs at their facilities - Kimberly Clark. K-C just reported their earnings this week, and they sure didn’t sound like a company that was struggling just to hang on.

Kimberly-Clark Corporation KMB reported first-quarter 2018 results, with the top and the bottom lines improving year over year. While earnings were in line with the Zacks Consensus Estimate, sales exceeded the same for the third consecutive period. In fact, strong performance across key market locations prompted management to raise sales view for 2018. Further, the company's cost-saving efforts are also praiseworthy and significantly aided the company's performance in the reported quarter.

On the flip side, the company's performance continues to face challenges from rising input costs. This has been marring investors' optimism in the stock, which has declined 16.4% in the past six months compared with the industry 's fall of 12.8%...

Kimberly-Clark's sales advanced 5% to $4,731 million and surpassed the Zacks Consensus Estimate of $4,599 million. Favorable currency movements benefitted sales by 3%. Additionally, organic sales improved 2%, driven by a 3% increase in volumes and marginally offset by a 1% decline in net selling prices.

Within North America, organic sales in consumer products increased 3%, while it climbed 2% at K-C Professional. Internationally, organic sales advanced 2% across the developed market locations, while it rose 1% in developing and emerging markets.

Adjusted operating profit inched-up 0.7% to $824 million. Results were aided by higher volumes, favorable currency translations worth close to $20 million as well as reduced spending on marketing, research and general spending. Further, operating results also gained from cost savings of $90 million from the Focused On Reducing Costs Everywhere (FORCE) program. These upsides were partially offset by lower net selling prices as well as increased input costs on account of greater costs of pulp and other raw materials.

Yes, other analysis indicated that K-C’s profit margin is declining due to these price pressures, but that report shows the company is still in relatively healthy shape, with their products still in demand.

So if their bottom line is still doing well, and they plan on selling more this year, why was our Legislature thinking about giving Kimberly-Clark the “Foxconn giveaway package”? It’s couldn’t have anything to do with WMC’s support of this type of corporate welfare, could it?

Also interesting is that the United Steelworkers were also asking last week for a vote on the Kimberly-Clark bailout. Not because they necessarily support the bailout, but because K-C is making the workers try to take on pay concessions, and why should the USW workers at the K-C mill have to take concessions if the corporation is going to get bailed out?

The contrast is telling to me – GOP legislators wanted to jam through a bailout of Kimberly-Clark, but Tom Nelson the only one visibly working to get Appleton Coated reopened and rehiring as Midwest Paper. Why didn’t we hear a word from the GOP Legislature or Scott Walker’s WEDC on Appleton Coated’s situation, which seemed to be a more legitimate business issue and economic disruption to the Fox Valley than K-C’s corporate greed?

Remember when conservatives claimed that government and tax dollars shouldn’t be used to “pick winners and losers”? That sure isn’t true in this case, and it’s far from the only time we’ve seen preferential treatment in the Age of Fitzwalkerstan.

Hot Wisconsin housing market likely to be cooled off by GOP Tax Scam

Many of you may have received your updated property assessments in the recent weeks. And if you’re like me, you may be seeing a sizable increase (ours was up by 8.75%). For example, the City of Milwaukee reported a 6.8% increase in overall assessed value vs 2017 this week, increasing the tax base in a city who has been handcuffed by a lack of growth in property values in recent years.

These higher assessments match up with what the Wisconsin Realtors Association said on Monday in their March Home Sales report. The WRA indicated prices were spiking up in many areas of the state to new highs.

The lack of homes for sale in March caused existing home sales to drop and prices to rise, despite a very strong state economy, according to the most recent analysis of the Wisconsin existing home market by the Wisconsin REALTORS® Association (WRA). With year-over-year inventories down 17.1 percent, sales slipped 2.3 percent in March 2018 compared to March 2017, while prices rose 7 percent to $174,900 over that same period. On a year-to-date basis, sales were up 2.1 percent, and median prices rose 6.3 percent relative to the first three months of 2017…

"Strong demand and tight supply have pushed our prices up at nearly three times the rate of inflation over the last year," said WRA President & CEO Michael Theo. Headline inflation derived from the Consumer Price Index has been at 2 percent or higher since September of last year, and it reached 2.4 percent in March. In contrast, median prices rose 7 percent between March 2017 and March 2018. The tight labor market is pushing income levels up, but overall, affordability has slipped as both home prices and mortgage rates continue to rise. The 30-year fixed-rate mortgage averaged 3.99 percent in 2017, and it has increased nearly a half point to 4.44 percent in March. The Wisconsin Housing Affordability Index represents the fraction of the median-priced home that a household with median family income can afford to buy, assuming a 20 percent down payment and the remaining 80 percent financed with a 30-year fixed mortgage. The index was at 201 in March 2018, but it stood at 219 in March 2017 and was 235 just two years ago. The good news is that Wisconsin's affordability remains well above the national rate, which was at 159.2 in February. "Still, declining affordability is likely to be the norm this year as rising mortgage rates and rising prices are likely to continue throughout 2018," said Theo.

These signs don't stay up for long these days.

While Theo talks up the price increases, he also hints at the problems that are looming in Wisconsin’s housing sector, and the economy as a whole. If wage increases don’t keep up with annual price increases of 6-7%, home ownership will become out of reach for more individuals, and sales and prices will drop. The other possibility is that housing takes up so much of an individual’s expenses that other sectors in the consumer economy will suffer.

Another issue that Theo mentions is rising interest rates, which were in the news today as the benchmark 10-year Treasury note hit 3% for the first time in 4 years. That’s quite a change from 10-year rates that were barely above 2.0% in September 2017 and ended last year at 2.40%.

The reasons for the higher rates are two-fold. One involves a logical tightening from the Federal Reserve which raises rates when the economy is growing, near full employment, and has inflation going up. But the other deals with the increased debt that is a result of the Piece of Shit tax bill from GOP lawmakers in DC.

The yield rose as high as 2.95 percent in February, before retreating into a range for the past two months. But the prospect of a deluge of new government debt has weighed on the $14.9 trillion Treasuries market. It climbed as high as 3.0014 percent on Tuesday.

The U.S. budget deficit will surpass $1 trillion by 2020, two years sooner than previously estimated, the Congressional Budget Office said this month. At the same time, the Fed is trimming its balance sheet, meaning the amount of net new debt is poised to surge in the years ahead. Treasury has asked primary dealers to give forecasts for America’s borrowing needs over the coming three fiscal years, ahead of the next quarterly refunding on May 2.

Yields were already heading higher at the start of 2018 amid Fed rate hikes, and policy makers have shown no signs of slowing their tightening even with U.S. stock markets fluctuating in recent months.

Those higher rates are one potential headwind that can slow down the housing market, since it will cost individuals more to borrow money to buy a house. Another complication might be if the higher rates and inflation scare Wall Streeters into panic and tanks the stock market, like we saw today with a drop of 424 points in the DOW.

But one item Theo and the right-wing Realtors don’t mention as a looming problem from the housing sector is due to that garbage tax bill given to us by Paul Ryan and other GOPs in DC – where the tax advantages to home ownership are going away for many Americans, and Wisconsinites in particular. That was reiterated in a report to Congress yesterday.

About 13.8 million taxpayers will be able to claim the mortgage-interest deduction in 2018, down from more 32.3 million in 2017, estimates from the Joint Committee on Taxation show. That's about a 57 percent drop.

Already, the deduction was not used by most taxpayers. Of the 150 million or so tax returns the IRS has received annually in recent years, just 20 percent claimed the deduction, according to research from the Urban Brookings Tax Policy Center.

The anticipated drop is largely due to the near-doubling of the standard deduction that took effect Jan. 1 under the new tax law. Fewer taxpayers are expected to itemize their deductions, which is the only way to take advantage of the tax break for interest paid on mortgages.

The new report estimates that 18 million households will itemize deductions this year, down from 46.5 million last year.

Even more alarming is that the bulk of individuals who lose the deductions are in the middle-income levels, with the JCT saying that the number of people that have between $30,000 and $100,000 in income that take the mortgage deduction will drop from over 10 million in the taxes they just filed to less than 3.6 million next year. That’s the price level of people who are on the borderline between buying and renting already, and not being able to write off that mortgage interest would be a significant “CON” when the rent-vs-buy decision is made.

The Wisconsin home market may be hit particularly hard, as we are likely to have a disproportionate amount of people who will stop itemizing itemize next year. This isn’t just due to fewer people writing off their mortgage interest, but also because the State and Local Tax (SALT) exemption won’t be helping much either. SALT was limited to a total of $10,000 in the Piece of Shit tax bill, even for married couples filing jointly, which makes the deduction less cost-efficient for many individuals.

Wisconsinites in particular rely on the SALT deduction, since the state’s tax code is dependent on income taxes for more than 50% of its General Fund revenue, and property taxes are the main method of raising revenue at the local level. Not being able to write off property taxes would be yet another deterrent to buying a house in Wisconsin, and as that reality hits people over the next year, will that translate into lower housing demand as well?

When you combine the concerns of higher home prices, higher interest rates and fewer tax benefits, it sure seems like there is less reason to buy a home in Wisconsin, all things otherwise being equal. Which means that if the economy goes bad in this state, or something else happens to make people stop buying, the currently-hot Wisconsin housing market could cool off and start spiraling into “tank mode” quickly. So if you got an 8.75% increase in your assessment like I did, I wouldn't count on price hikes like that for much longer.

Dark stores would be yet another edge for corporations over Wisconsinites

One thing that is sure to remain an issue in the 2018 state elections is the "dark store" loophole, where retail and other businesses claim they should have their property assessed as abandoned stores. This ripoff not only allows these corporations to avoid paying property taxes, but it raises the property taxes of homeowners in the community, since residential properties take up a higher amount of the tax base.

The dark store issue is going to loom even larger as 2018 goes on, given that both Bon-Ton along with Toys R'Us are going out of business. That means a lot of places in Wisconsin will have empty stores that other businesses can use to try to lower their taxes for this Winter.

Steve Walters of Wispolitics is the latest to take on the dark store loophole in Urban Milwaukee, and Walters spoke with heavy hitters on both sides of the issue as part of his article.

That also worries Jerry Deschane, executive director of the League of Wisconsin Municipalities. “One of our greatest concerns is that enterprising tax lawyers have started trying to expand the dark store argument to dark banks and even dark fast food,” Deschane said, adding:

“So far they’ve been unsuccessful but there are big dollars involved… Dark store and Walgreens loopholes are already on track to shift their taxes to others and pushing residential and small business taxes up by 8 percent statewide. If we start to see more dark business tax breaks, that increase will be even higher."

But Don Millis, the veteran attorney who successfully lobbied against the dark store bill on behalf of Wisconsin Manufacturers & Commerce, said Ringhand and Deschane want to change what has “been the law in Wisconsin for nearly a century.”

In a 1922 ruling, the state Supreme Court “held that the proper measure of value of a property is what it would sell to another – not what it is worth to the current occupant, not necessarily what it cost to construct and not considering the current owner as a potential buyer,” Millis said.

Millis made one more point: Commercial and manufacturing assessments increased as a share of property values statewide from 20.7 percent in 2008 to 22.8 percent in 2017. In that same period, residential property values fell from 73.8 percent of property values statewide to 72 percent.

What Millis isn’t telling people is that while corporations are seeing their land values go up and their profits go up in the Age of Fitzwalkerstan, they were barely paying any more in corporate income taxes in Fiscal year 2017 than they were in 2011, and were actually paying less than they were 4 years prior.



That decline flies in the face of US corporate profits recovering throughout 2016 and much of 2017.



Note that the Manufacturers and Agriculture tax credit was, aka "The Big Giveaway", was phasing in throughout this time, maxing out in 2017. Now add in the significant cut in corporate income taxes in the recent tax bill from DC (which helps explain that drop in Q4 2017 profits), and it sure seems like the corporates are coming out a lot better than individuals are in Wisconsin these days.

In addition, corporate taxes dropped as a part of a percentage of overall taxes paid in Wisconsin, while individual income taxes have taken up a larger share over the same time period.

Tax categories as % of total revenues, 2015 vs 2017
FY 2015
Individual income tax 50.4%
Corporate income tax 6.9%

FY 2017
Individual income tax 51.8% (+1.4%)
Corporate income tax 5.9% (-1.0%)

So corporate Wisconsin isn’t coming close to paying their share in income taxes, either at the state and federal level, and now they want to avoid paying their share in property taxes due to this dark store loophole? There really isn't a "too much" with these lowlifes, is there. And it makes me wonder when our citizenry says "We've had enough."

Wis Democracy Campaign shows Walker, WisGOPs are owned by massive out-of-state money

Wanted to forward you to the Wisconsin Democracy Campaign's newly-released list of the top 50 donators to Wisconsin Dems and top 50 donators to Wisconsin Republicans. This list is limited to candidates for state offices (governor, AG, State Senator, State Rep, etc), as well as donations to the respective parties' campaign committees in the Assembly and the Senate, and covers the 10 years from Jan. 1, 2008 to the end of 2017.

If you look at the Democracy campaign's list of top donators to Wisconsin Democrats, they're all from Wisconsin. It includes at least three former and current elected officials, and a few big-time health care execs.

Abele, Chris & Miriam Milwaukee, WI Milwaukee County Executive $389,728.00
Uihlein, Lynde Milwaukee, WI Brico Fund $288,200.00
Kagan, Steve, Gayle, Melissa, Stephanie, & Thomas Appleton, WI Kagen Allergy Clinic $118,830.75
Abert, Grant Madison, WI Kailo Fund $110,860.00
Kelly, Terence & Mary Madison, WI Venture Management LLC $97,580.00
Bakken, Mark & Margaret Merrick Madison, WI HealthX Ventures $96,883.33
Thomsen, Mark & Grace Milwaukee, WI Gingras, Cates & Wachs $89,444.29
Katz, Donald & Rebecca Madison, WI Katz Family Office LLC $88,800.00
Faulkner, Judith & Gordon Madison, WI Epic Systems/Access Community Health Center $84,500.00
Sensenbrenner, Joe & Mary Ellen Madison, WI Center for Resilient Cities $84,420.00
Walsh, David & Nancy Madison, WI Foley & Lardner $78,250.00

Now compare that to the top contributors to Republicans in the same time period. Some of these names may be familiar to you, even though most of them don't live here.

Hendricks, Diane Afton,WI ABC Supply Co $604,500.00
Perry, Bob & Doylene Houston, TX Perry Homes $500,000.00
Uihlein, Richard & Elizabeth Lake Forest, IL Uline Shipping Supplies $395,150.00
Kern, Robert & Patricia Waukesha, WI Generac Corp $292,990.00
Fabick, Jere & Renee Milwaukee, WI Fabco Equipment Inc $288,000.00
Humphreys, David C Joplin, MO TAMKO Building Products $280,000.00
DeVos, Richard M & Helen Grand Rapids, MI Alticor $271,000.00
Adelson, Sheldon & Miriam Las Vegas, NV Las Vegas Sands/Adelson Clinic $270,000.00
Atkins, Sarah Arlington, VA TAMKO Building Products $260,000.00
Herzog, Stanley St Joseph, MO Herzog Contracting Corp $260,000.00

8 of the top 10 GOP contributors are from out of state, including GOP mega-donor slime like Sheldon Adelson and the DeVos family. If you wonder why we give so many taxpayer dollars to voucher schools, or why Walker just signed a bill reaffirming support for Israel by preventing any area of state government from boycotting Israel for human rights abuses, and why US Senate candidate Leah Vukmir was the Israel bill's biggest proponent, following the money explains a lot.

And little surprise that the list is headed with our own psychotic self-absorbed billionaire, Diane Hendricks.


Give as much money as her, and Scotty will talk to you, too.

And while the numbers are skewed a bit from the loophole in state election law that allowed Walker and other WisGOPs to raise unlimited funds for their recall elections in 2011 and 2012, it still seems noteworthy that only 4 individuals contributed more than $100,000 to Democrats in the 10-year period the WDC tracked, while at least 50 individuals gave Walker and other Republicans $100,000 or more. You wonder why Walker doesn't seem to have a clue about the issues that everyday people deal with?

Of course, one of the biggest sources of GOP in-state funding hasn't been through individual donations, but instead from dark money groups that don't have to reveal their donors. This includes the $1.5 million that John Menard gave to Wisconsin Club for Growth, an organization that served as Walker's money-laundering front in 2011 and 2012. It also doesn't include the multi-millions in "independent" expenditures from the Scott Jensen-run front group for the DeVoses and the rest of the voucher lobby, nor does it count Wisconsin Manufacturers and Commerce and other business oligarch groups.

Which reminds me, it's time to once again list who is on the Board of Directors of WMC, since they don't want you to know.

WMC OFFICERS
CHAIR
JAY L. SMITH, Chairman & CEO
Teel Plastics, Inc., Baraboo

VICE CHAIR
STEPHEN D. LOEHR, Vice President
Kwik Trip, Inc., La Crosse

PRESIDENT/CEO
KURT R. BAUER
Wisconsin Manufacturers & Commerce (WMC), Madison

SECRETARY
TOD B. LINSTROTH, Senior Partner & Past Member & Chair of Management Committee
Michael Best & Friedrich LLP, Madison

TREASURER
GINA A. PETER, Executive Vice President, Commercial Banking Division Manager
Wells Fargo Bank, Milwaukee

WMC BOARD OF DIRECTORS
DARYL ADEL, Business President
Kerry, Beloit

SIDNEY H. BLISS, President & CEO
Bliss Communications, Inc., Janesville

DAMOND WILLIAMS BOATWRIGHT, Regional President – Operations
SSM Health Care of Wisconsin, Madison

STEVEN G. BOOTH, President/CEO
Robert W. Baird & Co., Inc., Milwaukee

DAVID H. BRETTING, President & CEO
C.G. Bretting Manufacturing Company, Inc., Ashland

THOMAS A. BURKE, President & CEO
Modine Manufacturing Company, Racine

NATE CUNNIFF, Senior Vice President – Business Banking
BMO Harris Bank, Brookfield

DANIEL DEFNET, Executive Vice President, Commercial Banking
Johnson Financial Group, Racine

BRAD W. DENOYER, CPA, Partner
Baker Tilly Virchow Krause, LLP, Madison

JOHN N. DYKEMA, President/Owner
Campbell Wrapper Corporation; Circle Packaging Machinery, Inc., De Pere

PHILIP B. FLYNN, President & CEO
Associated Banc-Corp, Green Bay

JEFF T. FRENCH, National Managing Partner, Consumer & Industrial Products
Grant Thornton, LLP, Appleton

PHILIP C. FRITSCHE, SR., President
Beaver Dam Area Chamber of Commerce, Beaver Dam

LOUIS P. GENTINE II, CEO
Sargento Foods Inc., Plymouth

ROBERT GERBITZ, President & CEO
Hendricks Commercial Properties, Beloit

MICHAEL F. HAMERLIK, President & CEO
WPS Health Solutions, Madison

STEVEN H. JOHNSON, Factory Manager
John Deere Horicon Works, Horicon

WILSON R. JONES, President & CEO
Oshkosh Corporation, Oshkosh

PATRICIA LEONARD KAMPLING, Chairman & CEO
Alliant Energy Corporation, Madison

ROBERT L. KELLER, Chairman
J.J. Keller & Associates, Inc., Neenah

SUZANNE KELLEY, President & CEO
Waukesha County Business Alliance, Waukesha

CLIFFORD J. KING, CEO
Skyward, Inc., Stevens Point

JAMES M. LEEF, President & CEO
ITU AbsorbTech, Inc., New Berlin

ALLEN L. LEVERETT, President
WEC Energy Group, Milwaukee

SCOTT A. MAYER, Chairman & CEO
QPS Employment Group, Brookfield

JAMES J. McINTYRE, President and CEO
The Greenheck Group, Schofield

J. R. MENARD, Executive Vice President & Treasurer
Menard, Inc., Eau Claire

ROSALIE F. MORGAN, President
EMCS, Inc., Milwaukee

ROBERT MOSES, President & CEO
Prairie du Chien Area Chamber of Commerce, Prairie du Chien

BARBARA NICK, President & CEO
Dairyland Power Cooperative, La Crosse

MICHAEL NIKOLAI, President, COO & CEO
Waupaca Foundry Inc., Waupaca

JAMES J. OSTROM, President & CEO
Milk Source LLC, Kaukauna


Lets keep this "top 50 donors" list from the Wisconsin Democracy Campaign in mind over the next 6 1/2 months, as I bet we can make many connections as a result.

"Repay, do not forget." - Robert Plant, "The Battle of Evermore"

Oh, NOW Scott Walker believes in helping Sconnies get health care, broadband?

This week, Governor Walker sent a waiver to the US Department of Health and Human Services to formally get approval for his plan to prop up insurers that have policies on the Obamacare exchanges. And just in time for the waiver submission, the Walker Administration claims that the reinsurance program, which was projected to cost $50 million in state dollars next year, will cut premiums AND not be as expensive for state taxpayers!

Absent federal action (to get rid of the ACA program we are now taking advantage of), Wisconsin’s Health Care Stability Plan creates a reinsurance program to cover costs in Wisconsin’s individual market. The program will provide $200 million in reinsurance funding. Under the program, Wisconsin estimates it will pay $34 million for reinsurance in 2019; the federal government will pay the remaining $166 million in “pass through” funds representing federal savings from the program. The program will provide coverage for claims between $50,000 and $250,000. The Wisconsin Health Care Stability Plan is estimated to pay 50 percent of those costs up to $200 million.

Upon federal approval of the 1332 waiver, Wisconsin estimates premiums will be reduced by 10.6 percent from levels that otherwise would have occurred, resulting in a 5 percent decrease in 2019 premiums, compared to 2018.

Two quick observations here.

1. Where's the proof of premiums going down? From what I can tell, Walker cites some study by an Administration-paid consultant, and it's accompanied by information that the Office of the Insurance Commissioner presented as part of this 1332 waiver. I have strong suspicions that the reason any premiums would drop is because people would choose plans with less coverage than they did before.

In addition, as Citizen Action has pointed out in the past, Walker's Insurance Commissioner won't use his power to force health insurance corporations to keep their premium hikes in check. Why would they start now? But again, I don't have the evidence that they used to make this claim (if there is any).

2. Oh, NOW Walker is cool with having the Feds cover more of the costs associated with ACA coverage? When the Feds would have paid 100% of expanded Medicaid for the past 5 years, Walker said it was too risky because one day expanded Medicaid might go away. But now that Walker faces the voters in November and that Obama isn't in the White House any more, all of a sudden getting the Feds to pick up the tab doesn't seem like such a bad deal in WalkerWorld.

How would the Feds pick up more of the tab? Here's what the OCI claims.

Waivers can be funded by “pass through dollars”
 If the federal government will save money it would have otherwise spent in subsidies absent the waiver, the state can use those “pass through dollars” to help fund
the program...

The plan creates a “reinsurance” program to cover costs in the individual market
 Reinsurance is insurance for insurance companies

 The program would provide coverage for claims between $50,000 and $250,000
 Under the program, the state would pay between 50% and 80% (likely between 50-60%) of those costs up to $200 million.

Basically, it would bail out companies that are on the ACA exchanges and have to pay high-cost claims. Because the ACA limits the amount of profit an insurance company can keep, the insurance companies then jack up the prices of premiums for everybody that gets insurance on the exchanges as their own version of insurance.

Now that the state would be backing this up, the theory (as I can figure it) is that premiums would be lower, and therefore the feds wouldn't need to pay as much in tax credits to low-income people that buy insurance on the exchanges so they'd give back a lot of these funds to Wisconsin as a "thank you".


Wouldn't Medicare/Badgercare for all make more sense at this point?

Seems like a lot of "ifs and hopes" to me, but because the money won't be spent until Fiscal Year 2019, it'll be unknown what the effect is until after the 2018 elections. Which is quite...convenient.

On a related note, where is Walker getting the information that asserts the Feds will continue to pick up more of the tab of this reinsurance plan? Given that Paul Ryan keeps making noise about "cutting entitlements" like Medicaid and and that Trump and the GOP Congress have sabotaged cost-sharing subsidies in the past, why would Walker assume there'd be more money coming from DC to bail state taxpayers out in this scheme? Especially as the US's budget deficit skyrockets under these stupid tax cuts?

The same reversal has happened on the subject of rural broadband, where Walker is trying to brag about putting in more money to expand this infrastructure, after keeping Wisconsin behind for years due to bad choices in the past.

Governor Scott Walker today announced the Public Service Commission of Wisconsin (PSC) has awarded the largest round of Broadband Expansion Grants in state history with $7.68 million in total preliminary awards leveraged to $19,468,725 in private matching funds. 46 new grants have been awarded to extend high-speed internet access to as many as 1,600 business locations and 18,000 residential locations . The awards announced today are preliminary and will be finalized upon the issuance of the Commission’s written decision and the expiration of a 10-day appeal process. In addition, Governor Walker announced the opening of application process for next round of grants.

“Broadband has endless potential to help Wisconsin communities,” said Governor Walker. “Years ago, electricity revolutionized farming for my grandparents. Today broadband is revolutionizing education, health care, and business, and improving the quality of life for Wisconsin’s rural residents. With this historic round of Broadband Expansion Grants, we are another step closer to connecting every Wisconsin community.”

In this budget, Governor Walker increased total broadband investments by $35 million and created a permanent Broadband Expansion Grant program. Prior to today’s awards, the PSC has awarded 55 Broadband Expansion Grants totaling $5,452,000 since Governor Walker took office.

Ooooh, $7.68 million in reused USF fees to expand broadband in Wisconsin? Sounds great, until you realize that Walker turned down $23 million from the Obama Administration that would have done the same thing 7 years ago. And this time, it's Wisconsin ratepayers that are funding these expansions, instead of the Federal government.

Yes, it's nice to see broadband finally get expanded into areas of the state that needs it. But I give this Governor no credit for doing something he should have been doing from day 1, especially given that it was clearly done to spite the efforts of the Black Man that was in the White House. They tried to strike a pose against Obama to stir up the rubes and get attention from national interests, but those stunts hurt this state long-term, and they cannot be left off the hook for doing a scaled-down version of WHAT THEY SHOULD HAVE BEEN DOING ALL ALONG.

Let's not forget that these pre-election moves are an admission by the Walker Administration that their previous strategy failed. And there's no reason to think these cynical sleazes will continue to go down the path of responsibility if the people of Wisconsin are foolish enough to keep them in power after 2018.

Instead, why not remove that uncertainty over what will follow (remember when Walker would claim "uncertainty" was an economic problem?), and get someone in who recognizes that federal spending should be used to help Wisconsinites, and not only be grabbed onto as a desperate pre-election ploy.