Monday, January 21, 2019

2 days good, then one day not so much

Fortunately, I was able to escape the snow and cold just in time, and got out West to meet friendsdiscover the great possibilities of America.



And for 2 days everything went right, including a great UW upset of Michigan on Saturday. Then came Sunday, I got cute, the Saints got victimized on one of the worst non-calls I've seen, and things spiraled from there.



Now it's time to hope the flight works out, brace for the cold, and get back to business. Till we meet again...
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Saturday, January 19, 2019

Foxconn fails in jobs while succeeding in taking money from rest of the state

So Foxconn couldn't even hire 260 people last year? Well then they don't get the handful of dollars they were supposed to from that.

Unfortunately, as Tamarine Cornelius of the Wisconsin Budget Project reminds us, Foxconn is still going to get a ton of money from Wisconsin taxpayers, even if they never hit a jobs goal in this year or any other year.


Never forget that all that money getting funneled down to the SE corner of the state could have fixed a whole lotta Scottholes in the rest of the state. And it's already falling short of the jobs Foxconn claimed it would add.

Can we just cut these guys a check for $100 mil and have them go away so we don't continue to be handcuffed by this albatross down the line?
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Friday, January 18, 2019

"Prosperity"? Where is that happening in Wisconsin?

Here's a look at what WisGOP is trying to spread along with their tax cut plans, courtesy of Joint Finance Co-Chair John Nygren.

Yeah, I don't think so.


Oh wait, Nygren means the "Prosperity" of his corporate donors and GOP wingnut welfare orgs. He's not talking about his district back in Marinette Co, which continues to bleed jobs and people. Which tells you who Johnny's real constituents are.

See kids, this is why you need to lay off the Koch. It makes you say really dumb things.
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Thursday, January 17, 2019

GOP tax cut looks good on paper, but Evers sees through it

With the economy moving along, and being pumped up beyond potential in 2018 due to the GOP Tax Scam, it means that many states have decent finances due to continued job growth and less need for services such as Medicaid and unemployment benefits. And Wisconsin is among that group of states, as they ended Fiscal Year 2018 with $588 million in the bank. This led the Wisconsin GOP to break out their typical strategy when faced with such a situation - cut taxes!
The Republican proposal would use a budget surplus to expand the sliding scale standard deduction for the individual income tax to give "targeted relief to the middle class," said state Rep. Terry Katsma, R-Oostburg, in a news conference announcing the plan...

Assembly Speaker Robin Vos, R-Rochester, said Republicans introduced the plan on Thursday so the governor could include it in his upcoming State of the State address, scheduled for Jan. 22. Evers has said he will include his tax proposal in the state budget, but Vos said he wants the Republican plan to be passed outside of the budget process.

"What a fantastic chance for (Evers) on Tuesday to say, 'I accept the offer of legislative Republicans to be able to use the surplus they developed' for the tax cut that he wants," Vos said. "Seems like a win-win to me."

Big fish, small ponders unite!

Umm, Robbin', "the surplus [the legislative Republicans] developed"? That money is only available because of years of WisGOP underfunding schools, roads and local government, and as the Wisconsin State Journal's Matt DeFour pointed out today, money in the bank does not mean you have a "surplus".



But let's set aside the debate about what to do with the extra money can be set aside for the time being, and take a look at what the Assembly GOP proposed today. As the Legislative Fiscal Bureau explains, the GOP’s tax cut would cut taxes by lowering the amount of money that is taxed in Wisconsin. For 2020, the LFB estimates this would affect married couples that make less than $155,413, and single people that make less than $127,408.
The proposal would increase the maximum deduction by 20.6% for each filer type, increase the income levels for beginning the deduction phaseout by 17.6%, and modify each of the phaseout percentages so that they are closer together…
After looking at the LFB analysis and this year’s state tax form (it’s line 15, and page 55 of these instructions shows how much the deductions are today), it sounds like a decent idea. It lowers taxes specifically for people in the middle and upper-middle classes, drops the tax burden of some lower-income Wisconsinites to $0, and the rich don’t benefit at all (they would still make too much to get anything from this expanded deduction).

While the changes seem cosmetic, the LFB says it’ll boost take-home pay for most middle-income taxpayers by a few hundred dollars a year. And that adds up to a sizable price tag.
The proposal would reduce individual income tax collections by an estimated $490.2 million in 2020-21, the second year of the upcoming 2019-21 biennium. The proposal would require the Secretary of the Department of Revenue to change withholding tables to reflect the decrease, effective no later than July 1, 2020, resulting in a one-time revenue reduction of $152.1 million in 2020-21. If the Secretary acts before the specified date, some of the one-time effect would occur in 2019-20…..For the 2020 tax year, the decrease is estimated at $338.1 million.

This amount also includes interactive effects related to the state’s itemized deduction credit (see Schedule 1 on your state tax form for more info). Because the calculation of the credit is based, in part, on the claimant’s standard [state] deduction, a higher standard [state] deduction will result in a decrease in tax credits. For tax year 2020, itemized deduction credits are estimated to decrease by $55.0 million, from $3160 million to $261.0 million.
And it’s not just the cost that exposes the trickery to the GOP’s tax cut plan. It’s not slated to start until 2020, and while there might be a minor bump in take-home pay before the 2020 elections (via the lower withholdings), Wisconsinites won’t see most of the benefit from this until they file their taxes in early 2021 – after the next election.

It’s pretty easy to see a scenario where this tax cut is agreed to (and GOPs take credit for it) before the 2020 elections. But after those elections, the tax cut becomes a $676 million hole in the next budget, which would keep Evers from starting new initiatives. If the plan works even better for WisGOP, then this tax cut leads to a budget deficit (as we saw in a similar pre-election surplus giveaway in 2014).


As that cartoon illustrates, a budget deficit would then force Evers to have to raise taxes or propose budget cuts, which would give Republicans something to run against in 2022. And we all know GOPs are better at whining about “libs” than actually telling voters the truth about their disliked and failing policies.

Fortunately, it seems like the Evers Administration recognizes this as the cynical gimmick it is, as spokeswoman Melissa Moore Baldauff came out within a few hours to point out where the GOP’s plan falls short.
The governor’s sustainable plan to cut taxes for middle-class families—which is funded by rolling back tax giveaways for millionaires—would provide relief for 86 percent of taxpayers without adding to the deficit or relying on one-time funds.

In contrast, Speaker Vos’ spending plan continues to grow. Between this unfunded proposal, their refusal to accept federal funds to expand Medicaid, and growing legal fees for outside counsel to defend their lameduck laws, Republicans are willing to leave taxpayers on the hook for hundreds of millions of dollars.

It is our hope that legislators who believe in protecting the taxpayers and our state’s bottom line will support the governor’s sustainable tax plan.”
And by the way, we might not have the extra money to blow in the first place. Also on Thursday, the Department of Revenue released the state’s collections for December, and it included this shocking detail.

Adjusted Income Tax collections, Wisconsin
Dec 2018 vs Dec 2017- DOWN 19.8% (-$195.1 million)
First half of FY 2019 vs FY 2018- DOWN 0.04% (-$1.8 million)

Now maybe it’s a weird calendar quirk, as the timing of the end of the year fell on extended weekends in both years. But the Wisconsin DOR seems to be aware of that.
For fiscal years (FY) 2018 and 2019, the adjusted line includes withholding that was received on the first working day of January, rather than the last day of December, which was a weekend or a holiday. The year-to-date amounts were affected for both fiscal years.
That withholding amount on January 2nd was $258.2 million in 2018 and $72.5 million this year, and that’s a lot (but not all) of this difference. But it still doesn’t explain why revenues are flat for the first 6 months of the fiscal year.

The revenue estimates the outgoing Walker Administration made back in November had income taxes going up by 3.99%. If they end up flat, that’s a “miss” of more than $338 million – ironically, the same amount that the tax cut will cost for the first year it’s in effect – and the remaining revenues wouldn’t even make up half the difference as it stands today.

If revenues come in soft for 2018-19 and lowers the $623 million that’s supposed to be carried over, it means there is less money to give away in tax cuts for future years. Now add in the shaky outlook of the US economy over the next 2 years and the unknown effect that the GOP’s Tax Scam from DC will have on how much (or how little) is filed in taxes over the next 3 months, and there are a lot of variables that still have to play out.

Also remember that GOPs already cut income taxes by $60 million a year during the Lame Duck session last month, (with most of it going to the rich). It seems Evers and his administration would be wise to continue to call out this GOP tax cut plan as the cynical scam it is, and say the debate over tax cuts can come during budget deliberations when we know more about how much money we have to play with, and what that money could be invested into instead of giving it away.

Either that, or Evers should throw another gambit. Make the GOPs start the tax cut THIS year, and pay for it by getting rid of the wasteful M&A credit, and have it be both fiscally responsible and with more immediate impact for Wisconsinites. I’d love to see the pretzels Robbin’ Vos and Nygren and the other GOPs turn into as they justify making Wisconsinites wait a year for a tax cut that the WisGOPs can’t wait to put into law.
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Shopko joins the list of Wisconsin store closings, which means higher tax bills for homeowners

After the Christmas season often comes a reckoning in the struggling retail sector, and we saw that again yesterday, with a major Wisconsin retailer announcing that they will close stores in large numbers as it can’t keep up with its debt payments.
Shopko has filed for bankruptcy -- and is closing 38 stores as part of its restructuring efforts.

The Ashwaubenon-based retailer announced Wednesday that it has obtained $480 million in financing from lenders led by Wells Fargo to fund and protect its operations while it goes through bankruptcy. Shopko has also asked the federal bankruptcy court in Nebraska to allow it to continue to pay wages, salaries and benefits, and pay vendors and suppliers during the bankruptcy process.

“This decision is a difficult, but necessary one,” CEO Russ Steinhorst said in a news release. “In a challenging retail environment, we have had to make some very tough choices, but we are confident that by operating a smaller and more focused store footprint, we will be able to build a stronger Shopko that will better serve our customers, vendors, employees and other stakeholders through this process.”

Court documents list the company's assets at between $500 million and $1 billion, with liabilities estimated between $1 billion and $10 billion.

Coming to a town near you?

Those 38 store closings are in addition to last month’s announcement of numerous other stores closing, and Shopko selling off its pharmacy business. 16 of those stores are in Wisconsin (you can see the list here), and all are scheduled to be shut in the next 3 months.

Sears is already in bankruptcy, and faced the prospect of a full liquidation with a loss of 45,000 jobs before CEO Eddie Lampert said he would bump up his offer to $5.2 billion. And like Shopko, excessive debt seems to be a main reason.
A creditor group had been calling for its liquidation, saying they would recover more in a wind-down and through lawsuits against ESL for deals it had done with Sears in the past. Lampert has said they were proper.

Sears had believed Lampert’s earlier bids fell short of covering the bills the retailer has racked up since filing for bankruptcy protection in October. A bedrock principle of bankruptcy cases is that those expenses must be fully repaid.

The retailer is one of the highest-profile victims of the financial carnage in retail to date as online shopping on sites including Amazon.com Inc soared in popularity.

Unlike Sears, which plans to remain in business, toy seller Toys “R” Us Inc and department store The Bon-Ton Stores Inc closed down last year after losing the support of debt investors or failing to find a buyer.
I know a lot of this is simple structural change as more people buy things online (I’m as guilty as the rest of you). But it’s going to mean a lot of vacant stores and properties taken off of tax rolls in communities. Which means homeowners will make up the difference in higher property taxes.


Even with stores that survive, there may be an impact on homeowners’ taxes due to the “dark store loophole”, which equates the assessment value of big-box retailers to these empty stores. This lowers the assessments on the retailers, which then moves more of burden onto homeowners.

In addition to those retail issues, let me add that other businesses are benefitting from a repeal of much of the personal property tax in the last state budget. This winter is the first time we saw that effect on our tax bills, although homeowners were somewhat protected due to $74 million in state payments of regular tax dollars that were sent to local communities.

Between the closings, the dark store loophole, and the personal property tax giveaway, it seems like a very good time for Governor Evers to propose some kind of shift back that benefits homeowners. By doing so, Evers would be following the will of voters in all corners of Wisconsin, who want the dark store loophole closed.

That, along with other forms of tax fairness, should be a centerpiece of Evers' first budget, as a way to reverse the one-sided structure put in place during the Age of Fitzwalkerstan.
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Wednesday, January 16, 2019

Gov Dropout gets schooled by AOC (and reality) on taxes

Our Fair ex-Governor continues to audition for a job on the "invited speaker to right-wing oligarchs" circuit, and threw out this ridiculous take yesterday.



This was Walker attempt to riff off of US Rep. Alexandria Ocasio-Cortez's "60 Minutes" interview from last week, where she proposed a 70% income tax rate on people making $10 million or more I talked about it and the 70% income tax level in this post).

AOC got word of what ex-Gov Dropout said, and easily brushed him aside.



This is where I remind you that AOC has two things Scott Walker doesn't.

1. Private sector job experience in the last 26 years.
2. A college degree.

Needy adolescent that he is, Walker kept tweeting, and tried to float this line.



Of course, that "crisis of confidence" was because the country had just gone through the disasters of Watergate and Vietnam, and was getting screwed over in an oil crisis caused by actions by OPEC countries. But the job situation under Carter between the end of 1976 and the end of 1979 was very good. The US added 10 million jobs in that 3-year stretch, and the rate of growth in each of those 3 years that was faster than any year we've had since 1999.

In addition, when we had 70%-90% taxes on the rich after World War II, workers received wage growth that matched the productivity they were adding to the economy, unlike the last 40 years when taxes have been cut for the rich.


Going back to AOC’s comments, online publication “The Hill” hooked up with HarrisX to ask people what they thought about what she said, and it turns out a sizable majority of Americans want a high tax rate on the rich.
In the latest The Hill-HarrisX survey — conducted Jan. 12 and 13 after the newly elected congresswoman called for the U.S. to raise its highest tax rate to 70 percent — a sizable majority of registered voters, 59 percent, supports the concept.

Ocasio-Cortez has not introduced any legislation to enact the concept but the survey shows a broad cross-section of Americans supports it, at least presently….

Increasing the highest tax bracket to 70 percent garners a surprising amount of support among Republican voters. In the Hill-HarrisX poll, 45 percent of GOP voters say they favor it while 55 percent are opposed to it.

Independent voters who were contacted backed the tax idea by a 60 to 40 percent margin while Democratic ones favored it, 71 percent to 29 percent.
The poll was specific enough to mention this key fact about Ocasio-Cortez’s plan, that the 70% rate only kicks in on income past $10 million. Which helps to explain why right-wingers like Scott Walker lie and imply it's 70% on ALL income – they’d lose the argument if they told the truth about how the marginal tax rates really work.

Meanwhile, how’s that GOP Tax Scam coming along? You know, the one that lowered tax rates for the rich and (especially) corporations, and one that Scott Walker vociferously backed in 2018? Bloomberg’s Stephen Gandel took a look, and it’s even worse than you thought.
First, the headline number: $600 billion, at least. That’s how much more than expected I estimate the companies in the S&P 500 are on pace to save. It is also how much more the tax cut is likely to add to the national debt if it runs as planned for 10 years. The total savings for all of corporate America will be well into the 13 figures.


In late 2017, soon before Congress passed the tax cut — which reduced the U.S. corporate rate to a flat 21 percent from a previous marginal rate that topped out at 35 percent — the Joint Committee on Taxation estimated it would cost $1.4 trillion over 10 years. White House officials criticized that estimate as being too high. In fact, it wasn’t nearly high enough. My current estimate, now that companies have completed 2018, is nearly $2 trillion, and that’s just for the S&P 500. That’s nearly $400 billion more than I calculated in May. And the actual bill could rise even more while the lasting benefits are still pretty questionable.

Corporate profits for the S&P 500 companies did rise nearly 24 percent in 2018, the biggest jump since late 2010. About half of that income growth came not from an improvement in operations but from lower corporate tax bills, according to my math. That was also more than previously expected. Analysts had thought the tax cut would represent only a third of 2018 profit growth. But it appears the tax cut was either larger than anticipated, didn’t produce as big an economic boost that many said it would, or more likely a combination of the two.
So companies got their taxes cut, and it cosmetically increased their profits and earnings per share, but it didn’t make the average worker any better off. Funny how that happens.

Meanwhile, the deficit seems likely to jump past its already astronomical level, and that’s before accounting for any recession that might hit in the next 2 years as the inevitable hangover from this unneeded stimulus kicks in.

The more you investigate the tax-related claims of ex-Governor Scott Walker and US Rep. Alexandria Ocasio-Cortez, it's pretty obvious that "socialist" new Congresswoman AOC has a lot more of a clue about what really happens with tax policy than Wisconsin's former Governor. Which goes a long way toward explaining why that lifetime grifter politician is now looking for a new job himself these days.
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Tuesday, January 15, 2019

"Cheddar Revolutionaries" did Trumpism before Trump. Now they're gone

One huge difference in 2019 is how many Wisconsin Republicans have been diminished and taken out of power, after rising throughout much of the 2010s. Then-Governor Scott Walker was a national figure in the mid-2010s, and though he could ride his union-busting and connections to big money to the presidency. Reince Priebus was the head of the Republican National Committee, and later became Donald Trump's first Chief of Staff. And Congressman Paul Ryan was Mitt Romney's 2012 VP candidate, and then became Speaker of the House in 2015.

And now, all 3 are out of any kind of governmental office, either because they couldn't handle being in the Trump White House (Priebus), being scared of facing the voters in the 2018 elections (Ryan), or getting booted out by those voters (Walker). Former UW Professor Don Moynihan took a look at the fall of the “Cheesehead Revolution,” and says Donald Trump plays into its end. But that's because Trump exposed the dark side of what Wisconsin Republicans had run on for years, and as Trump fell out of favor, so did the Wisconsinites.
It is all too tempting to diagnose the end of the cheesehead revolution as a victim of Trumpism. It is also wrong. The reality is more interesting. Priebus, Walker and Ryan saw Trump for who he was, but embraced him regardless. They continue to do so. At the end of the day, there was perhaps more overlap between their views and Trump than any would care to admit….

In all cases, the leaders of the cheesehead revolution served Trump’s wishes, and were careful to avoid criticism even when Trump no longer had power over them. Ryan’s farewell address bemoaned a “broken politics” and U.S. isolationism, but studiously avoided naming the president.

Even if the cheesehead revolution was more spin than reality, its demise is telling. The truth is there was a lot of Trumpism in the cheesehead revolution. The fierce partisan division evoked by attacking public employees. A series of Ryan budget blueprints that preached fiscal discipline but prioritized tax cuts. The willingness to impose work requirements as a condition of welfare. Government support for corporations like Foxconn. Such policies preceded Trump and became the basis for his co-optation of his former critics.

In retrospect, the initial resistance of Priebus, Walker and Ryan to Trump seems to have been about style rather than substance. Trump’s unabashed vulgarity clashed with their studied Midwestern earnestness. Once they saw that Trump’s style was key to his success — and by extension defeating the Democrats they demonized — their reservations melted away. The cheesehead revolution was not a missed opportunity for conservatism. Instead, its epitaph should read that they knew better, but embraced a deeply flawed leader anyway.

Losers all

Let's face it. Is there really much difference between Trump’s demonization of immigrants and lifetime politicians like Walker and Ryan making race-tinged “hammock” references to welfare recipients? Heck, Trump approved of Walker's "reforms" that are forcing work requirements on Medicaid recipients, a policy whose main outcome seems to be a way to create barriers to benefits over trying to help people find work. The Medicaid changes also has a side benefit of giving off an image of making it hard on "THOSE PEOPLE", which appeals to a certain type of mediocre white person.

This GOP two-step is manifesting itself again as the Republicans deal with US Rep. Steve King's history of racism and general regressive idiocy. King was stripped of all committee assignments this week after being quoted in an interview asking "What's wrong with white supremacy"?, and then doubling down on that question on the House floor. But it's far from the first time that King has made statements along these lines, and Esquire’s Charlie Pierce found it interesting that Republicans are just now figuring out that racist statements and policies are a bad idea.

Pierce adds that this week’s reactions by GOP House leadership makes a certain Wisconsinite look worse, if that’s possible.
So Kevin McCarthy, the Minority Leader of the House, moved on King, which gives us another chance to toss an elbow at former Speaker Paul Ryan, the zombie-eyed granny-starver from the state of Wisconsin. Ryan was perfectly fine with having an outright white-supremacist in his caucus for more than a decade because Ryan never found the political gumption to bring the wild kingdom there under control.

Many Republicans—including Willard Romney—have now piled on as well. (Ted Cruz, whose Iowa campaign in 2016 King helped run, puffed out some nondescript squid ink over the weekend.) None of them, of course, have addressed the real facts about Steve King—namely, that he was nurtured and produced in the same conservative Republican terrarium as all the rest of them, Paul Ryan and Kevin McCarthy included. King bloomed more lushly and more exotically, but he's of the same genus. Now, they're all required to pretend that they never understood how this lethally poisonous plant sprouted in their midst. I wonder how long the delusion can last. I've been wondering that for three decades now.

Soooo punchable. And weak.

Just like how Mitch McConnell should be fielding much of the blame for the current government shutdown for refusing to put a bill on Donald Trump's desk, so it is the fault of Wisconsin Republicans (and their spokespeople on AM radio) for creating the divisive environment that led to many of the problems in the state and country today.

And just like how the GOP's "Cheddar Revolution" foretold the party's turn to Trumpism, may the 2017 and 2018 falls from power of GOPs in Wisconsin foreshadow the end of the racist and idiotic tenure of Trump and his enablers.
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