CPI goes up, and yet Wall Streeters think that inflation situation got better?

After a moderate increase in the Producer Price Index of 0.2% on Tuesday, many were looking at the inflation report from the consumer side, which hit today.

JUST IN: Inflation remains stubborn. Inflation rose 2.9% (y/y) in December —> the highest annual increase since July. For the month of December alone, inflation rose 0.4% —> the highest since March. Energy (esp. gas) accounted for 40% of the increase. Food also up. Core CPI rose 3.2% (y/y).

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— Heather Long (@byheatherlong.bsky.social) January 15, 2025 at 7:37 AM

Inflation is back near 3% (it was 2.9% in December). The Fed's goal = 2% "Core inflation" down in December, but that's not much comfort to the middle class. Bottom line: It's going to be a battle in 2025 to get inflation fully gone. This is a warning to Trump as he readies tariffs and big tax cuts

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— Heather Long (@byheatherlong.bsky.social) January 15, 2025 at 7:42 AM

Well, that's not going to be good news for the financial markets, who have been worried about the spectre of inflation going back up, which caused Treasury yields to run up over the last month. So it's a down day on Wall Street, right?

WHAT? To me, this would seem like things are going in the wrong direction. And with oil futures back above $80 for the first time in 6 months, that's not help calm down inflation. So why was it such a good day for stocks?

Prices climbed 0.2% month-on-month on a "core" basis, which strips out the more volatile costs of food and gas, an easing from November's 0.3% gain. Over last year, core CPI rose 3.2%.

Until the latest print, annual core CPI had been stuck at a 3.3% gain for the past four months. December was the first time since July that the metric reflected a deceleration in price growth.

The 10-year Treasury yield dropped over 13 basis points to trade around 4.65% after the cooler-than-expected reading. It had been up at its highest level in more than a year, serving as a headwind for stocks. The interest-rate-sensitive small-cap Russell 2000 Index soared in reaction, rising almost 2%.

So the Wall Streeters looked at a relatively tame core CPI and ignored the fact that Americans were paying higher prices overall. Interesting choice.

I looked inside the CPI report, and there isn't a lot there that indicates the 0.2% increase in core prices for December is any major change in direction vs the 0.3% increase in November. Shelter was up 0.3% last month, just like the month before (and up 4.6% for all of 2024). New vehicles were up 0.5% vs 0.6% in November (both are big numbers), and used vehicles went up 1.2% after a 2% increase in November and 2.7% in October. Airline fares jumped by 3.9% in December, and had a 3.2% increase in October. Apparel was up 0.1% vs 0.2% for November, but that's only gone up by 1.2% over the last 12 months, so that wasn't really going up to begin with.

I think these Wall Streeters are trying to make lower inflation and lower interest rates happen by their hopes, and not going on what actually was in that report. And there's nothing in the inflation reports of this week that tell me the story is any different than what we had going into the week. We have a strong jobs market with low unemployment, and prices continue to rise at an elevated but not destructive level of 2.5-3%.

Good spot to be in, but nothing that should cause the Fed to change course from what they indicated last month. As I plan to head to Vegas this weekend, the attitude of these coked-up traders with the Trump Inauguration looming reminds me of the scene in The Big Short that takes place in Sin City, where the people who have seen through the fraud and house-of-cards nature of the US housing market take advantage of a number of morons in the mortgage industry that are high on their own supply.

Yeah, we got $4 billion in the bank. But big needs remain, and Trump/GOP isn't gonna help

As another Wisconsin budget cycle begins, we again are likely to have several billions of dollars that are available to be played with. But as WTMJ host and Journal-Sentinel columnist Kristin Brey notes, just because there's a lot of money in the bank, it doesn't mean that all of our needs are taken care of in this state.

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Brey went into more detail at the JS website as to the problems and costs to our economy that are a result of not using those extra dollars in the bank to take care of these needs. In addition to the numerous years of the GOP Legislature refusing to add adequate funding to either the UW System or K-12 schools, Brey points out that there are other areas that need to be attended to in Wisconsin.

➤A child care industry on the brink? Nearly nine in 10 working parents say child care costs them time and productivity at work. Lost wages and fewer sales mean less tax revenue for local, state and federal governments. The Council for a Strong America estimates the child care crisis already costs Wisconsin families, businesses and governments a combined $1.9 billion every year.

➤Municipal and county governments struggling to provide local services? Despite 2023's monumental Act 12 shared revenue bill last year, local leaders from municipalities and counties across the state say the changes fell short of solving their budgetary challenges leaving some to turn to operational referendums to raise the local property tax levy just to maintain the services they currently provide.

➤Do we have two state prisons that are literally uninhabitable? 2024 was marked by a lot of troubling news about our corrections system. From lengthy lockdowns, to inmate deaths, to spotty medical care and even the arrest of Waupun’s warden and staffers for alleged misconduct and abuse. We also still have two (barely) operating state prisons that were built in the 1800s that state leaders haven’t been able to find the political will to close for almost half a century.

➤A looming assisted living and nursing home crisis? The “Silver Tsunami” is coming, but our assisted living and nursing home quality and accessibility are already under duress. Understaffed facilities, underpaid and undertrained employees, some of the lowest Medicaid reimbursement rates in the country, increased demand for high-needs facilities, all of these problems will only get worse across Wisconsin in the coming decade if left unaddressed.

➤Are middle and lower class people struggling to get by? Republican lawmakers have made it clear that their priority this year is to provide tax cuts. Will they prioritize giving the bulk of the benefits to the more needy filers making less than $100,000 instead of those making more than $100,000?

Even before we get to tax cuts, we need to remember that state agencies have already asked for much more money in this budget to handle their needs compared to the money that might be coming in to the state's coffers. As a result, if all those requests were funded, the Evers Administration says we'd see that $4 billion be gone by the end of this next biennium.

That reality of large unmet needs makes it all the more cynical and absurd that Assembly Speaker Robbin' Vos and GOP Senate Leader Devin LeMahieu want to pass a tax cut bill before the spending part of the budget is even introduced. And you can bet that tax cut won't be anything that gives most of the benefits to middle and lower-income Wisconsinites - and might not give them anything at all. In addition to what will likely be a regressive scheme, the tax cut would be intended to limit the amount of available funds to make it near-impossible to fund most of the needs that we still have.

That's all the more reason for Governor Evers to veto that scheme and put his own tax package in the larger budget, but I'd also add that we need to wait to see if the Trump Administration and the GOP Congress are able to impose the austerity measures that they want to sneak through. If that happens, it could reduce a sizable amount of federal money that this state is counting on for support services and infrastructure needs, and there might be a need to add more state funds just to keep Wisconsinites from falling even further behind.

So even though Wisconsin's budget picture is among the best in the nation, with lowered debt and billions in the bank, let's not pretend that there isn't a need to improve things further in how we tax people and choose to invest our tax dollars in. I'd feel a lot more comfortable in the ability to have things taken care of if we still had a Democrat in the White House, but too many dopes chose otherwise this November, and now it would be even more foolish for our state to cut taxes and refuse to continue investments to improve quality of life and economic competitiveness as a result.

Last jobs report of the Biden Era completes a great record

We got the last jobs Friday for Joe Biden's term in office. And it added to what was already an already-impressive record.

JUST IN: A strong December jobs report. The US economy added 256,000 jobs (well above expectations). Overall, the US added 2.2 million jobs in 2024. That’s about the same as 2018. Unemployment rate fell slightly to 4.1% Wages grew 3.9% in past year (well above 2.7% inflation)

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— Heather Long (@byheatherlong.bsky.social) January 10, 2025 at 7:46 AM

In fact, Wall Streeters thought the jobs report was too good. And the stock market had a significant drop as a result.

US stocks plunged Friday as investors digested a better-than-expected jobs report that soured expectations of future rate cuts from the Federal Reserve.

The Dow dropped by 697 points, closing at 41,938, while the S&P 500 fell by 1.5% and the tech-heavy Nasdaq index was lower by 1.6%....

Rising yields signal concern about a stronger-than-expected economy, resurgent inflation and potentially fewer rate cuts in 2025 than anticipated.

“The strong jobs report sent yields higher amid expectations for the Fed to pause its rate cutting cycle for a significant period of time,” Ross Mayfield, an investment strategist at Baird, wrote in a note Friday.

Oh no! Can't have too many people working and making money at their jobs. How's that any good for continual profits? Although I have suspicions that the Trump/GOPs have some plans to deal with that "problem".

I'll put in the caveat that this jobs number is before we have the annual benchmarking that happens next month, where the previous monthly reports are closer matched to later data. And we know that there is likely to be a downward revision as a result of that, which means that there will likely be a slowing of job growth for both 2024 and 2023.

However, we still had average job growth of 160,000-170,000 per month, and given that we started 2024 at an unemployment rate below 4%, that's remarkable.

As usual, the biggest gainer was the health care sector, which added another 46,000 jobs in December and 681,000 jobs for 2024. After losing people during the depths of the COVID and being slow to recover as the pandemic re-fired in the winter of 2021, there have been nearly 2 million jobs added in Health Care since the end of 2021.

On the goods side of employment, construction saw another month of seasonally adjusted gains (+8,000) and nearly 200,000 for the year. But manufacturing employment continued to struggle, losing 13,000 jobs in December, 40,000 since September, and 88,000 since May. Then throw in the losses that were projected in the initial benchamrking process, and this time next month, we may find out that there were fewer manufacturing jobs than there were at the start of the Biden Administration.

The decline in manufacturing jobs in 2024 is something to keep our eyes on for next year, to see if that continues, or if the large number of factories that have been being built over the last 2 years starts translating into added employment.

The manufacturing losses are one of the few downsides of what was otherwise an economically successful 4 years for America under Joe Biden. Yes, things cost more than they did in December 2020, but on the average Americans made more money during Biden's term in office, and more people got jobs and kept working.

Now the Former Guy is going to walk into a full employment, growing economy as he takes office in January 2025.

No president has ever gotten a better economy handed to him that Donald Trump.

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— Dean Baker (@deanbaker13.bsky.social) January 11, 2025 at 10:50 AM

So let's see the results as Trump/GOP try to screw up what's been working for the 2020s in this country. We need to remember what things are like now, and compare it to what things will look like next year, and the year after that, and the year after that.

It's well past time to adjust the SALT Cap in the Tax Scam

As you may be aware, I despise the massive giveaways to the rich that were part of the costly GOP Tax Scam of 2017. And while I'd be supportive of the whole Scam going away when those tax cuts expire next year, one place in particular where I would like to see changes made is with the limitations put in on deductions for State and Local Taxes (SALT).

The SALT Cap was put in place with the rest of the Tax Scam in 2017, and like much of the rest of the tax package, there wasn't enough votes to change it even when Democrats had control of the House from 2019-2023 and the Senate from 2021-2023. Now the question becomes whether Republicans can oversee changes to their own Tax Scam that would raise or even remove the SALT Cap as part of the expiration of the Tax Scam at the end of 2025.

And it looks like the tiny majority the GOP has in the House might allow several swing-seat Republicans the opportunity to work out a deal on the SALT Cap, as it appears that issue will be a centerpiece of a meeting at Mar-a-Lago among GOPs this weekend. Even if GOPs try to keep the rest of the Tax Scam in place, it may well be the case that the SALT Cap gets some kind of adjustment.

While exact details weren't available, one proposal being discussed would allow married couples to deduct $20,000 of their state and local taxes from their federal income taxes. Under current law, married couples can deduct only $10,000, which is the same for single taxpayers.

In return, the so-called SALT Republicans will be expected to fall in line behind a sweeping tax bill the GOP hopes to enact later this year, two sources familiar with the new administration’s thinking told POLITICO, who were granted anonymity to discuss the internal strategizing.

The lawmakers — who represent politically competitive, high-tax districts where constituents have been dinged by the SALT cap — haven't ruled out pushing for other changes, though....

It’s possible that the group will push for something more than doubling the deduction for married couples, which the lawmakers call a "marriage penalty." The New Yorkers [in the group] are quick to point out that Trump himself pledged at a campaign rally in Long Island to expand SALT relief — and that the blue districts they represent are some of the most competitive in the country.

Let’s go back to 2018’s House elections, which took place 1 year after the SALT Cap and the rest of the GOP Tax Scam was put in place. Note that a significant part of the Democrats’ gains came in states such as California (6 seats), New Jersey (4 seats), New York (3 seats), and Illinois (2 seats) and Minnesota (2 seats).

The biggest argument against any type of SALT Cap change is that the move would end up being regressive, as the bottom 3/5 of incomes generally would get a bigger benefit from using the standard deduction in all situations. The best breakdown I could find in recent times came from the Institute on Taxation and Economic Policy (ITEP) in 2021. And it used an example of raising the SALT Cap to $15,000 for singles and $30,000 for married couples to show how it would limit the cost of the tax breaks, and keep the richest Americans from getting a windfall.

This is where we need to remember that the SALT Cap has not been adjusted to the inflation Americans have dealt with since the Tax Scam was put into effect. If you punch up the inflation calculator, and look at how much $10,000 in December 2017 would be worth today, you get nearly $12,800. Add another 2.74% for 2025 (to match what the standard deduction will increase by due to inflation), and you get $13,150. Then throw in the marriage penalty part, which is rare for a deduction not to be doubled up for married, joint filers, and it's especially infuriating for 2-income married couples (raises hand).

This is where I'll remind you that Paul Ryan and company put that marriage penalty into the Tax Scam as a way to limit the absurd overall cost of the package, because God Forbid we make mega-millionaires and billionaires pay another 1% in tax instead.

Still soooo punchable.

So let's fix that flaw, index the SALT Cap to inflation and then double the Cap for married joint filers, which would increase the Cap from $10,000 today to $26,300 for a married couple. Given that we have an upper middle-class income (and the state taxes that go with it) and are facing a property tax bill of more than $9,200, expanding the SALT Cap could well allow us to write off our property taxes, state income taxes, mortgage interest, and charitable gifts – which we have not been able to do since the Tax Scam came into being.

And I’m betting I’m not alone in Wisconsin these days, especially in a time of rising property taxes, rising incomes, and rising home values. I understand that many people have it worse than me, but that doesn’t change the fact that it’s been the upper middle-class that has been the group hurt by the GOP Tax Scam and the SALT Cap that went with it. And a combination of approving a wider SALT Cap for married couples but keeping some limits on it will be the sweet spot that doesn’t give huge benefits to the rich, but does help those that would be more likely to take advantage of the relief, and it might well help make housing more affordable and worthwhile for people.

I know it's not thought of as particularly progressive to support a tax cut that helps upper-middle class and upper-class taxpayers. But I see the change in incentives and targeted limits of assistance to be helpful for our economy and fairer in general. Dems should ask for SALT Cap changes to be separated out from the rest of the Tax Scam, and if GOPs won't do that and chooses to fold it into the larger tax package, then they don't get any help and the deficit-busting package goes down in flames.

Sounds like a win-win to me!

Wis vouchers gain and community schools lose for 14 years. Time to reverse it

I see that Gov Evers is going to add at least some funding for K-12 public, community schools in the upcoming budget.

Evers used his partial veto authority in the 2023-25 budget to write into state law an annual increase of $325 per student over the next four centuries. The increase applies to the cap on how much schools can increase spending through a mix of state aid and property taxes. GOP lawmakers challenged Evers’ move with the state Supreme Court.

Vos, R-Rochester, suggested last month if the court upholds Evers’ veto, “schools are mostly off the table,” and GOP lawmakers will focus their attention on other areas of the 2025-27 state budget.

“Honest to God, that is a joke,” Evers told reporters on Friday as he previewed his coming budget and answered questions.

Evers added, “there’s going to be more” for schools when he introduces his budget next month.

This is where we need to take a step back and remember that there are 2 items that are key when we talk about “K-12 public school funding”.

The first is the total amount of state tax dollars that are given into K-12 education, which is mainly General Aid from the state (which is adjusted based on property values in a certain district, with districts with a lower property tax base getting more aid) and per-pupil aids, which are separate payments that are sometimes (but not often) OK’d by the State Legislature, and are based on student enrollment.

The second are revenue limits, which give a combined total of per-student General Aids and property taxes that are allowed for each district, with the revenue limits not accounting for funds paid for by categorical aids such as funds to deal with high poverty or special education (although special ed is horribly underfunded in Wisconsin with most of its costs being used by funds that are part of the revenue limit).

The revenue limit is what Evers’ creative veto was about, putting in a $325-per-student increase in K-12 public school resources for every year until the law is changed. That was a rare increase in the per-student revenue limit over the 14 years that the GOP had a gerrymandered majority in the Legislature, and even that $325 per student is not likely to keep up with the rate of inflation in the coming years.

To show how far in the hole K-12 community schools are, let's take the state’s average per-student revenue limit of $10,316 for school year 2010-11, and look at how the base revenue limit would have changed under state law for a K-12 district that was at that average level. Then let's look at what's happened to inflation over the same time period, and I’ll assume a 2.5% annual inflation rate for both 2024 and 2025.

You wonder why so many K-12 districts have ended up having to raise property taxes via referendum under the GOP Legislature? And do you see why we are in need of a sizable increase in state spending to not only increase those sub-standard revenue limits, but also to give some relief to homeowners by not having so much of K-12's costs be put onto the property tax? Also, do you see how the per-student spending limit made a jump in 2024 and then plateaued? That’s not because of Gov Evers’ veto that er-student increases, but is instead because of a GOP-authored provision to increase the revenue limits for the districts with the lowest limits in the state. Yet another reason that it’s been near-impossible to avoid going to referendum to keep the lights on.

Also, do you see how the per-student spending limit made a jump in 2024 and then plateaued? That’s not because of Gov Evers’ veto that the $325-per-student increases, but is instead because of a GOP-authored provision to increase the revenue limits for the districts with the lowest limits in the state. If going under the GOP's revenue limits make an average spending district in 2011 into an unacceptably low-limit district by 2023, you have yet another reason that it’s been near-impossible to avoid going to referendum to keep the lights on.

Now compare the near-zero increase in revenue limits with what's happened to the per-pupil payment in state tax dollars that have gone to voucher schools over the same time period.

The increases for voucher payments were already near or above inflation before 2023, but then the GOP Legislature used budget negotiations to work out an agreement with Gov Evers that traded a relatively small increase in funding for public schools for a huge jump in voucher payments to private schools.

It's pretty clear that gerrymandered GOP control of the State Legislature has corresponded with K-12 community schools having funds and resources taken from them and moved into school vouchers at a sickening level. And I'm not even bringing up how vouchers outside of Milwaukee are funded by literally taking money away from the public school district that the child lives in, even if the kid never attended a day of public school in that district. And that the public school districts are often forced to raise property taxes to make up for those funds being sent out to voucher schools.

Seems like Governor Evers and Legislative Dems could put together a budget that does all of the following:

1. Significantly raises state aids and revenue limits for K-12 community schools to make up some of the significant gap with inflation since 2011. And do it in a way that also cuts property taxes for K-12 schools.

2. Stops increasing payments to voucher schools. I can wish for a decrease back toward parity with state aids to public schools, but at the very least, tell the voucher lobby "You got a big boost in 2023, so you get nothing for the next 2 years." And dare Robbin' Vos and company to defend putting any additional money going in.

3. Remove the funding flaw that takes money from public school districts and sends it into voucher schools. You want 2 tax-funded school systems? Then pay the full costs of both instead of penalizing one for the other.

When you look at the numbers involved and the fact that we will likely have at least $4 billion available to use in this upcoming state budget, there is no reason not to be able to demand these things, and see just how far Robbin' Vos and Devin LeMahieu want to go to keep Betsy DeVos and other oligarch donors happy. Let's see if Gov Evers and a less-gerrymandered Legislature makes a public effort to make it damaging if they try to pass up the chance to cut both property taxes and income taxes because they'd rather keep up Wisconsin's expensive voucher scam instead.

US, Wis population growth got a boost in 2024

One big post-COVID change in America is becoming apparent, as the US population grew by a sizable amount last year.

Immigration in 2024 drove U.S. population growth to its fastest rate in 23 years as the nation surpassed 340 million residents, the U.S. Census Bureau said....

The 1% growth rate this year was the highest it has been since 2001, and it was a marked contrast to the record low of 0.2% set in 2021 at the height of pandemic restrictions on travel to the United States, according to the annual population estimates.

Immigration this year increased by almost 2.8 million people, partly because of a new method of counting that adds people who were admitted for humanitarian reasons. Net international migration accounted for 84% of the nation’s 3.3 million-person increase between 2023 and 2024.

Births outnumbered deaths in the United States by almost 519,000 between 2023 and 2024, which was an improvement over the historic low of 146,000 in 2021 but still well below the highs of previous decades.

As you can see here, relying on immigration for our population growth is a very different pattern compared to how the US added people in the 2000s.

You can see how US population growth declined in the 1st Trump Administration as both immigration and birth rates declined, and how immigration has made up for further declines in birth rate in the last 3 years.

It also reflects the US Census Bureau using more comprehensive information to account for migrants that were missed in previous versions of the American Community Survey (ACS).

The Benchmark Database is a valuable tool for monitoring short-term changes in inflows and allows us to adjust our ACS-based estimates when appropriate. Additionally, our analysis sought to identify which cohorts were not being adequately captured. It revealed that recent humanitarian migrants, the group with the most significant growth in our benchmark data, were also the least likely to be included in the ACS.

To produce the Vintage 2024 estimates, we adjusted our [year-ago residence]-based, foreign-born immigration estimates upward to account for 75% of the humanitarian migrants in our Benchmark Database. We arrived at this adjustment factor after synthesizing different analyses of coverage error in the ACS and in consultation with internal and external migration experts. As noted in Table 1, this adjustment increased NIM [Net International Migration] estimates for the period of July 1, 2021, to June 30, 2023, in Vintage 2024 relative to the value from Vintage 2023.

This adjustment for humanitarian migrants was applied to the national total and then distributed down to states and counties using our usual method. As a result, the state and county estimates are also impacted by the adjustment.

And it ends up making quite a difference in the estimates of that NIM figure.

Moving it down to the states, the Census Bureau says Wisconsin gained 30,570 people in 2024. Like the country as a whole, most of that was through international immigration (+22,146). But there also were gains in births vs deaths (+2,040), and our state led the Midwest in the amount of people moving in from the rest of the country vs Sconnies moving out-of-state.

Net domestic migration, Midwest 2024
Wis. +6,332
Ind. +4,268
Iowa -231
Minn -1,161
Ohio -2,462
Mich -7,656
Ill. -56,235

While it's good to be leading our Midwestern neighbors, Wisconsin adding over 30,500 people still is only a one-year increase of 0.515%, barely half the 0.98% rate of growth that the country has for 2024. And because the US has continued to grow faster than Wisconsin and other Midwest states as a whole, Wisconsin is now on track to lose a member of the House of Representatives after 2030.

Texas and Florida have obviously attracted a lot of people to their states over the last four years, and are on pace to gain multiple new seats in both the House of Representatives and the Electoral College in 8 years. However, a lot of that is through immigration (Texas 38.3%, Florida 57.75%), which makes you wonder if that trend continues if the Trump Administration starts cracking down and deporting immigrants like he and his lackeys claim they will do.

In addition, Florida had a significant slowdown in net domestic migration this year - just above +64,000 when it had gained more than 808,000 from the rest of the country over the 3 years before. And I can’t think that 2 more years of Ron DeSantis Third World BS and increasing numbers and severity of hurricanes are going to make more people want to head that way.

Lots to think about with these stronger rates of population growth in both Wisconsin and the US. It's likely been a big reason behind our surprising economic growth over the last 2 years, even with higher interest rates. But this is another trend that feels like it is going to change in the near future, and the last thing we need are more headwinds from Trump/GOPs who seem likely to already cause a few due to bad policy.

WisDems can beat WisGOPs on the tax issue in 2025, if they play it right

As 2025 approaches, it's time for another budget cycle in Wisconsin. And with an estimated $4 billion in the bank, there will be a lot of options on the table for what to do with those funds.

Assembly Speaker Robin Vos says his plan is to (what else?) use those extra funds to put in more tax cuts.

Vos said he’d also like to revisit a proposal introduced last session, which was ultimately vetoed by Evers, that would exempt up to $75,000 in retirement income from state taxes.

“All tax cuts are good,” Vos said. “I can’t think of any that I couldn’t support, but the one that I think is the most important is the retirement tax cut. The people who are most impacted by inflation, food costs, electricity, are people on fixed incomes and those are our seniors and I don’t want people feeling that they have to retire somewhere else to be able to afford their lifestyle.”

Always be scheming....

"All tax cuts are good"? REALLY ROBBIN'? Giveaways to the rich and corporate which incentivize more speculation and profit-hoarding over investing in companies and workers are a good thing? Cutting available resources for public goods and investments are a good thing? Not in any planet I live on.

Also, let me remind you that Wisconsin already exempts retirement income if it comes in forms such as taxable Social Security benefits or federal and military retirement (check here for a list of write-offs), and older Wisconsinites also get an extra personal exemption of $250 that Sconnies under 65 do not. So Vos is talking about giving a tax break older Wisconsinites with investments and added income above the benefits most senior citizens have. I'm not saying that there shouldn't be some kind of discussion of how to help seniors keep up with bills and/or property taxes, but I don't see where Vos's scheme would help those who are most in need. Just richer retirees who might think of becoming tax exiles in some place like Flori-duhhh.

Speaking of schemes, Robbin' has a plan for passing tax cuts sooner than later, to try to set a parameter for budget discussions later in the year.

While tax cut proposals have generally been drafted in the midst of the budget process in the past few legislative sessions, Vos said the approach will be “a little different” in 2025, with lawmakers expected to first pass some form of tax cut in January or February, followed by the 2025-27 biennial budget process, which concludes in the summer.

Doing so would dictate how much funding remains for other budgetary needs like roads, education and other services, Vos, R-Rochester, said.

So Vos is explicitly saying that he wants to try to cut the amount of available funds for those needs before figuring out how much to put in for those publicly-supported needs. And not tying the tax cuts to funding anything else, which makes it easier to veto if the tax cuts are ridiculous.

Not to be outdone GOP Senate Leader Devin LeMahieu also has talked about his group's tax plans.

LeMahieu, R-Oostburg, noted Assembly Speaker Robin Vos, R-Rochester, has raised the prospect of again trying to cut taxes on retirement income. But LeMahieu said he wants broader tax relief that cuts across ages. The majority leader also said he likely won’t bring up his proposal from this session to move the state to a flat tax and believes there’s no appetite in his caucus to try pumping additional state money into various local aids in an attempt to drive down property taxes.

Dem Gov. Tony Evers in the last budget signed a GOP proposal to reduce the bottom two tax brackets to 4.4% and 3.5%. But he vetoed a proposal to reduce the second-highest bracket to 4.4% and to reduce the highest bracket to 6.5% from the current 7.65%.

That second-highest bracket of 5.3% now covers income between $38,190 and $420,420 for married joint filers.

“If you’re working full-time, I don’t know where you find a job that puts you below that, that second-highest tax bracket, frankly,” LeMahieu said.

Let's take a step back on that "income" discussion, because that's a reference to taxable income, not total income. And if you look at how to fill out Wisconsin's tax form, you'll find there is a quite a difference in the two, as the state's standard deduction removes a sizable amount of income that gets taxed in our state.

So that $38,190 of taxable income for married joint filers translates into an actual income of $57,000, and the median household income in Wisconsin was $74,631 in 2023. I'm guessing quite a few Wisconsin married couples are making below $57,000 (or $58,500, if you adjust for inflation in this year), and so they wouldn't be affected by any change in the 5.3% tax bracket. Also, are LeMahieu or other Republicans asking to raise Wisconsin's rock-bottom minimum wage of $7.25 an hour or $2.33 for tipped wages to guarantee that happens? Of course not.

But there is a legitimate point in not having such a wide range of incomes be in that 5.3% tax bracket. So maybe drop that tax bracket of 5.3% to 4.4% for incomes between $70,000 for singles and $140,000 for married couples. It also doesn't spend out the $4 billion surplus within 2 years by not having this permanent tax break be as large for the upper incomes (and make no mistake, richer people get this tax cut as well, they just don't get additional dollars in tax cuts beyond their incomes of $70K/$140K under this example).

This type of limited, targeted tax relief could be something Dems could sign onto in the Legislature, if you buy what the top Dem in the Assembly says in that article discussing Vos's tax cut plans.

“We are not interested in a tax cut that primarily benefits the richest Wisconsinites or corporations, which is a lot of what we’ve seen from (Republicans) in the past several years,” Assembly Minority Leader Greta Neubauer, D-Racine, said earlier this month. “But we are open to a tax cut that puts money back in the pockets of people who are struggling to make ends meet.”

And LeMahieu's comment about not wanting to use state funding to cut property taxes gives Dems an opportunity to get ahead of the GOPs on the taxes that seem to be annoying Wisconsinites the most. As I've said before, this would be an excellent time for Gov Evers and other Dems to try to get K-12 school funding off of the property tax, and have state funding go into the classrooms to make up the difference.

It would also be a good time for Evers to ask again for an expansion of the state's Homestead Credit, which has not been adjusted for inflation by Republicans for over a decade and is projected to have less than 1/3 returned to Wisconsinites as there was a decade ago. Thatr GOP failure has made the property tax burden worse for many Wisconsinites as a result, and there was also an erosion of the amount given out in the state's Earned Income Tax Credit, until the Federal part of that credit was expanded and adjusted for inflation in 2022.

Evers wanted more state EITC funding in the last budget, and also asked for larger property tax write-offs for veterans' families and increasing the expenses that could be recouped by caregivers, among other ideas. But GOPs didn't go for that either. Seems like that should be pushed for as well, and to either force GOPs to accept those moves, or be seen as ignoring these increasing strains that everyday Wisconsinites are dealing with.

So a real question that should be asked as we approach this state budget isn't "Do we cut taxes", but instead "How do we cut taxes, and who do we choose to help." And if the Dems play things the way they should, they'll be the ones that rightfully ID themselves as the party that gives tax relief to the Wisconsinites that need it the most.