On taxes and dark money, J-S decides "balance" > journalism

Near the end of this month, we should find out the state of Wisconswin's finalized revenues for Fiscal Year 2016. If a revenue shortfall is announced (and from looking at past reports and the latest cash forecast, it seems very possible), you can likely blame loopholes that allow some of Wisconsin’s richest individuals to avoid paying state income taxes. But just like with the antics of certain dark-money groups in tomorrow's primary elections in Milwaukee, it’s funny how the state’s largest newspaper sat on these facts until they could find enough "political balance" to print their story, likely waiting until it was too late for it to matter.

On the tax loopholes, I’m referring to a Milwaukee Journal-Sentinel article which came out on August 1, with the headline of [Milwaukee County Executive] “Chris Abele hasn’t owed state income taxes for 14 years.” In the article, mega-millionaire Abele is open about the activities he partakes in to avoid paying those taxes, and much of it has to do with his numerous charitable donations.

Abele said his personal income tax liability has been offset by hundreds of thousands of dollars in charitable donations to causes including the Boys & Girls Clubs, the Urban League of Milwaukee and the MATC Promise program. He said he routinely gives more than he can write off and had nearly $1 million of unused charitable deductions at the beginning of 2015….

He also has investments in several companies — another factor that [CPA Christa] Baldridge said contributes to a zero-dollar tax liability.

Because young companies are especially likely to post losses in the early years, an investor such as Abele could use those losses to cancel out income from other investments. The same is true of real estate investments. Losses can be carried forward for up to 20 years.

All legitimate and on the books, as far as I can tell, and in the article, Abele shrugs and says “if people are concerned about it, they should change the law.”

Of course, what's not mentioned is a big reason the laws are what they are is because mega-millionaires have the disposable funds to be able to be part of money-losing activities such as start-up investing, and can give away large amounts of money to charity. It also doesn’t hurt to have the capability give large donations to politicians and political organizations, who can get tax policies passed that are more likely to help the donor class, allowing for exclusive tax write-offs you and I don’t have a chance of taking advantage of.

And speaking of political influence, take a look who is also on the Journal-Sentinel’s list of wealthy Wisconsinites who don’t pay taxes.

Abele, a Democrat and multimillionaire, is among a group of well-known and wealthy people with zero-dollar tax returns, including members of the SC Johnson family and Beloit billionaire Diane Hendricks, the owner of ABC Supply and a key fundraiser for Republican presidential candidate Donald Trump.

Yep, there’s Diane “Red State/Divide and Conquer” Hendricks, who has millions to give to Scott Walker and other Republicans throughout the country, but doesn’t have to give a dime to the State of Wisconsin. Not a bad deal for her, eh?

But of course, the Journal-Sentinel article didn’t go into Hendricks or the SC Johnson oligarchs, spending almost all of its time talking about Abele. Also interesting in this article is how the J-S continues its monthlong tradition of avoiding discussion of a likely culprit behind some of these zero-dollar returns- the “Manufacturers and Agriculture” tax credit.

Ah yes, the old M&A Credit. You know, the one that was signed off on by WisGOP legislators and Governor Walker 5 years ago, and one the Wisconsin Budget Project titled “The Big Giveaway” in their report from late June? The M&A write-off is now slated to give out $21 million in tax breaks to 11 Wisconsin mega-millionaires next year, and is among many WisGOP tax measures that have failed to increase jobs and have helped lead to revenue shortfalls that resulted in serious cuts to education, roads and local governments the most recent state budget.

The J-S continues to stand alone in the state’s media in refusing to report on this sellout, which has over 20% of its recipients be Wisconsinites who make $500,000 or more, and 90% of the benefits go to this elite group. And even in an article on millionaires who avoid taxes, the M&A tax credit isn't mentioned in this article either, which sure makes you wonder if there’s an order coming from above in the offices at 4th and State, or even further up in the Milwaukee oligarchy. I have a hard time buying that the reporters and editors at the largest newspaper in the state is ignorant of something that has gotten so much attention from other outlets.

Likewise, I doubt that the Journal-Sentinel was unaware about the right-wing dark money that had been polluting the Milwaukee area ahead of tomorrow’s primary elections (Dom Noth has another excellent article on this today). That is, the J-S had said nothing until Dan Bice ran an article today, well after the attacks had been aired. Bice’s article also happens to mention the relatively small amount of left-wing Greater Wisconsin Committee money as a counterpart to all of the Koch/Bradley money used to attack Milwaukee County DA John Chisholm in a last-ditch attempt to stop the John Doe appeal, along with backing voucher supporters for the Legislature.

This type of reporting gives a false sense of “both sides do it”, much like how the “zero-tax” article focuses in on Abele instead of Hendricks or other right-wing business oligarchs that benefit from these schemes, and allows the typical voter to turn off instead of be outraged by the clear abuse and advantages afforded to the rich and corporate. It gives a good reminder to us that when we try to look for biased reporting, we can’t just look at what is written, but what is not covered, and what events cause an issue to be covered.

And when it comes to reporting on a Wisconsin’s tax and campaign finance system that overwhelmingly favors the connected and the wealthy, the Journal-Sentinel continues to come up short, and we need to ask why.