Tuesday, January 30, 2018

Walker already flailing on gimmicky tax cut

Within a week of making “bold proposals” in his State of the State address, Governor Unintimidated is already backtracking on one of his biggest plans.

When Scott Walker announced his new $100-a-child tax credit, the plan was to have it go to any parent, regardless of income level or if they owed taxes or not. But now that the public and the GOP-controlled Legislature clearly aren’t head-over-heels for it, Walker says he’s willing to pare the credit back.
Asked why he is proposing work requirements for beneficiaries of public assistance, but proposing cash payments to families with no strings attached in the form of a refundable income tax credit, Walker said he would be "open if the Legislature so deemed to tie it into taxable liability."

Under Wisconsin tax law, families with no tax liability would be eligible for the child tax credit if it were refundable, meaning the state would pay it out to tax filers as part of their annual tax refund. Only two other state states, New York and Colorado, offer a refundable child tax credit. The federal child tax credit is partially refundable.
Of course, the families with no tax liability tend to be low-income, which means they would be the ones that miss out if Walker and the WisGOP Legislature chose to limit the cost by making it refundable. Cute trick, eh?

The Wisconsin State Journal's Matt DeFour also notes that Walker has cut back on the ability for low-income workers to take advantage of another tax credit over the last 7 years, and that this new Child Tax Credit would cost more than that writeoff if all Wisconsin parents were included.
The state already offers an earned income tax credit (EITC), which Walker scaled back in a previous budget. Only families who work and make up to a certain amount of income may receive that credit, which means it primarily benefits low-income workers.

About 253,000 tax filers claimed the EITC in 2015, at a cost of about $100 million to the state, according to the Department of Revenue. The EITC phases out for a two-parent household with two children at about $50,000.

The proposed new child tax credit could cost the state $122 million a year in tax revenue if all 670,000 families with children under 18 qualified. Walker's proposal doesn't include an income-based threshold, as the five state and federal child tax credits do.
Let me add that the cost for the next fiscal year of Walker’s proposal would actually be $244 million, because of the stunt Walker wants to pull where checks of $100 would go out to parents around Labor Day 2018, and then parents can write it off AGAIN when they file their 2018 taxes in early 2019.

Meanwhile, the state's roads continue to crumble and colleges like UW Oshkosh are considering more layoffs and budget cuts due to a drop in enrollment and a lack of funding from the state. Maybe there are bigger priorities for the state that need to be dealt with instead of giving away another one-sided tax cut that will starve services more. Just a thought.


  1. Oh look, the story has now been updated. And now Scotty Fitz is saying that this thing should be ended after the 2018 tax year because the ongoing cost is too much to handle.

    Guess the guys in the Governor's office weren't thinking past 2018 when they put this together, did they? And isn't THAT telling?

  2. Let's hope we can get past this horse-trading look that Walker is now resorting to.

    Offering $100 per child, wow, that will surely turn family's lives around! No austerity here, or payoffs for the monied-interests...

    After attending UW-Oshkosh, tuition was no longer provided via Pell Grants to me--hail to oil and bombs. My experience with politics ran against the current mainstream trend. I didn't glorify Henry Kissinger or Jane Austen, so I was out of bounds.

    La Follette brought scholars into the equation of politics, as both Parties were corrupt then, and needed real information to change the problem. That made a huge difference, I see that conservatives hate the progressives 180 degrees, while progressive change is truly needed for the USA to once again be a functioning democracy.

    Change will come, but we have to make it democratic, not some authoritarian
    puppet state.