Why Evers should stay course and end tax cut for manufacturers

The Wisconsin Budget Project has been a great resource for me over the recent years, and one of their analysts has an Op-Ed in Urban Milwaukee discussing tax policy in Wisconsin as the GOP Legislature's unfunded tax cut lands on Tony Evers' desk.

Tamarine Cornelius says Evers should stick with his plans, and help to pay for his proposed middle class tax cut by repealing the "Big Giveaway" tax credit for large manufacturers in Wisconsin.

All Wisconsin businesses depend on public investments in roads, workforces and communities to thrive. But this loophole gives manufacturers a special exemption from paying their fair share. That means that companies like Foxconn and Kimberly-Clark pay little or nothing in income taxes even before the state piles on the subsidies. In fact, an investigation by One Wisconsin Now showed that, in the four years between 2013 and 2016, Kimberly-Clark paid a grand total for $1 in state income taxes.

Businesses don’t need to create new jobs to receive this tax break. Even manufacturers that lay off workers, send jobs overseas, and close factories can receive the credit. There is no evidence that this tax break has any effect on employment.

Only about three out of every 1,000 tax filers get this tax break, but those that do get an average tax cut of about $23,000. Some multi-millionaires get seven-figure tax breaks, with no requirement that they expand their business or hire additional workers.

Evers wants to limit this costly, ineffective loophole and redirect the resources to put more money into the pockets of the middle class and working parents with low incomes. His proposal would allow manufacturers to use only the first $300,000 of income to claim the credit. More than $9 out of every $10 in revenue gained through capping the manufacturing credit would come from millionaires.

The manufacturing credit contributes to economic inequity by increasing the concentration of income and wealth in a few hands—hands that are most likely to be white, due to a long history of racial discrimination. Thanks to powerful interests that have rigged the tax code to their advantage, Wisconsin residents with the highest incomes pay a much smaller share of their income in state and local taxes on average than other taxpayers.

Cornelius is referencing the “Who Pays?” report from the Institute for Taxation and Economic Policy, which showed last year that it's the middle and upper-middle classes that pay the highest percentages of their income in taxes in Wisconsin.

Let me also reiterate a point I’ve made a few times on here. Manufacturing corporations in Wisconsin have gotten other tax and policy breaks on top of the M&A credit in recent years. They include:

1. The GOP Tax Scam at the federal level, which featured a significant cut in corporate taxes that have artificially inflated earnings.

2. Wisconsin’s repeal of most of the personal property tax, which just took effect this year and includes most types of business equipment. Not only are manufacturers not paying as much, but it shifts the burdens onto homeowners to make up the difference.

3. Manufacturers have also been allowed to cut corners due to Walker-era deregulation. In addition, the GOP’s union-busting policies have helped lead to Wisconsin having the lowest manufacturing wages in the Midwest.

What did we get from that? Bottom-half job growth for 7 straight years, Scotthole-marked streets and lousy wages. And don’t buy the BS from Republicans about “great job growth in Wisconsin manufacturing in 2018.” Like most recent years, this is highly likely to be revised down by thousands of jobs when the jobs figured are benchmarked to the “gold standard” QCEW next month.

In light of this awful performance by state businesses, I’m supposed to cry tears for the possibility of the largest manufacturers having to pay back a fraction of what they’ve taken in recent years? Especially since those funds would be used to help middle-class Wisconsin consumers with a tax cut while increasing the ability to maintain public investments that benefit manufacturers more than most Wisconsinites? I dare Robbin’ Vos, John Nygren and other GOPpuppets try to justify Diane Hendricks continuing to get a tax cut of millions while infrastructure, schools, and quality of life deteroriates across the state.

WMC and the other RW puppetmasters can shut up, sit down, and be glad Evers isn’t asking for more, because I bet the average Wisconsin voter is sick of the 8 years that corporations have gotten a free ride in this state, especially since there hasn't been much of a benefit for people that aren't CEOs and the politicians they bought.

The emergency is to...take money from disaster and military aids?

I could discuss the merits of President Trump's "emergency" declaration to try to build more of a wall at the border, but besides the concerning tendencies toward fascism, what's the point? And after all, if Trump himself spent weeks threatening the move, and is admitting he could have waited on it, it's not an emergency.

I'd rather discuss what calling the emergency allows Trump to do. It lets the Trump Administration steal funding that had been set aside for other needs, and instead potentially use it for this stupid wall.

The administration has been eyeing several pots of money — including disaster funds, counternarcotic accounts and military construction dollars — to fund Trump’s wall, according to congressional aides and White House officials.

One possibility is shifting a portion of the $13 billion in disaster aid Congress approved last year for Puerto Rico and a dozen states, including California and Texas, hit hard by hurricanes, flooding and other disasters. The money funds Army Corps projects, and the Puerto Rico aid alone totals more than $2 billion.

These are real emergencies to deal with.

Classy! Who needs rebuilding after natural disasters when you can create a disaster of your own through detention camps and scaring stupid shut-ins over something that doesn't isn't nearly the threat that severe weather is.

Where else could Trump try to raid money from? How about from the bases where our men and women in uniform stay ready against real threats.

A more likely option is the military construction account that’s used to upgrade bases and facilities.

Congressional aides said there is $21 billion available. That includes about $10 billion in funds from the current 2019 fiscal year that ends Sept. 30, and $11 billion remaining from the previous four years, said the aides. They spoke on condition of anonymity because they weren’t authorized to speak publicly about the funding details.

But tapping the military construction money also may hit resistance. The money often goes for improvements to housing, roads, hospitals and other facilities, and can be used to eliminate mold or other hazardous problems at military installations in congressional districts across the nation and around the globe.

Now, I don't mind the idea of repurposing money that isn't going to be used instead of spending new money. But there are needs that are going to be unmet as a result of this Trumpian vanity project, and there is no consultation with Congress regarding the reuse of this money.

And oh yeah, ignoring Congress when it comes to the president pulling money as he/she wishes has been found to be illegal for more than 40 years. Charles Tiefer foresaw this possibility of Trump impounding and/or changing the destination of funding in a Forbes column from September 2017. Tiefer notes that when Richard Nixon tried the same thing in the 1970s, he was shot down by the Supreme Court.

Trump could announce that he will leave congressionally appropriated funds unspent, a move that we have ti go back more than forty years to the Nixon administration to make sense of. Trump will be tempted to go this “express” route for the propaganda value of contrasting himself with the big bad allegedly “spendthrift” Congress. Moreover, from his perspective, by doing this loudly and expressly, he will direct attention to his asserted overall goal of making savings, rather than just toward his personal ideological goals of starving particular programs for funds.

However, President Nixon totally lost the battle of impoundments, creating a binding precedent. After Nixon announced the impoundments, Congress fought back by insisting on the appropriations. Nixon lost a pivotal Supreme Court case, Train v. United States. And, Congress enacted the Congressional Budget and Impoundment Control Act [in 1974]. This Act required him to submit any proposals for impoundments, defined as “rescissions” and “deferrals,” for Congressional votes. This is a statutory framework that has worked well for forty years. If Trump uses it, he will win few of those necessary votes. If Trump does not use it, he is operating outside the very well-established law.

This Dick tried the trick, and it didn't work.

At the time, Tiefer pointed out that the Trump Administration could limit spending and move money around in other ways.

The second way is for Trump not to announce his cuts expressly, but to sneak them in by diverse ways. For keeping money unspent, the key agency is the Office of Management and Budget (OMB), and the management officials under OMB in each agency. The OMB Director, Mick Mulvaney, is a very savvy veteran of budget issues, and he will have management officials in important agencies who implement his directions. For this approach, the key is sophisticated work in the shadows. It includes taking heed of nuances between whether the appropriation provides that the funds “shall” be spent or just “may” be spent and asserting the power not to spend funds saying “may” because they are discretionary.

Another method is to “transfer” funds from one appropriation item to another one, which can be a big change that puts a whole program out of business. It may include “reprogramming” funds within an appropriation item, more fine-tuned than transfer, moving funding from one activity (allocation) to another. While this is a smaller change it can still starve some program that is out of favor.

So disaster funding and military infrastructure is "out of favor"? For something that is disfavored by the 2/3 of us that don't exist in the GOP's Bubble of BS? You go and try that one Donald.

In the meantime, there are other things that Dems in Congress can do to whack Trump with if he tries to go further with this fake emergency. In fact, it's probably being added to the already-long list of "high crimes, misdemeanors and court defeats" that this senile fool has on him.

Walker-era neglect increasingly costing us more in 2019

The costs of the tax and budget cuts in the Age of Fitzwalkerstan are becoming apparent by the day. One example comes from this recent article from Wisconsin Public Radio, which includes an analysis from David Darling, who is UW-Madison’s administrator for Facilities Planning and Management.

Darling says that the Madison campus in particular has a lot of older buildings that are breaking down, and more money is needed to catch up.

Darling stressed the need for increased funding in his presentation to the Board of Regents and said UW-Madison needs an additional $21 million annually just to stop the growing backlog of maintenance projects. In total, however, the campus has approximately $1.5 billion of deferred maintenance.

"But that would just halt the growth of our deferred maintenance backlog," Darling told Wisconsin Public Radio.

In other words, it would take $21 million each year for UW-Madison to keep up with repairs.

"We have approximately $1.5 billion worth of deferred maintenance in aggregate," he said.

Dated, and in need of repair

And in light of this week's snowstorm, us in Madison have seen another major infrastructure breakdown due to a failure to keep things fixed up.

The eastbound Beltline ramp to southbound I-39/90 remains closed Thursday afternoon because of deteriorating road conditions discovered last night on the Interstate.

Significant delays are expected on southbound I-39/90 in the Madison area during this afternoon’s commute....

Emergency repair work on the southbound lane of I-39-90 just south of the Beltline exit is planned to begin this evening, according to the Wisconsin DOT.

Repairs are expected to be completed before the weekend, weather permitting.

This is the same Beltline vs I-39/90 interchange that had work delayed on it due to Walker/WisGOP budget cuts, and the was the subject of a ridiculous pre-election proposal by a desperate Walker Administration to try to fix the heavily-traveled area on the cheap.

The department recently told federal highway officials it recommends rebuilding the I-39/90 interchange with the Beltline such that the northbound side narrows, through its core section, to two lanes.

The interchange overhaul, set to be completed in 2022, would be the final phase of a $1.2 billion plan to widen the interstate to three lanes each way from Madison to the Illinois state line.

Overhauling the interchange without expanding to three lanes in both directions — which would be the case north and south of the interchange — would crimp the flow of northbound traffic, causing “significant safety concerns,” said Craig Thompson, director of the Transportation Development Association of Wisconsin, a group of business, labor and local governments that advocate for more spending on roads, bridges and transit.

That's the same Craig Thompson who is new Governor Tony Evers' appointee to become the new DOT secretary that has to deal with getting the state's highways back to speed with less of these Scottholes.

And yet WisGOPs are still selling BS like this.

"And like any good family, we have paid down our debt – fully $1 billion less! Saving us $4 million per week in interest. And we’ve put money into our rainy day savings account. And yet, we are still running a surplus." --@RepMacco

— Rep. John Macco (@RepMacco) February 12, 2019

Not in the DOT and the UW, Johnny. And it's pretty easy to have extra money when YOU DON'T PAY TO GET THINGS FIXED.

Now these dopes want to throw away $338 million on an unfunded tax cut while things are literally falling down? Given all of the problems and additional needs that keep becoming apparent, it'll be a stretch to find enough money to stop the bleeding as it is.

Retail sales tank in December. Are things getting that bad this fast?

Because the federal government has been opened for the last 3 weeks, it means the sizable backlog of economic data from the end of 2018 and early 2019 is finally coming out. And the report on retail sales for the important month of December was a shocker.

Advance estimates of U.S. retail and food services sales for December 2018, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $505.8 billion, a decrease of 1.2 percent (±0.5 percent) from the previous month, but 2.3 percent (±0.5 percent) above December 2017. Total sales for the 12 months of 2018 were up 5.0 percent (±1.4 percent) from 2017. Total sales for the October 2018 through December 2018 period were up 3.7 percent (±0.5 percent) from the same period a year ago. The October 2018 to November 2018 percent change was revised from up 0.2 percent (±0.5 percent)* to up 0.1 percent (±0.4 percent)*.

Retail trade sales were down 1.3 percent (±0.5 percent) from November 2018, but 2.1 percent (±0.5 percent) above last year. Clothing and clothing accessories stores were up 4.7 percent (±1.4 percent) from December 2017, while food services and drinking places were up 4.0 percent (±2.5 percent) from last year.

That’s the worst 1-month drop in retail sales since September 2009, and along with a reported decline in inventories, caused the Federal Reserve of Atlanta to tank its projections for 4th Quarter GDP growth, all the way down to 1.5%.

The drop in retail sales was wide-ranging, and contradicted information from credit card companies and retail studies who said the Christmas shopping season was a great one. The huge decline was such a surprise some economists literally refused to believe it.

The weakness was broad-based. Sporting goods stores sales fell 4.9%, miscellaneous store retailers fell 4.1%, non-store retailers — which includes online retailers — dropped 3.9%, department stores fell 3.3%, and health & personal care stores fell 2.0%.

Economists said that the decline in the “official” Census Bureau figures is easily explained in the context of broader financial market volatility and uncertainty over a partial government shutdown, which saw about 800,000 federal employees either furloughed or working without pay. Both of these factors had also contributed to weaker readings for consumer sentiment, with a reading from January capturing the residual impact of December’s market performance and government shutdown registering at the lowest level since October 2016…

The largest drop in headline retail sales was especially surprising given that previously released data from other institutions had suggested that retail sales had risen for the month. According to a Mastercard SpendingPulse study released at the end of December, the holiday shopping season had been the best in six years. A Johnson Redbook report, likewise, showed that December sales rose over last year, though the firm draws results from a smaller sample.

The release of the Census Bureau’s retail sales figures – along with a host of other economic data – was delayed due to the government shutdown.

The Census Bureau’s retail sales numbers “are astonishing, and impossible to square with the Redbook chainstore sales survey, which reported surging sales in December and a record high in the week of Christmas, on the back of the plunge in gasoline prices,” Ian Shepherdson of Pantheon Macroeconomics wrote in an email Thursday.

And it may well be that the bad December numbers reflect a seasonal adjustment that counts on Christmas shopping being heavily concentrated in December - the amount of money spent in retail went up 8.7% in December vs November, but that’s less than “normal”, so it registered as a big loss. However, it doesn’t explain the lousy year-over-year figures that include what was happening in December 2017 (the raw sales for Dec 2018 were only up 1.4%, below the rate of inflation).

But wait, Trump economic advisor Larry Kudlow says that there’s a legitimate reason for the decline.

National Economic Council Director Larry Kudlow played down the weak December retail sales report, which showed the biggest monthly drop in nine years. Speaking from the White House, Kudlow noted the impact of 10 days of a government shutdown as well as shoppers procrastinating on holiday purchases. "Shoppers were very late, according to the National Retail Federation," he added. "I wouldn't be surprised if January was revised up because of that."

Koch/coke makes you say stupid things.

So Kudlow is saying that Americans were waiting until January to do their Christmas shopping. WHAT?????

It's an additionally stupid take because the shutdown didn’t happen until the Saturday before Christmas, and no one missed paychecks until the start of 2019. If there’s a shutdown-induced loss of retail spending, you’d think it would show up in January not December. Even by that dimwit’s low standards, this a lame excuse.

There was also a national report this week which indicated that consumer debt kept going up at the end of 2018, which makes you wonder how soon a breaking point is reached.

The U.S. household debt and credit report, published Tuesday by the Federal Reserve Bank of New York, showed that the overall debt shouldered by Americans edged up to a record $13.5 trillion in the fourth quarter of 2018. It has risen consistently since 2013, when debt bottomed out after the last recession.

While mortgage debt, by far the largest slice, slipped for the first time in two years, other forms of borrowing rose including that of credit cards, which at $870 billion matched its pre-crisis peak in 2008…

Another signal of weaker demand, the closing of credit cards and other accounts, jumped to its highest level since 2010, while flows into serious delinquency for credit cards rose 5 percent, up from 4.8 percent in the third quarter.

Serious-delinquency flows, a warning bell for economists because they can prelude defaults, spiked in the third quarter for student debt and remained there in the fourth quarter, with 9.1 percent of the $1.5-trillion total debt seriously delinquent.

These flows have also been rising since 2012 for auto loans, which rose slightly to total $1.3 trillion by the end of 2018, a year that had the highest number of auto loan originations since at least 1999.

And the Fed added that “subprime” borrowers are a big reason for the worsening state of car loans, which sure gives off echoes of the mid-2000s in bad ways.

That being said, the Bureau of Labor Statistics said this week that real wage growth increased again in January as gas prices and other inflation bottomed out, so there shouldn’t be headwinds from that standpoint. However, I’d think a large number of people finding out that they’re going to be sending checks to the IRS instead of getting a refund will have some kind of effect on the consumer economy in the next few months.

These realities are why I’m not trusting the recently melting-up stock market. The horrid retail sales figures and the worrysome debt numbers also shows that the economy on Main Streeters might be very different than what’s happening for Wall Streeters, and I don’t like how those situations often resolve themselves.

Can Foxconn follow Amazon?

PLEASE! PLEASE! PLEASE!

Somewhere in Wisconsin, a group of legislators are trying to figure out how to photoshop "Amazon" over "Foxconn" https://t.co/f6rYE7sSCN

— Don Moynihan (@donmoyn) February 14, 2019

All it takes is for communities and elected officials to SAY NO. The result is they don't hamstring their communities for years vs over a net gain of a relatively small amount of jobs gained (at best).

There will never be a point where oligarchs say "NO" to subsidies, and they will always try for more. It only stops when we choose to stop giving away the farm to them.

Vouchers now hurting small-town Wisconsin districts

I wanted to go into an article in the Baraboo-Portage newspapers, which went into schools being hurt by vouchers are in smaller communities in South Central and East Central Wisconsin.

Some might say if students leave the public schools, then the schools can reduce staff and other costs to make up for the loss of funds. However, that’s not necessarily realistic, if the numbers are relatively small in each class.

But losing some students to private schools doesn’t necessarily mean a district has reduced costs, said Portage Community School District Business Director Peter Hibner. Since 2015, Portage has had more than 20 voucher students per year. Participation jumped to 36 this year, taking with them almost $300,000.

“Let’s say you have 30 kids district-wide under that program,” Hibner said. “That might only be a couple at each grade level, so it’s not like we can have less staff for anything else because we have a couple less students.”

What’s especially damaging is that Republicans have set up a funding system for vouchers that takes funds away from the district’s of a child’s residence, as a method of saving tax dollars. Which leads to the public school system constantly having to work uphill, and often having to increasingly rely on property tax dollars because of state revenue limits.

Lodi School District Administrator Charles Pursell said if legislators wanted a choice program, they should have funded it as a separate entity, rather than tying it to public schools.

“I believe in kids having a quality education,” Pursell said. “I’m not opposed to the idea of choice, I just don’t think that public schools should be penalized in order to support a second school system.”

The Lodi district already uses funds from an operational referendum to support existing programs due to a lack of public school funding, Pursell said. Unless state funding changes, he expects the district will need to ask local taxpayers for more support once the referendum ends.

As the article points out, Republicans are steadily increasing the amount of students and money that can be taken away from, 3% for this year, and going up to 10% in 2025. After that, the caps go away entirely.

That funneling of money out of public schools for vouchers seems like a flaw that Governor Evers could try to change and draw attention to in his budget. In addition, with the increasing needs and referenda that continue to crop up due to past Walker/WisGOP neglect, Evers can use the budget to lower the voucher cap to start letting this scam die on the vine.

In the process, this would dare Robbin' (donations from Betsy De)Vos and Fitz and other GOPs to justify this theft that's hurting one of the few things left that ties communities together - quality local public schools. This is yet another issue where Wisconsinites agree with Dems and hate the GOP's policy, but they have yet to adequately punish Republicans for what they have done.

Now that it's tax filing season, the GOP's Scam is biting back

The middle of February doesn’t just mean a depressing weather scene, it also is when tax-filing season ramps up after Americans have received their W-2s for the previous year. And tax filing season is getting extra attention this year because it’ll be the first one that reflects the changes from the GOP’s tax bill, which was passed at the end of 2017 and took effect at the start of 2018.

Eric Levitz in New York magazine points out that the Tax Scam is “about to become a political disaster.” It stems from a calculus the Trump Administration and other Republicans made last year, where they thought the higher take-home pay would make voters happy enough so they could sneak by in the November 2018 elections.

But GOP operatives insisted that the “blue wave” on the horizon would crest long before November — because the Trump Tax Cuts were about to kick in. Once voters saw fatter paychecks, Republicans would see better poll numbers. And just to be sure that voters noticed all the good Paul Ryan had done for them, the Trump administration reportedly pressured the IRS to err on the side of withholding too little from Americans’ paychecks “so people will see big increases in their take-home pay ahead of this year’s midterm elections.”

This did not work out as planned. Even with (allegedly) light withholding, the the tax bill’s breaks for middle-class people weren’t large enough to attract much notice. Between changes in salaries, health-care premiums, and 401(k) contributions, most Americans didn’t detect much tax relief in their paychecks. The Trump Tax Cuts actually became less popular after they took effect. And, of course, Paul Ryan’s majority drowned in a blue wave.

They get to keep their tax cut. You may not be so lucky.

The cynical part about the GOP’s strategy was that the literal payback of the lower withholdings would come after the elections, during this year’s tax filing season. And that is hitting tens of millions of Americans in the face.

Now, the bill for the GOP’s (reported) withholding shenanigans is coming due: The average American’s tax refund was 8.4 percent lower in the first week of 2019 than it was one year ago (under the pre-Trump tax code). And while Americans have trouble noticing tax changes when they’re dispersed across 12 to 24 separate paychecks, they do typically pay very close attention to the size of their refunds. About three-quarters of the country typically qualifies for a tax refund most years — and for many of those households, that check from the IRS is the largest lump sum they’ll receive all year.

“Ask people how much they paid in taxes, nobody knows. Ask them how much they got in their refund, people know,” Howard Gleckman, a senior fellow at the Tax Policy Center, told the Intercept’s David Dayen this week. “Everyone focuses on size of the refund, and it does affect perception.”

A big reason why many Americans are getting smaller refunds and/or having to pay back the IRS for the first time in several years is partly due to the smaller withholdings from last year. But it’s also partly due to changes in the Tax Scam that were intended to make it easier for people to file. The standard deduction was expanded to $12,000 for single filers and $24,000 for married couples filing jointly, which theoretically leads to a lower tax bill for many.

The problem is that in order to keep the Tax Scam from blowing an even bigger hole in the US budget deficit, certain deductions were limited and/or eliminated. And two items are hitting working and middle-class homeowners harder than others, especially if they don’t have children.

2. Personal exemptions. The increased standardized deduction will be welcome news for many households, but there's a catch: Personal exemptions have been eliminated. While not technically a deduction, the exemption allowed taxpayers to subtract $4,050 from their taxable income for each dependent they claimed, so eliminating it is a significant loss for families. The increased standard deduction helps soften the blow of losing personal exemptions, but it might not make up for it entirely, says Mark Jaeger, director of tax development for TaxAct, a provider of tax preparation software and services.

3. Unlimited state and local tax deductions. On this year's tax forms, deductions for state and local taxes – known as SALT deductions – are capped at $10,000. "That to me is the one (new tax code rule) that is going to impact middle class taxpayers the most," [Tampa accounting firm director Shaun] McClung says. It will particularly affect those living in states like California and New York, which both have above-average state income tax and property tax rates.

That limitation of SALT is going to nail a lot of Wisconsinites as well, given our system of making local governments rely on property taxes and having a low sales tax make up for our income tax.

What a nice going-away present from Wisconsin's own Paul Ryan!

Soooo punchable.

Combine that $10,000 limitation on SALT and the fact that Wisconsin’s relatively moderate cost of living limits the amount of mortgage interest needed, and many of us won’t reach $24,000 in deductions. So we’ll take the standard deduction, which is fine from a net tax standpoint, but it also means that the amount deducted from our paychecks are likely to be in line (or less!) than what should go to the IRS. So no tax refund either.

On a related note, I went to the IRS site with the filing stats, and the more interesting figures to me were not that people were getting smaller refunds, but these ones.

Total Returns processed, YTD
2018 17.93 million
2019 13.31 million (-25.8%)

Total Returns with refund, YTD
2018 6.17 million
2019 4.67 million (-24.3%)

There are 2 reasons this may be happening. One is relatively benign, and simply reflects that people are starting on their returns later, and perhaps there was a bit of a hangup due to the government shutdown in January. That will correct over time.

The second reason would be very bad, as it would reflect fewer people getting refunds in general and having to write checks to the IRS. Those people would have no reason to file a federal tax return in early February, as why would you write a check before you had to in April? In fact, I can see a scenario where many Americans file their state return, get a refund from that, then file their federal taxes after the get their state money in the bank (raises hand).

If there are fewer refunds in general, then what does that do to consumer spending in the coming months, where the typical boost in the bank account isn’t coming? And does it artificially inflate tax revenues for this year, because of higher payments and higher withholdings from people who don’t want to pay again?

And even if the number and amount of tax refunds are on the average in line with previous years, the people getting them and the reasons why are quite different from recent history. I would bet a lot of refunds will be the result of stock market losses in 2018, especially in December. Those losses wouldn’t be something the average person would bank on for their withholding status, but it would reduce their overall income and the amount of tax they pay. So it gets made up with a larger refund.

The problem is that the type of person that has losses in the stock market that can be written off on their taxes (because they’re using “extra” money to gamble with, instead of tax-deferred IRAs or 401-ks), is also going to be richer and wealthier than many people who used to rely on the personal, SALT and mortgage interest exemptions to get refunds.

We thought the Tax Scam was a regressive mess that would explode the deficit, but I at least recognized that I'd be in line for a slight tax cut (or so I thought. My first look at our filing information indicates it might not have gotten us a thing). However, most people live their everyday lives and don’t spend time thinking deeply about tax decisions and changing the amount of money they have taken out of their paycheck, and they'll definitely notice if they have to write a surprise check.

Republicans lost a lot of ground in the suburbs among middle-class and upper-middle class voters in 2016 and 2018 due to Trumpism and other GOP idiocy. Now add in the impression of higher taxes and the diminishing of the benefits of home ownership, and we ain't seen nothing yet.



You wonder why Republicans are desperately (and dishonestly) trying to change the subject to abortion and Israel these days?