We Must Create an Economy that Works for Everyone
Tax breaks for the most wealthy continue to be the Republican Party’s central economic plan. TrumpCare contains $600 billion in tax cuts for America’s wealthiest. Speaker Vos and the Assembly Republican Caucus recently introduced a transportation proposal that would institute a flat income tax in Wisconsin, cutting taxes for millionaires by 50 percent.
Wisconsin Republicans slipped the biggest corporate tax giveaway in Wisconsin’s history, the Manufacturing and Agriculture Tax Credit (MAC), into the 2011-2013 budget at the very last minute. Designed to nearly eliminate state tax responsibility of manufacturers and big agricultural producers, the MAC is projected to cost $654 million over the next two years. However, businesses don’t have to create one job to get it, and, in fact, they can outsource jobs and still claim this credit.
No surprise, the MAC largely benefits Wisconsin’s wealthy, with 88 percent of this money going to individuals making more than $500,000 annually. Eleven multi-millionaires who make more than $30 million each, will receive $22 million in tax breaks. Despite initial promises of a modest tax cut, in the first seven years since is enactment, MAC has cost Wisconsin taxpayers $805 million dollars more than they originally promised and with less than optimal results.
Despite the massive wage infusion this tax gives to the most-wealthy, it isn’t trickling down to bump up the wages of most working people. Just last week, we learned that overall, private sector wage growth has decreased, with manufacturing wages plunging 5.3 percent. And despite the full implementation of this giveaway, Wisconsin still lost 3,777 manufacturing jobs between 2015 and 2016 and had the worst job creation performance since the recession in 2008-2009.
Earlier this year, I joined several of my Democratic colleagues in introducing a middle class tax cut proposal, Assembly Bill 200. This bill puts money into the pockets of working people most hard hit with declining wages by focusing tax relief on individuals making between $12,000 and $60,000/year and families making between $20,000 and $100,000/year. A family of four earning $45,000 would receive $607 in additional income. This is especially needed given, according to the Institute on Taxation and Economic Policy, middle income people spend the greatest percentage of their income in local and state tax payments. And a Pew Charitable Trust study found that the number of Wisconsin middle income families is declining faster than any state in the nation.
We pay for this investment in Wisconsin’s middle class by eliminating MAC and creating a fifth tax bracket for individuals earning more than $500,000 and couples making more than $1 million. It probably is no surprise that this group pays the lowest percentage of their income in local and state taxes.
Our proposal reflects the opinions of the majority of Americans who believe that large corporations and wealthy families should have to pay their fair share.
The MAC is a prime example of Republican policy makers ignoring the need to invest in the working families of our state who are suffering from declining wages. Until most working people receive a bump up in wages, our economy will only work for those at the top. What we really should be creating is an economy that works for everyone.