State Revenues will dry up with Scott Walker Business Tax Handouts.

The Walker plan is simple; tax cuts for business. In the old days, those cuts would have been made up with tax increases on everybody else. But an odd thing has happened over time; the hard line no tax pledge! That shift is gone. As state revenues dry up, Republicans will claim more cuts are needed.

Why hasn’t the media asked anyone to analyze what will happen under Walker’s cuts? Well, Kevin McGee, an economics professor at the University of Wisconsin-Oshkosh and a former member of the Oshkosh Common Council, did just that. Check out the following, edited here. Thanks to Rock Netroots for uncovering what should be a part of the recall election debate.  

So how "Business Friendly" has Wisconsin gotten over the last 15 months? To answer that, we need to look no further than at the Wisconsin Manufacturing and Agricultural Tax Credit. The credit was enacted into law last year … being phased in over the next 4 years. Once fully phased in, beginning January 2016, individuals, corporations, and LLCs with agricultural or manufacturing income will be able to claim a 7.5 percent tax credit on that income against their state income taxes.

Suppose you and your spouse earned a total of $50,000 last year … You get a $10,767 standard deduction and a $1,400 exemption for the two of you. When you look up your taxes on the remaining $37,833, the tax table says you owe $2,155, before credits. Your property tax credit knocks off maybe $250, and the married couple credit another $480, so you end up paying the state $1,425 in income taxes. And for each extra $600 you earn, you'll pay an additional $78 in taxes.

Now suppose it's 2016, and I and my wife earn $500,000 running a farm or factory.

Taxes owed will be about the same. But here’s where the wheels start falling off the states revenue stream.

Now if we made our half million selling shoes or giving piano lessons, we'd have to pay the $33,558. But we ran a farm or factory, which gives us a tax credit of 7.5 percent times $500,000. So we can subtract $37,500 from our tax bill, leaving us paying to the state – absolutely nothing … after 2015 a farm or factory owning couple could earn up to about $625,000 a year before owing a single dime in state taxes. And they could earn about $796,000 before they owe that same $1,425 that you have to pay on your measly $50,000.

So next year, when a whole lot of people have their tax bills cut a bunch, and the year after that cut even more, don't be surprised if the state has a whole series of new budget crises to solve. But that won't be a problem. Because we'll know who to blame. It'll be those greedy teachers, firefighters, prison guards, social workers, and other public employees. As usual.