The original Legislative Fiscal Bureau's estimated of one big tax cut was really really low, despite warnings by those who couldn't believe the numbers:
“Critics have called the manufacturing and ag tax credit little more than a straight giveaway to some of the wealthiest individuals in Wisconsin.”
Democrats were right, and they were attacked by Republicans as out of touch tax and spend liberals. That was the extent of the thought that went into the following tax cut monstrosity:
Cap Times: Factory owner tax cuts cost $275 million more — twiceoriginal projections: A measure tucked into Gov. Walker’s 2011 budget that effectively eliminated state income taxes on owners of factories and farms in Wisconsin is costing way more than predicted and contributing mightily to the current budget shortfalls.Supply side geniuses don't believe demand creates jobs. They think if you give companies lots of money, those companies will hire people out of the goodness of their heart, even if they don’t need them:
The Manufacturing and Agriculture Tax Credit was hailed at the time as a job-creating effort that would let businesses invest the savings in new hires and equipment.Give credit to Winnebago County Executive Mark Harris, a policy and numbers wonk, who warned everybody when he ran for governor:
“I always believed that the credits would cost significantly more than the original projections.”
Harris also warned us when he appeared on Sly's afternoon radio show:
TWICE AS MUCH!!! HOLY COW: And for fun, take the top tax bracket and change it to zero:
But recent figures from the Legislative Fiscal Bureau show the credit will cost the state at least $275 million in additional lost tax collections over the next biennium, or more than double what was originally estimated. Top bracket taxpayers who qualify will see their state income tax rate fall from 7.75 percent to zero by 2016, when the credit fully kicks in.
Initial projections from Fiscal Bureau said the credits would amount to about $130 million in lost tax collections annually when fully implemented in 2016. But the Fiscal Bureau is now putting the cost at $224 million in 2015-16 and $284 million in 2016-17.
Give credit to Democratic Rep. Gordon Hintz for at least pointing out how the Walker administration’s “very poor choices” created the budget crisis. And Walker won’t budge, even if we have to give up the UW, parks and borrow for transportation:
Hintz asked Revenue Secretary Richard Chandler if the tax credit phase-in could be delayed by two years to restore some of the cuts in Walker’s budget … Chandler said Walker would not support a delay in the credit’s full implementation and defended borrowing in other areas like transportation to cover the cost of the tax cuts.
Who are these business owners and farm owners who will see their taxes cut to zero in 2016? Enquiring minds want to know.ReplyDelete