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Monday, Feb. 4, 2013

Tax Cut Politics

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Polls, the ones Americans entered to vote in November and the public opinion surveys they’ve answered since, show people are starting to see through dishonest Republican political rhetoric.

But in Wisconsin the real test this year will be whether voters finally are able to see through the deceptive gimmick Scott Walker has ridden into the governor’s office—tax cut politics.

Walker became a shining star among state Republicans with a carny trick. As Milwaukee County executive, Walker submitted a no-tax-increase budget every year.

You might think that would be difficult. Walker had been left with the budgetary disaster of a financially destructive pension scandal and all the complications of managing the state’s largest urban county.

But that’s only a problem if you actually want to improve the situation. Walker had no intention of staying around that long.

For Walker, submitting a no-tax-increase budget was easy as pie. He simply didn’t worry about including enough money to actually run the county.

Here’s the “now-you-see-it, now-you-don’t” part. County taxes went up every year Walker was county executive.

That’s because the county board was more responsible than Walker and provided the money needed to run the courts, the district attorney’s office, parks, mass transit and other county functions. 

After blaming supervisors for raising taxes, the next year Walker would submit the board’s responsible budget from the previous year, again without any increases to meet rising needs and expenses in the coming 12 months. Voila. Another magical no-tax-increase budget the board had to increase to pay the bills. 

 

Will Walker Fool Us Again?

Fast forward to today under Gov. Walker. It’s just two years since Walker claimed the state faced an overwhelming budget disaster that required him to destroy bargaining rights for public employees, eviscerate funding for education and local government services, and invite with open arms the environmental destruction of mining into the state.

Despite Wisconsin languishing near the bottom in job creation, Walker has performed more budgetary sleight-of-hand.

Not only has Wisconsin’s enormous budget crisis completely evaporated, but the state predicts a surplus of nearly half a billion dollars. Let the good times roll! Let’s start passing out tax cuts! A joyful public should re-elect Walker for sure!

Not if voters realize what’s really going on. The question is whether Walker can continue to fool average voters into believing they’re the ones who benefit. They’re not.

First, we should remember where that surplus came from. With Walker’s drastic budget cuts, that $485 million budget surplus came out of the education of children and health care for the disabled, and from tax hikes on the poor achieved by reducing the state’s Homestead Credit and Earned Income Tax Credit.

Walker and Republican leaders claim their tax cuts will benefit the middle class. It’s simply not true. Their absurd definition of middle class includes taxpayers in the top 2%, tilting the tax cuts overwhelmingly toward the wealthy.

Republican Assembly Speaker Robin Vos said with a straight face that tax cuts should target the middle class earning between $20,000 and $200,000.

That would exclude everyone making less than $20,000 a year—40% of state taxpayers—while still benefiting millionaires and billionaires who would pay lower taxes on their first $200,000.

Those making less than $20,000 needn’t feel too bad, though. Truly middle-class taxpayers—the median family income in Wisconsin is just over $50,000—will hardly notice their tax cuts anyway.

Walker recently claimed a “typical family” could receive a state tax cut of about $100. Actually, Walker doubled it to $200 to make it sound bigger, but that would be over two years. Someone should tell the governor that people pay taxes annually.

Meanwhile, don’t spend that C-note all in one place.

Walker didn’t say how much those “pretend” middle-class folks making $200,000 a year would receive. If he did, it might start a riot.

Across-the-board percentage tax cuts over such a wide income range always direct the biggest financial rewards to the wealthiest taxpayers. It’s one reason for the tripling of wealth for those at the top over the past 30 years while the income of ordinary working people, adjusted for inflation, has stagnated or even fallen over those three decades.

Tax cuts for the true middle class would improve the economy for everybody and create jobs. That’s because the middle class spends the money immediately. When people buy more goods and services, more people get hired to produce more goods and provide more services.

Despite what you hear, tax cuts for those at the top don’t necessarily create any jobs. That’s because the super-rich already are spending all the money they want. They just find tax shelters for their additional windfalls.

Ordinary voters don’t really benefit from tax cuts that toss them a few crumbs from the master’s table. Walker’s tax cut politics are just another flimflam that destroys the quality of life in our communities while stuffing the pockets of the wealthy.