Democrats in the Wisconsin legislature are criticizing a tax credit they say benefits Wisconsin’s most wealthy. Representative Gordon Hintz (D-Oshkosh), a member of the Joint Committee on Finance, released a memo from the Legislative Fiscal Bureau.
Hintz said the memo shows that by the end of the 2017-2019 budget, the Manufacturing and Agriculture Tax Credit will have cost the state over $1.4 billion, an amount more than $804 million above the budgeted amount at the time the credit was passed.
“The lost revenue from this credit resulted in the Governor borrowing more money on the taxpayer dime for the last two years – just to keep his budget in the black,” Hintz said. “Meanwhile, this tax giveaway for the rich continues to grow at an unsustainable rate, making it harder to fund priorities that benefit all Discontinuities in the future.”
A table in the Legislative Fiscal Bureau memo shows that $22 million of the Manufacturing and Agriculture Tax Credit is going to just 11 millionaires in the state.
“And if you go down the list just a little bit, overall the amount of people who are taking up about seventy five percent of the total tax break, these are people that are making more than a million dollars a year,” said state Senator Jon Erpenbach (D-Middleton). “That’s just absolutely crazy.”
The credit, created in 2011 and now fully phased in, was pitched as a jobs creating move but a study last year found no clear links to new jobs.
Scott Manley, Senior Vice President of Government Relations for Wisconsin Manufacturers and Commerce, released the following statement defending the tax credit and job creators.
“The manufacturing and agriculture tax credit has given a boost to family-supporting, middle class jobs all across our state, and it is imperative that we keep it in place. The Fiscal Bureau memo proves that the credit is working – the projected growth of the credit means that manufacturing production in our state will necessarily grow too. This is great news for middle class families.”
Governor Scott Walker’s spokesman, Tom Evenson, also released a statement.
It was just announced that Wisconsin ranked first in the Midwest for manufacturing job growth, and now the Democrats want to raise taxes on manufacturing?
Wisconsin has budget surpluses, the lowest unemployment rate since 2001, and wages are up. Wisconsin is working. Now is not the time to turn back the clock to the Democrats’ tax-and-spend policies that failed working families in years past.
We have provided more than $4.7 billion in tax relief for all Wisconsinites. This includes lower property taxes than when Governor Walker took office and $1,159 in income tax relief for the typical Wisconsin family. Our tax reforms are growing key sectors of Wisconsin’s economy – manufacturing and agriculture.
Governor Walker’s budget will increase funding for public education at all levels, continue tax relief, and reward work. We will be able to do all of this without raising taxes because our reforms are working for Wisconsin.
Democrats remain unconvinced. “There are a lot of people who are being screwed by this,” Erpenbach said.