In The News
IWF’s new research reveals state’s tax avoiders
By Dominique Paul Noth
Editor, Milwaukee Labor Press
Posted July 14, 2011
There is a tendency, stemming from his limited skills as Milwaukee County executive, to think of Scott Walker as a one-trick pony willing to destroy safety nets as long as he didn’t raise property taxes (his rather misguided approach to economic health). But as governor he’s ponied up in misguidedness, so to speak, by learning how to reward corporate backers with greater freedom from tax bills in exchange for their sophisticated help in disguising transgressions within a complicated bureaucratic process.
He now has a legion of tricksters to help him -- right-wing foundations and lobbyist conduits that spent decades concocting legislative agendas; obedient operatives to stack the state deck; minions to coerce traditional Republicans into going along with excess if they want to maintain power. This slicker mechanical bull has the forces to stampede his party, the media and the public on several fronts.
It may – wishful thinking – be only temporary political tyranny, but it does force opponents to act more nimbly and think more creatively than ever before.
Unions, for instance, were accused of being too slow to react, and obviously they were first focused on the long-term damage to their members’ rights, as well as to their own political clout, by his attack on public worker bargaining rights. Polls alone tell Walker he underestimated their nimbleness, but it took time to develop.
The biggest slowness lingers, and it is the media’s – normally the people’s balancing wheel in exposing political games. But in large part media, electronic and otherwise, has not yet caught on because of the smorgasbord of approaches within the budget. Even today, they’re misled by GOP semantic games of suggesting the recalls are wrong in principle – most people don’t like this last resort – and weren’t meant to throw people out for a “single” vote. That “single vote” line is the GOP semantic myth given the multi-pronged assault of the majority budget, which clearly warrants the last-ditch resort of recalls.
Why has the media largely failed to acknowledge the sweep and calculation of Walker’s attacks and the public reaction, which transcends union issues.
One reason is failure to understand the politically-motivated ideology combined with economic complexities.
So where does the public turn for answers when the mass media fails?
A few forceful and probing analysts do remain to look at the real consequences of Walker’s methods, in which shared sacrifice is eliminated in the haste to protect his well-heeled corporate backers, When you start looking at who is getting away with murder – that is, not paying a whit in our supposed economic crisis – when you look at the dead-of –night rewards inserted into the budget to lower the revenue the state gets from corporations, a different picture of Walker’s policy emerges than the one conveniently portrayed in his press releases and, alas, in too much of the media coverage.
Which brings us to IWF, the Institute for Wisconsin’s Future, which just created a new research based newsletter that reveals who is not paying any fair share. But the newsletter does more without flourishes – it exposes as IWF often does the revenue opportunities that Walker’s packaged think machines have overlooked and are at least worth debating. (It will take an evaporation of the GOP control of the senate to bring such detailed discussion, but that is around the corner.)
The research director for the IWF is Jack Norman, who for decades was the lead business reporter for The Milwaukee Journal and whose ability to read corporate financial data and legislative trickery, and explain it all in English, is unsurpassed. The newsletter, whose first edition can now be found in the Take Action section, is bluntly named: Who Does Not Pay Taxes?
In lucid English and simple charts, it tells you the facts – and quite fairly. For instance, Norman points out that when the market collapsed in 2009 it was fair that Associated Bank paid nothing in state taxes that year. But from 2001 to 2008, when the Green Bay bank, the state’s largest, made $2.6 billion in pre-tax profits, it also paid zero in state income taxes. How can that be? And what will it escape with now that Walker’s budget adds even more loopholes that the bank – which last year held deposits of $17 billion, 71% from state residents –can drive bigger trucks though?
Among the loopholes are devices of counting the losses in one bad recessionary year to wipe out taxes on obscene gains in profitable years. Another prevents the Department of Revenue from challenging tax-avoidance strategies attacked before Walker took over.
More profits for corporations would probably not bother many voters if that translated into more employment, more jobs and more money for consumers to spend. Any promises in that vein are pie in the sky, as Norman’s research reveals – no mechanisms to create more jobs, just laws and government money to reward those who gave money to Walker and apparently suggested many of the loopholes.
Norman’s research reveals a little-known budget maneuver inserted by GOP Sen. Glenn Grothman that by 2017 will virtually eliminate corporate income tax on manufacturers and agricultural businesses. The step by step change will cost the state $129 million in revenue and has no teeth to make companies create jobs – yet even in the days before Walker, Wisconsin has the fourth lowest taxes in the US for new business investments. And we all know from current news stories even in conservative publications like the Wall Street Journal how businesses have found ways to increase profits without increasing jobs or wages, which goes a long way to explaining our unemployment levels.
The lack of effort by Walker to make businesses reward communities -- while they are lining their own pockets -- is one of the most troublesome aspects of his approach to Wisconsin’s future. You would think that most newspapers would be all over these schemes.
Until they wake up, we’ve got Norman, who may have the experience to take the rest of the media to the woodshed and teach them the basic principles of Journalism 101.
But that’s not his mission. It is, he says, to advance ways of improving the state’s economy and revenue picture – and those are reports the Labor Press is committed to publicizing.