Note: This first appeared in the RightWisconsin Daily Update on February 12, 2019. You can subscribe here.

The weather outside is frightful, but a middle class tax cut would be delightful. Someone, please, stop the snow.

I’m trapped inside handing out chores to my two teenage children.

“We thought it was a snow day.”
“It is, and somebody needs to shovel it.”

However, neither freezing rain, nor sleet nor dangerous roads will stop Governor Tony Evers from closing the state to business. The Associated Press is reporting that Evers has figured out what he’s going to do with the “Open for Business” signs. The new governor is going to have them cut in half and turned into “detour signs.”

You can’t make this stuff up.

What kind of detour does Evers have in mind? He wants to kill the tax credit for manufacturers, and the reason given is a middle class tax cut.

Legislative Republicans, in a moment of inspiration, called Evers’ bluff and offered to actually do the middle class tax cut by using the budget surplus instead. Unlike Evers, Republicans even figured out how to do the tax cut by making adjustments to the state’s income tax tables to actually benefit the middle class.

Assembly Republicans passed the tax cut on Tuesday and now it goes to the Senate where Republicans are likely to pass the bill there, too. The tax cut bill will then go to Evers’ desk where he will have to decide, was he sincere about cutting taxes or was he really just interested in sticking it to the state’s manufacturers?

Judging from the Democrats in the Assembly on Tuesday, it was pretty clear that their party is more interested in punishing manufacturers than it is in cutting taxes. One after another defended Evers’ plan to eliminate the tax credit for manufacturers while asking their Republican colleagues to wait until the governor proposes his budget. (Who knew Democrats had such a deference to the executive branch?)

But Republicans are correct. If the state is collecting too much in taxes, the surplus, then the state should be giving that money back to the taxpayers. What legislators should not be doing is looking at the pot of money to figure out what else it can be spent on. It wasn’t theirs to spend.

Democrats should also understand that part of the reason we have a budget surplus is the growth of Wisconsin’s economy is generating that tax revenue. Democrats seem determined to kill that prosperity because that’s what their ideology demands

We would rather the state used the budget surplus to put Wisconsin on the path to a flat tax, including reducing the top income tax bracket to pre-Governor Jim Doyle levels. However, given the reality of divided government, the middle-class tax cut that is proposed may be the best we can expect. However, that means Evers has to recognize the reality that Republicans will not be raising taxes on the state’s employers.

So Evers has to decide, is the tax cut more important or is the tax increase on manufacturers? We suspect the latter, in which case he is likely to get neither.

 

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