Maybe we don't need a tax cut
Gov. Tony Evers celebrates "historic" tax cuts in the last state budget. Schools are still facing austerity. Photo via Gov. Evers' Facebook page
As Republicans in Congress struggle to deliver President Donald Trump's massive cuts to Medicaid, food assistance, education, health research and just about every other social good you can think of, in order to clear the way for trillions of dollars in tax cuts to the richest people in the U.S., here in Wisconsin Gov. Tony Evers and state lawmakers are working on the next state budget.
The one thing our Democratic governor and Republican legislative leaders seem to agree on is that we need a tax cut.
After throwing away more than 600 items in Evers' budget proposal, GOP leggies now say they can't move forward with their own budget plan until Evers makes good on his promise to meet with them and negotiate the terms for the tax-cutting that both sides agree they want to do. Evers has expressed optimism that the budget will be done on time this summer, and said the tax cuts need to be part of the budget, not a separate, stand-alone bill. Evers wants a more progressive tax system, with cuts targeted to lower-income people. In the last budget, he opposed expanding the second-lowest tax bracket, which would have offered the same benefits to higher earners as the lower middle class.
But what if we don't need a tax cut at all?
It has long been an article of faith in the Republican Party that tax cuts are a miracle cure for everything. Trickle-down economics is a proven failure: The wealthy and corporations tend to bank their tax cuts rather than injecting the extra money into the economy, as tax-cutters say they will. The benefits of the 2017 tax cuts that Congress is struggling to extend went exclusively to corporations and the very wealthy and failed to trickle down on the rest of us.
In the second Trump administration, we are in new territory when it comes to tax cutting. The administration and its enablers are hell-bent on destroying everything from the Department of Education to critical health research to food stamps and Medicaid in order to finance massive tax breaks for the very rich.
If ever there were a good time to reexamine the tax-cutting reflex, it's now.
Evers has said he is not willing to consider the Republicans' stand-alone tax-cut legislation, and that, instead, tax cuts should be part of the state budget. That makes sense, since new projections show lower-than-expected tax revenue even without a cut, and state budget-writers have a lot to consider as we brace for the dire effects of federal budget cuts. The least our leaders can do is not blindly give away cash without even assessing future liabilities.
But beyond that, we need to reconsider the knee-jerk idea that we are burdened with excessive taxes and regulations, that our state would be better off if we cut investments in our schools and universities, our roads and bridges, our clean environment, museums, libraries and other shared spaces and stopped keeping a floor under poor kids by providing basic food and health care assistance.
Wisconsin Republicans like to tout the list of states produced annually by the Tax Foundation promoting 'business friendly' environments that reduce corporate taxes, including Wyoming, South Dakota, Alaska and Florida. They also like to bring up ALEC's 'Rich States, Poor States' report that gave top billing last year to Utah, Idaho and Arizona for low taxes and deregulation.
What they don't track when they lift up those states are pollution, low wages and bankrupt public school systems.
I'm old enough to remember when it was headline news that whole families in the U.S. were living in their cars, when homelessness was a new term, coined during the administration of Ronald Reagan, the father of bogus trickle-down economics and massive cuts to services for the poor.
Somehow, we got used to the idea that urban parts of the richest nation on Earth resemble the poorest developing countries, with human misery and massive wealth existing side by side in our live-and-let-die economy.
Wisconsin, thanks to its progressive history, managed to remain a less unequal state, with top public schools and a great university system, as well as a clean, beautiful environment and well-maintained infrastructure. But here, too, we have been getting used to our slide to the bottom of the list of states, thanks in large part to the damage done by former Republican Gov. Scott Walker.
We now rank 44th in the nation for investment in our once-great universities, and the austerity that's been imposed on higher education is taking a toll across the state. Our consistently highly rated public schools have suffered from a decade and a half of budget cuts that don't allow districts to keep pace with inflation, and recent state budgets have not made up the gap.
Now threats to Medicaid, Head Start, AmeriCorps, our excellent library system, UW-Madison research and environmental protections do not bode well for Wisconsin's future.
In the face of brutal federal cuts, we need to recommit to our shared interest in investing in a decent society, and figure out how to preserve what's great about our state.
Tax cuts do not make the top of the list of priorities.
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