Read My Lips

Read My Lips
GOP Tax policy only helps the rich

Here’s a surprise. The 2017 Trump tax cuts that were supposed to stimulate economic growth and trickle down to working people through higher wages have not come close to achieving those lofty selling point goals. Instead, People who own businesses and other concentrated wealth will have a lot more money to hoard and the federal budget will have significantly less to spend.

The Congressional Research Service, an in-house, non-partisan fact finding body, just published a paper outlining the effects of the 2017 Tax Revision, often called the Tax Cuts and Jobs Act, and the GOP members in Congress cannot be happy. It finds that none of these secondary effects have shown up and are not likely to in the long run. Growth has not increased above levels before the tax cuts went into effect. Wages have not increased either. There was a short and small bump in repatriated corporate cash from abroad, but that has leveled off. The expected business investment from the tax cut windfall failed to materialize. 

Many of the GOP tax cuts supporters claimed, without any support from recognized economists, that anticipated business growth would pay for the loss of revenue to the treasury and certainly not increase the deficit. The report shows that, so far, growth has made up about 5 percent of the lost revenue, missing the projections by a mere 95 percent. 

Cut supporters helped sell the plan by promoting increased worker wages from the excess corporate cash provided by the cuts. Unfortunately, the report finds no widespread increases in bonuses or wages. It does show significant stock buy-backs and repatriated dividends from subsidiaries abroad helping businesses increase their cash holdings. 

I doubt that many of those who supported the cuts will back away from them in light of the new data. Their corporate donors are happy and that’s where they get most of their economic support. More rational constituent centered lawmakers might use the report to marshal support for repealing the cuts and then using the trillions in lost revenue to build more realistic growth and worker supporting policies.

Here in Wisconsin, the GOP controlled purse strings continue to tighten, stunting growth potential with proven successes. Our leaders do not want to be outdone by their federal counterparts.

Members of the GOP controlled legislative Joint Finance Committee continued their evisceration of Governor Evers’ Peoples Budget on Tuesday. Evers proposed spending $130 million more on the UW System over the next two years. The GOP Committee approved just $58 million more, with $45 million being subject to committee approval of a report showing how the money would be spent. 

UW System President Ray Cross opined that these decisions missed an opportunity to meet the future needs of the state and felt “like a kick in the shins.” Cross indicated that the approved amount will prevent the UW from expanding high demand nursing and engineering programs on many campuses. They will also limit the System’s ability to hire and retain quality educators.

While the Committee agreed with Evers to continue the UW tuition freeze, it failed to approve state funding for the revenue lost from the freeze. Fully funding the freeze would have helped the UW System catch-up from all the previous funding cuts under the Walker dynasty.

The educations provided by our UW System have fueled state economic growth for decades. As a proud Alum, I recognize that my professional success and contributions to Wisconsin’s economy over 37 years of lawyering would not have been possible without the support and funding provided to me as both an undergrad and law student on the Madison campus in the 1970s.

Failing to adequately fund the UW System under the guise of accountability and political correctness, cuts off our economic nose to spite our collective faces. 

The Joint Finance Committee previously voted not to expand Wisconsin participation in Medicaid, a federal program that helps cover the cost of healthcare for the indigent. Even though data from other states that have received Medicaid expansion funds shows significant taxpayer savings for healthcare costs for the uninsured or underinsured, our legislators continue to believe that someday, maybe or possibly, the federal government will change its mind and force state taxpayers to continue to cover these costs. Under this rational, thousands of poor people will go without necessary healthcare that could return them to productive citizenry, the state’s share of the current costs will continue to rise anyway and our economy will continue to suffer. 

These shortsighted, no tax increase decisions doom opportunities for working- and middle-class people to prosper and succeed like my generation was able to do. The better educated we are, the more we earn. The more we earn with our labor, the more Wisconsin prospers.