A coalition of health, welfare and labor organizations is pushing back on the idea that the state can not afford to spend money to improve the lives of its middle-income and poor residents.
“For too long, we’ve all been told that there’s not enough money in the budget to help our communities thrive. That is not true,” a spokesperson claimed.
Where did they find the money? In two tax loopholes that benefit those in high-income tax brackets. Elimination of a tax break that greatly reduces the state income tax for certain manufacturers and agricultural producers would yield about $284 million annually. Nearly 80 percent of the credit goes to people earning over $1 million. Treating capital gains like ordinary income would yield about $164 million annually. The top 2 percent of earners receive almost half of the capital gains tax breaks. The analysis assumes a two-year legislative budget.
The savings could buy a lot. “A Wisconsin Budget for All” proponents offered a list that includes an increase in living wages for caregivers, an expansion of the earned income tax credit that would help low-income workers, free tuition at technical colleges for seniors and some older workers, a new funding stream to hire and retain teachers, and other programs that would improve the lives of Wisconsin residents.
UPDATE: The Wisconsin Budget Project reported that 19 states increased the minimum wage this month. Most states exceed the federal requirement for a minimum wage of $7.25/hour. Wisconsin’s minimum wage remains at $7.25/hour. Click here to read the full report.
UPDATE: The Wisconsin Budget Project updated its information on the cost to taxpayers of the tax break for agricultural producers and manufacturers. Below is an excerpt from the report.
“The Manufacturing and Agriculture Credit (MAC) is on track to cost the state an estimated $299 million this year by cutting taxes for manufacturers and others – and more than $650 million in the two-year budget period that starts in July 2017. The cost of this tax break is running more than double the amount that lawmakers originally anticipated when they approved the credit in 2011.”