$2 trillion in tax cuts

[hfojvt]

I happened to see an ad for Walker, Wisconsin ranger, and that was the headline.

$2 trillion in tax cuts.

Naturally I wanted to see WHO got the tax cuts, figuring it would be mostly rich people.

The answer is that it is kinda hard to tell. First because I am not sure where the $2 trillion figure comes from.

There were these recent tax cuts. $537 million over two years. (or $2.7 trillion over ten, since they are permanent)

http://www.wisconsinbudgetproject.org/top-5-of-wisconsin-residents-get-18-of-tax-cuts-proposed-by-the-governor

7% of the benefits to the top 1%
5% of the benefits to the bottom 20%
44% of the benefits to the top 20%
31% of the benefits to the bottom 60%

But that does not include the AMT portion of the tax cuts.

"In considering these numbers, keep in mind that the ITEP analysis doesn’t account for changes the Governor’s proposal makes in the alternative minimum tax, with a price tag of roughly $37 million in this biennium and much more in the next biennium, and which primarily benefit a relatively small group of wealthy state benefits. [sic]" (should be 'residents' rather than 'benefits'.)

Not to mention tax increases on the poor.

"3. This tax cut comes on the heels of a significant tax increase for Wisconsin residents and families with low incomes. In 2011, state lawmakers made deep cuts in two tax credits aimed at helping keep taxes low for residents with low incomes, resulting in steep tax hikes for many families" - See more at: http://www.wisconsinbudgetproject.org/five-things-to-know-about-wisconsins-proposed-tax-cut-package#sthash.C53swaNF.dpuf

"The failure to annually adjust the Homestead Credit for inflation has cost Wisconsin seniors dearly. A typical person living on Social Security in Wisconsin has paid nearly $12,500 more in property taxes over the last 20 years than he or she would have if the Homestead Credit formula had been adjusted to keep up with the cost of living." - See more at: http://www.wisconsinbudgetproject.org/tiny-piece-of-projected-surplus-could-mitigate-recent-tax-increases-on-families-and-seniors-with-low-incomes#sthash.Cni1WCFm.dpuf

That is so typically Republican - stealth tax increases on the poor, combined with tax cuts for the rich.

Then there was this tax cut from 2013 of more than $650 million (for two years? or for ten years?)

"Wisconsin Governor Scott Walker also signed into law a budget Sunday that included income tax cuts totalling more than $650 million. The tax plan reduced income tax rates from 4.6 percent, 6.15 percent, 6.5 percent, 6.75 percent, and 7.75 percent to 4.4 percent, 5.84 percent, 6.27 percent, and 7.65 percent. The legislation also reduced the number of tax brackets from five to four." http://www.ctj.org/taxjusticedigest/archive/2013/07/bad_budgets_become_law_in_ohio.php
Again, hard to find an analysis of that, but they said of his original proposal, that

54% of the benefits to the top 20%
1% of the benefits to the bottom 20%

Governor Walker has described the tax cut as benefiting the middle class, but most of the dollars will go to the pockets of the best-off. Fifty-four percent of the tax cut will go to the top 20% of tax filers, according to an analysis of the proposal by the Institute on Taxation and Economic Policy. The bottom 20% of taxpayers would get just 1% of the tax benefit, as shown in the chart below. - See more at: http://www.wisconsinbudgetproject.org/middle-class-tax-cut-will-mostly-wind-up-in-the-pockets-of-the-highest-earners#sthash.QDsvmDbo.dpuf

but here's the proposal

proposal
4.6 to 4.5
6.15 to 5.94 income over $14,000
6.5 to 6.36 income over $28,000
6.75 to 6.75 income over $211,000
7.75 to 7.75 income over $310,000

and here's the actual

4.6 to 4.4
6.15 to 5.84
6.5 to 6.27
6.75 to 6.27
7.75 to 7.65

slightly larger cuts to the bottom two rates, but also much bigger cuts to the top two rates. So very likely to be even MORE unequal than

54% to the top 20%
1% to the bottom 20%

And one of the authors of a Republican proposal said "As the lawmaker himself concedes, “t is nearly impossible to create a tax reform or tax cut that is not going to disproportionately lower taxes for upper-middle-class and rich taxpayers,” " http://www.ctj.org/taxjusticedigest/archive/2013/05/tax_plans_for_wisconsin_go_fro.php#.UdHUkzsuaSo

This from an accountant. "It's nearly impossible".

Here's how easy it is.

1. increase the homestead credit and make it refundable
2. increase the EIC and make it refundable (in this way poorer people get back some of the sales and property taxes they pay)
3. increase the standard deduction
4. lower the rate to 2% on the first $5,000 of taxable income (from 4.6%)
5. make the rate structure more progressive in general, like so

2% on first $5,000
4% on next $5,000
5% on next $10,000
6% on next $20,000
6.5% up to $211,000 (same as current)
6.75% up to $310,000
7.75% over that

The way that have it now, somebody making $30,000 pays the same marginal rate as somebody making $300,000. My way puts lower rates for the lower and middle class and keeps the higher rates at the top.

It favors the bottom.

How tough is that?

And how tough would it be for Walker's opponent, Mary Burke, to make such a proposal and contrast it to what Republicans DID? And say something like "Walker - better for the rich, Burke - better for the middle class"

[hfojvt]

1. okay, apparently this is not a winning issue

even on DU.