Witness a machine turn coffee into pointless ramblings...
Wisconsin manufacturers and farmers are poised to cash in on the biggest state tax break they’ve received in decades, a move hailed by business groups but questioned by others worried about the annual tax revenue loss of more than $100 million.
The Republican-controlled Legislature included the “domestic production tax credit” in the 2011-13 state budget. It applies to production in Wisconsin and on Wisconsin property that’s assessed for manufacturing or agricultural use. Over the next four years, income taxes on these sectors will be reduced to nearly nothing.
Todd Berry, president of the Wisconsin Taxpayers Alliance, a nonpartisan research group, said Wisconsin is one of the top manufacturing states in the country and it makes sense to assist the sector economically, given its importance and the stress it has been under.
“The harder question is whether it makes sense for state government to essentially play favorites,” Berry said. “Is there some reason we should favor a widget manufacturer over a software developer?”
Berry also faulted the Legislature for failing to specify how the tax cut would be funded, either with more revenue or less spending.
Still, Jon Peacock, director of the Wisconsin Budget Project, a Madison-based tax and budget policy research organization, said one of the problems with the tax cut is it’s not directly tied to job creation.
“We have no assurance that any of the businesses that get this tax break aren’t just going to pocket the money or use it for higher dividends for their stockholders,” Peacock said.
The cost of the awards is certainly far higher. A full accounting, The Times discovered, is not possible because the incentives are granted by thousands of government agencies and officials, and many do not know the value of all their awards. Nor do they know if the money was worth it because they rarely track how many jobs are created. Even where officials do track incentives, they acknowledge that it is impossible to know whether the jobs would have been created without the aid.
“How can you even talk about rationalizing what you’re doing when you don’t even know what you’re doing?” said Timothy J. Bartik, a senior economist at the W.E. Upjohn Institute for Employment Research in Kalamazoo, Mich.