Tuesday, February 22, 2011

Interesting Point On Wisconsin

Andrew Sullivan makes an interesting observation: If the Governor of Wisconsin simply rescinded the tax cuts he passed on couples earning over $300,000 per year and individuals earning over $150,000 per year, that act alone would balance his state's budget.

Instead, he decided to lay most of the burden on government workers and their unions — except for those government workers and unions who supported his reelection: they retain all of their union capabilities and privileges.

Tomm, in the comments section in the previous post about Wisconsin, makes good points about public sector unions, and I've learned quite a bit about them while watching this all unfold. However, the two facts above — that repeal of tax cuts for the wealthy would solve the budget imbalance just as (if not more) easily, and that those government unions supportive of the incumbent politician are not subject to curtailment while all others are — makes this whole thing smell awfully fishy to me.

In other words, each of Governor Walker's budget-balancing proposals standing alone seem reasonable on their own merits. However, when grouped together as a whole, when compared to alternative methods, and when the preferential for-some-not-others considerations are made: the Machiavellian underpinnings really start to shine through. At the end of it all, I can only conclude that Governor Walker's primary goal here is to hamstring the government workers' unions that do not support him politically, and it is only his secondary goal to reduce his budget's deficit.

1 comment:

tomm said...

Simply, soak-the-rich policies have never worked in anyone’s favor. For instance, Maryland Governor Martin O’Malley raised income tax levels on wealthy households to 6.25 percent from 4.75 percent in 2008. Lawmakers in Annapolis wrongly predicted that this millionaire tax would generate $106 million. According to the Wall Street Journal,

Well, the state comptroller's office now has final tax return data for 2008, the first year that the higher tax rates applied. The number of millionaire tax returns fell sharply to 5,529 from 7,898 in 2007, a 30% tumble. The taxes paid by rich filers fell by 22%, and instead of their payments increasing by $106 million, they fell by some $257 million.

Certainly, Maryland’s millionaire tax back fired. It is estimated that Maryland lost $1 billion because one-third of wealthy residents moved or filed their taxes in other states with lower tax burdens. Since Maryland’s millionaire tax was implemented, Maryland’s deficit has increased from $1.7 billion to $2 billion.

Similarly, New York enacted a “millionaire tax” that raised tax rates on all residents making more than $200,000 a year. However, since New York implemented their so-called millionaire tax its state revenue has declined by 9 percent. According to New York Governor David Paterson.
Can you tell of a state where tax the rich is working?