Report Released Today Recommends State and Federal Reforms to Close Offshore Tax Havens
Maine legislators recently gave preliminary approval to a bill that could make it the third state to pass legislation to crack down on corporate tax avoidance in off-shore tax havens. The proposed legislation would close the so-called “water’s edge” loophole by requiring corporations to report income from a list of 38 known offshore tax havens. Passage of the bill would generate an estimated $10 million per year (in a state less than a quarter of the size of Wisconsin).
Oregon and Montana have already enacted such legislation. In 2010, Montana recovered $7.2 million, and state analysts expect Oregon to recover $18 million this year. The problem costs states about $1 billion, according to a report by US PIRG report. You can read more about the bills in these three states in an April 3 Washington Post blog post. Read more
Tax Day is approaching, and with it comes many negative messages about taxes. But this Tax Day, let’s remember that to build a strong economy and create jobs, we need to invest in what works – and we can’t do that without taxes.
To build a strong Wisconsin economy, we need to invest in assets that help businesses thrive and help hard-working people climb into the middle class. That means Wisconsin needs to continue our tradition of supporting high-quality schools and preschools, an affordable university system, a healthy workforce, and a clean environment.
Taxes make these investments possible.
When state lawmakers cut income taxes for the wealthy or for corporations, we undermine our ability to support important services that Wisconsin businesses and residents rely on every day. We should focus on making sure we have the resources we need to invest in the building blocks of job creation and economic growth. Read more
Wisconsin is a better place when we all do well. Unfortunately, while the wealthiest have seen their incomes skyrocket in recent decades, incomes have stagnated for the middle class and low-income people. It’s becoming harder to stay in the middle class in Wisconsin.
Our state tax system makes this problem worse. In fact, if you look at who pays taxes in Wisconsin, it turns out that middle-class and low-income families pay a bigger share of their incomes in state and local taxes than the wealthiest households in the state. We call on struggling families to pay 9.6 cents out of every dollar they earn in state and local taxes, while the wealthiest taxpayers pay just 6.9 cents out of every dollar of income. And many large, profitable corporations in Wisconsin pay little or no state income taxes.
Wisconsin’s Earned Income Tax Credit helps address this problem by allowing parents who work at low-wage jobs to keep more of their income, making it possible to afford basic necessities. Read more
While Bills Advance in Minnesota and Elsewhere, Four Red States Are Poised for Minimum Wage Referenda
Republican opposition might bottle up the national minimum wage increase being pushed by the President, but the strong public support for a higher minimum wage is forcing action at the state level. Many blue states are approving substantial increases in the minimum hourly wage, and voters are putting increases on the ballot in a number of red states.
Today Minnesota became the latest state to pass a significant minimum wage increase. Within the last 24 hours, both houses approved a bill that would raise the minimum wage in the Gopher State to $8.00 per hour in August, and then in two more steps to $9.50 per hour in 2016. The increased wage would apply to businesses with more than half a million dollars in annual gross sales.
Beginning in 2017, the MN minimum wage would rise automatically with inflation, up to 2.5% a year. Read more
Wisconsin voters approved ballot initiatives in 25 districts yesterday, voluntarily raising property taxes in order to fund services or improved infrastructure in their districts.
Referenda approved at the ballot box include:
- The issuance of $20 million in debt by the Green Bay Area School District to replace heating, ventilation, and cooling systems, and to make other repairs.
- The issuance of $18.9 million debt by the Johnson Creek School District to build a new building for students in grades 5 through 12.
- Allowing the Oshkosh Area School District to exceed revenue limits by a total of $28 million over the next seven years. Approval of the referendum means that the district will be able to avoid taking several steps that would harm students, including closing a middle school; reducing art, music, and physical education time by half for elementary students; and doubling athletic participation fees at some schools.
- Allowing the Fort Atkinson School District to avoid drastic cuts in programs for students by exceeding revenue limits by a total of $5.3 million over the next three years.
One of American’s most important and insightful economists will be coming to Madison on Friday, April 4th. Don’t miss this chance to hear Dean Baker share his vision of what’s happening in today’s economy.
Wisconsin lawmakers advocating for more tax cuts should consider the example of Kansas, a state that has pushed through enormous tax cuts and that has been held up by tax-cut proponents as a model worth replicating.
Poor residents of the Milwaukee area are more economically segregated than poor residents in any other large metropolitan area in the country, according to a new report from Atlantic Cities. The Milwaukee metropolitan area includes West Allis and Waukesha.
When medium and smaller-sized metropolitan areas are also included in the ranking, Milwaukee ranks second in the country in poverty segregation, behind only State College, Pennsylvania. Madison also ranks high in poverty segregation.
Areas where the poor are most segregated are in the Midwest and the Northeast, and the lowest levels occur in the Sunbelt, especially Florida, and the West.
Cities, in Wisconsin and elsewhere, should strive to avoid high levels of poverty segregation. According to the article: “This increasing concentration of poverty poses a host of problems to communities. Less advantaged communities suffer not just from a lack of economic resources but from everything from higher crime and drop-out rates to higher rates of infant mortality and chronic disease.” People living in segregated poverty also have a harder time getting access to jobs and quality schools. Read more
New employment figures show a familiar pattern: Wisconsin is adding private-sector jobs at a rate considerably below the national average.
In light of that persistent pattern, it comes as no surprise that the latest economic outlook report released today by the Department of Revenue indicates that Wisconsin will fall far short of the Governor’s goal of adding 250,000 private sector jobs. The Department of Revenue projects just 134,000 new jobs from 2010 to 2014.
The number of private sector jobs in Wisconsin grew by 1.2% between September 2012 and September 2013, a little more than half the national pace of 2.1%. Wisconsin ranked 35th among the states over this period for the rate of growth in private sector jobs.
The new job creation figures come from the Quarterly Census of Employment and Wages, which economists consider the most reliable source for employment figures. The downside is that this data source is not as current as other, less reliable sources for employment figures. Read more