Who Does Not Pay Taxes?
Who does not pay taxes? Some large and profitable state banks, for starters.
Associated Bank, the biggest and most profitable bank based in Wisconsin, made $2.6 billion in pre-tax profits from 2001 through 2008. Yet the bank paid no state income tax during that period. Likewise, M&I Bank paid less than one percent of its pretax profit in income tax, and that amount will likely go down to zero based on changes made in the2011-13 biennial budget.
This information and more comes from a new newsletter from the Institute for Wisconsin’s Future (IWF), a non-profit, non-partisan statewide organization dedicated to tax policy research, community organizing and education policy. This is the first issue in a series of monthly newsletters by IWF that identify companies that pay little or nothing in taxes.
Here’s how IWF explains how the budget helps businesses like M&I Bank, which had a loss in 2008, avoid state income tax:
“Under the old law, companies can use losses from 2008 to offset profits in the future. But the new budget adds a loophole for big firms like M&I. Under the old law, the loss in 2008 at the bank, M&I Marshall & Ilsley Bank, could offset future profits only at the bank, not at sister subsidiaries in the M&I corporate family. The new law, though, lets the 2008 loss at the bank be used to offset profits at any member of the corporate family.”
Given the fact that some companies pay little or no income tax in Wisconsin, it seems strange that the Legislature is working to help companies pay even less. The budget all but phases out the corporate income tax for manufacturers and agricultural businesses in Wisconsin, decreasing the rate from 7.9% of profits to 0.4% over ten years. (See more about that in a June 10th Budget Project Blog post.)