Wisconsin’s New Millionaires
A couple of industry-backed studies that have come out over the two months cast Wisconsin in a positive light – as a place to do business and make money. As we discussed in a blog post on April 27, a study by Ernst and Young, in conjunction with the Council on State Taxation, ranked Wisconsin as having the 4th lowest state and local taxes on investments made in a new facility or for upgrading an existing facility.
A more recent study contains data estimating the percentage increase in millionaires over the next decade in each state, and it projects that growth to be 12th highest in Wisconsin. According to the industry-sponsored analysis, Wisconsin’s increase is supposed to be 131%, well above the national average of 110%.
The Oregon Center for Public Policy posted an interesting and informative commentary on the study’s findings and their implications for the public policy choices facing that state. Unlike Wisconsin, Oregon doesn’t have a broad tax break for capital gains income, but it nonetheless ranks second-highest in the study’s estimate of the growth rate of millionaires. Notwithstanding that distinction, “Wisconsin” could be substituted for “Oregon” in most of the commentary.
Of course, one could question whether being in the top quarter of states for growth in millionaires is necessarily a good thing. (What are the implications for the growth in income inequality?) And one can raise questions about whether the study’s methodology and its conclusion are any more valid than those of a number of very questionable analyses of states’ business “climate.”
Nevertheless, both studies legitimately challenge the misguided impression some people have that our state isn’t a good place in which to do business. And they raise serious questions about the wisdom of approving the budget bill’s cuts in corporate taxes and in the capital gains tax – when WI is one of only nine states that provide a broad capital gains exclusion.
Another Budget Project Blog post today takes a thorough look at the policy considerations relating to the last minute amendment for a $129 million tax cut for manufacturers.