Tax breaks won’t increase demand!

Scott Walker now must take the next step…

By Jack E. Lohman

Governor Walker is right. Reducing or eliminating corporate taxes is a good idea, at least for those that employ Wisconsin workers.

But in return for low/no taxes we expect jobs, and while increased profit makes room to give more people jobs, more people won’t be needed if we don’t also increase demand for their products. So we could end up driving up profits but not adding any jobs.

That’s called a “jobless recovery.” Not a very fun game. And taking money from lower-wage taxpayers without adding jobs is a pure corporate giveaway.

Not to worry, I’m sure the R’s have this thing figured out.

But seriously, Walker could have simply passed a single-payer healthcare system that would have removed health care costs from ALL Wisconsin employers that “kept or created” jobs in the state, and incidentally extended health care to ALL Wisconsin residents!

So instead of funding tax breaks, we taxpayers would fund health care!

For the record the jobs we once had are now in India and China because their wage levels are 1/10th ours. They are likely gone forever. Going back and undoing NAFTA and other trade laws might help, as would those countries raising their wages by ten or fifteen times, but neither is going to happen.

Yes, providing an incentive to businesses to encourage research and development is key, but only if they are required to manufacture their new-found product in Wisconsin. Not like solar panels that were created in the U.S. but manufacturing was then sent to China. It’s their lower wages, don’cha know?

We need a policy that is going to last, and Walker could make that happen. Wisconsin should create a new “compliant” corporate structure that provides BOTH zero taxes AND free health care to all employees for those companies that use Wisconsin workers. These are passed on to the consumers anyway, so why not totally eliminate them and make our corporations more competitive with foreign companies?

Of course, they say things have to get worse before they get better, and I have a hard time criticizing a governor who has set out to make things worse. 🙂

2 Responses to Tax breaks won’t increase demand!

  1. Here is an important list (from Colorado) of the benefits of eliminating taxes for corporations, but even more so, states would benefit by eliminating corporate health care costs by implementing a single-payer health care system.

    It would obviously be easier to stomach if Walker was not taking cash dollars from the corporations who would benefit.

  2. When I retired in 2004 I sold my company to a national competitor. I had 70 employees in four states. They kept all four offices open for three years, but then consolidated all operations in New Jersey and laid off 60 employees. Had Wisconsin had zero corporate taxes I suspect (but can’t prove) that they would have consolidated in Wisconsin instead… bringing employees in rather than laying employees off.

    Zero corporate taxes is hard to accept when CEOs are walking away with millions, and we surely need to put a stop to that. But as long as our politicians get a piece of the booty that will continue.

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