Wisconsin is digging a monstrous hole from which it may never recover. There have been a huge number of bills passed using stealth legislative techniques. The Manufacturing & Agriculture Credit is a good example. Over 4 years it gradually ELIMINATES income tax on manufacturing and agricultural income. Estimated cost to the taxpayer goes from $80 million in first year (2013) to $285 million by 2016. Unfortunately, this is among the many changes the citizens of Wisconsin are not aware of.
Coincidently, or not, the UW System is being cut by $300 million.
The language for this credit excludes "(2) income from producing, transmitting, or distributing electricity, natural gas, or potable water". Interesting that it doesn't exclude oil or coal related profits. Of course Wisconsin has a LOT of paper related manufacturing. Could this help the Koch Brothers?
This from Think Progress via Forbes article:
Koch owns a coal company subsidiary with facilities in Green Bay, Manitowoc, Ashland and Sheboygan; six timber plants throughout the state; and a large network of pipelines in Wisconsin. While Koch controls much of the infrastructure in the state, they have laid off workers to boost profits. At a time when Koch Industries owners David and Charles Koch awarded themselves an extra $11 billion of income from the company, Koch slashed jobs at their Green Bay plant:
Officials at Georgia-Pacific said the company is laying off 158 workers at its Day Street plant because out-of-date equipment at the facility is being replaced with newer, more-efficient equipment. The company said much of the new, papermaking equipment will be automated. [...] Malach tells FOX 11 that the layoffs are not because of a drop in demand. In fact, Malach said demand is high for the bath tissue and napkins manufactured at the plant
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Read more:
Koch Brothers Behind Wisconsin Effort To Kill Public Unions
The estimated fiscal impact:
The actual amount of credits claimed and used in tax year 2013 (the first year in which the credit is available) will not be known until 2016. The credit is estimated to reduce state tax revenues by $79.9 million in 2013-14, $151.5 million in 2014-15, $224.6 million in 2015-16, and $284.5 million in 2016-17 once the credit has been fully phased in.
From WI Legislative Fiscal Bureau – see pages 2 & 3
“CREDIT COMPUTATION
The credit is a percentage of "eligible qualified production activities income." The credit is calculated by multiplying eligible qualified production activities income by one of the following percentages.
• For taxable years beginning after December 31, 2012, and before January 1, 2014, 1.875 percent
• For taxable years beginning after December 31, 2013, and before January 1, 2015, 3.75 percent
• For taxable years beginning after December 31, 2014, and before January 1, 2016, 5.526 percent
• For taxable years beginning after December 31, 2015, 7.5 percent”
From:
Wis Dept of Revenue Mfg & Agri credit instruction