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Friday, May 25, 2012

Is Walker's Windfall Tax Credit Payback To Hendricks?

CapTimes Excerpt:
Slipped into Gov. Scott Walker's 2011-2013 budget at the last moment, the domestic production tax credit will cost the state $360 million in revenue over the next four years and some $130 million each year thereafter, according to the non-partisan Legislative Fiscal Bureau. Critics warn the impact could be even greater, a key point in a state still struggling with budget shortfalls.

The credit applies to profits derived from manufacturing or agriculture and is available both to corporations and shareholders of limited liability companies, S corporations or others who report business income on their individual tax returns.

As a result, top bracket taxpayers could see their state income tax rate fall from 7.75 percent to less than zero by 2016, when the credit fully kicks in. That's because any unused credits can be counted against other income, like stock dividends, and carried over for up to 15 years.

"It's a total giveaway to the wealthy," says Jack Norman, research director of the Institute for Wisconsin's Future, a Glendale-based watchdog group. more>>>

There was a recent report showing that Scott Walker's biggest individual donor, Diane Hendricks owned ABC Supply, paid zero state corporate taxes and while technically true, one source informed me that ABC Supply filed their taxes as an S corporation for the years 2005-2008, and therefore state taxes on profits were paid by Hendricks personally.

We also know that definitions in government administrative and legislative law are oftentimes vague. The most egregious example was back in 2004 when the Bush Administration reclassified fast food workers. Under the old classification, flipping burgers at McDonald's was considered a service job, but since 2004 it is now considered a manufacturing job. This allowed Bush and his cronies to claim they created 2.6 million new manufacturing jobs in 2004. So when it comes to the category 'manufacturing or agriculture,' it's loose enough to allow very profitable S corps with a staff of tax attorneys to further game the system for millions in tax dollars.

Only the little people pay taxes.


1 comment:

Anonymous said...

I just read that she paid ZERO state taxes after ABC reformed as a standard corporation paying its own taxes.
How does the owner and CEO of a multi-billion dollar Wisconsin company pay ZERO in state taxes for 2010?

Not only that, but ABC Supply did not pay much for the last half of 2010 compared to its revenues.
Numbers are from ABC's Tax Director, and from the State, after paying for the access to state records (!).
The zero liablity for 2010 was described as "minutiae" by the Director since taxes were paid for 2011 by Hendricks.

May 30, 2012:

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