With eight months remaining before Wisconsin chooses its next governor, it's important for candidates to define where they stand on jobs. Last week, I wrote about Scott Walker's pro-jobs agenda. I noted that Walker's main focus was reducing taxes for small businesses. Walker says that tax cuts are the fastest and most effective way to create and sustain jobs. And economists agree.
According to Harvard economist Gregory Mankiw, tax cuts for businesses increases consumer demand for goods and services. And when consumer demand goes up, an increase in supply shortly follows. This requires employers to hire more workers in order to sustain supply levels.
In my article, I also noted that Tom Barrett's platform on taxes was not that clear. Since his gubernatorial announcement only a few months ago, he has yet to state how he intends to promote a pro-job environment. His only definitive statement on taxes thus far is that families and businesses are complaining about tax increases, and they want them to stop. But is Barrett the best candidate to stop tax increases for families and businesses?
Barrett's vote in 1991, to increase Wisconsin taxes by 856 million, occurred during an economic recession with unemployment peaking at 7.8%. This paints a clear picture about Barrett's loyalty to a tax and spend philosophy. Regardless of the financial hard-times Wisconsin was experiencing, his ideological zeal paved the way for a substantial tax increase. Given the current recession with unemployment teetering at 10%, can we trust that Barrett will not follow his ideological zeal once again?
The 90s wasn't Barrett's most notable years. His Congressional career can be summed up as follow-the-leader politics with some party-line voting. In fact, Ontheissues.org, a website devoted to evaluating the politics of Congress, registered Tom Barrett as a "Hard-Core Liberal". They assessed Barrett's voting record on partial-birth abortion, entitlement spending, and on tax increases, and they scored him in the top 80th percentile of Congressional liberals. Granted, Barrett did not achieve the top 90th percentile as Senator Feingold, but he's far enough left to demonstrate that he doesn't represent most Wisconsinites. (Below to the left is a graph depicting where he is in the political spectrum.)
Following a chronology, Congressman Barrett voted against tax cuts for small businesses in March of 2000.
In April of 2001, Barrett voted against repealing the Death Tax, which essentially penalizes descendants after receiving property from a deceased relative.
In May of 2001, Barrett voted against the Economic Growth and Tax Relief Reconciliation Act (AKA "the Bush Tax Cuts). This bill significantly lowered the marginal tax rates on all American taxpayers while providing single parents with a $500 tax rebate and a $600 tax rebate for married couples. Among the most important provisions of the bill is the reduction of the Capital Gains tax, which incentivized small businesses to invest and grow.
In October of 2001, just three months later, Congressman Barrett again opposed providing businesses tax relief on their capital gains. Mind you, this was just a month after the 9/11 terrorist attacks, an event that deepened an eight-month recession.
When Tom Barrett ran for governor in 2002, he sought to separate himself on tax issues from Democrat opponents. Kathleen Falk, at the time, proposed plugging a $2.2 billion budget hole with an 85 cent per pack tax increase on cigarettes. Jim Doyle stated it wasn't the taxpayer's fault that they had such a big deficit. And so he claimed, ironically, that he was the only Democrat to stand up for Wisconsin by protecting taxpayers from tax increases. Tom Barrett, on the other hand, proposed removing "tax exemptions of various kinds" as a way to stop a bloating deficit. And although he wouldn't specify which exemptions he would remove or how many, it is fair to say that the removal of tax exemptions on exempted parties is just another way of increasing taxes.
Due to a national recession and bad fiscal policy, Wisconsin has a substantial budget deficit of nearly $6 billion. This leaves government officials to ponder which solutions are the best for debt reduction.
There are two primary ways to reduce deficits; you can raise taxes or you can reduce entitlement spending. For the "hard core liberal", reducing entitlement spending is not usually the first option, which leaves us with tax increases. But tax increases are not popular. So in order to make them more palatable to the masses, liberals front-load them onto the backs of the top income earners and small businesses. And since these two groups represent only a small fraction of the voting bloc, liberal politicians have less to worry about than say pissing off the middle class.
Barrett's history of spending, taxing, and refusing to incentivize small businesses is disconcerting. He has already raised taxes during the recession of 91, and he refused to provide tax relief to working families and small businesses at least four times within an eight-month recessionary period in 2001. Why, if Barrett is elected governor, should we expect anything less than tax increases and refused economic relief for today's recession?