Surplus estimates can erode quickly if there is a double-dip recession. But for debate’s sake, Gov. Scott Walker seems to have at least two major ways to allocate the surplus.
During his gubernatorial campaign, Walker pledged to repeal the higher personal income taxes enacted when Democrats were in charge. Repealing the higher taxes on families with incomes in excess of $250,000 annually would eat up much of the $300 million over two years.
Republicans slashed federal income tax rates during George W. Bush’s presidency despite getting involved in two wars. It was the first time America had gone to war and cut taxes at the same time.
Congressional Republicans made it clear during the debt debate that they are absolutely opposed to ending the lower tax rates enjoyed by the wealthy. Higher taxes on the rich would deter economic growth, Republicans stressed.
An Aug. 4 front-page article in The New York Times reported that sales are booming for such luxury items as fancy clothes and top-of-the-line automobiles. The GOP argument that the rich will drive economic recovery seemed to gain support by those numbers. The same day, the New York Stock Exchange plunged, with industrials dropping more than 500 points.
An alternative use of the anticipated Wisconsin surplus would be setting aside the money to help pay for Medicaid, the health care system for poor people. Medicaid is likely to take a major hit later this year when the 12-member bipartisan congressional committee makes recommendations to solve the federal spending mess.
Many sniffle that the poor ought to get a job and take care of themselves rather than being a burden on taxpayers. That sounds nifty, but about two-thirds of Medicaid money, according to some estimates, goes to care for the disabled and elderly who are in nursing homes.
Republicans already have staked out a position on Medicare, the health program for other elderly people. The GOP majority in the U.S. House of Representatives passed a measure to essentially privatize the program for future generations.
The case for using the $300 million to help the less fortunate perhaps is best stated in the retirement speech 28 years ago by the late state Sen. Clifford Krueger, R-Merrill, the last of the Progressives to serve in the Legislature, as he ended more than three decades of political service.
“You must remind those who want to delay the dream that human dignity is not a privilege dependent on prosperity,” he said. “It is a right upon which prosperity itself depends.”
Matt Pommer worked as reporter in Madison for 35 years. He comments on state political and policy issues.