Colorado loves the EITC working-class tax credit, and now, after Trump whooping, so does Wisconsin’s Scott Walker
Amid the political tumult of the first weeks of the Trump presidency, there are signs that the political status quo in the country really might be shifting, on the right and the left.
What’s going on in Wisconsin?
Republican Gov. Scott Walker has made a name for himself for running the state according to anti-tax supply-side conservative ideology – the kind of governing program the libertarian Koch brothers promote and pay for – as they have in Wisconsin.
Tax breaks for the working poor weren’t part of the program.
But news came Thursday that Walker is “reversing course” in Wisconsin on the Earned Income Tax Credit. The Milwaukee Journal Sentinel reports that Walker on Friday will announce plans to “raise incomes for more than 130,000 state families by returning the more than $20 million a year he cut from the program in 2011.”
More:
The proposal could mark a return by conservatives to a tax policy that they had once championed but often criticized in recent years.
The credit is meant to encourage low-wage employees for working by increasing their wages. Though 25% of the EITC decreases income taxes for low-wage workers, the majority of it goes to increase the income of workers who don’t owe income taxes.
In 2011, Walker and GOP lawmakers cut the credit… At the time, Republicans said that the state’s credit was unusually large for families with several children and objected to it largely going to people who owed no income taxes. Advocates for the needy said it was a tax increase on those who could least afford it.
Wisconsin had been a reliable state for Democratic presidential candidates in recent election cycles but last year the state went to Trump. It was one of a set of struggling Midwestern states that delivered his electoral college victory. Analysts said that white working class voters, spurred by the “economic anxiety” of the globalized, outsourced, information era, were won over to the unorthodox Republican candidate in large part because of the nationalist trade protectionism he was touting as a remedy to collapsed rust belt manufacturing.
“It’s going to be America First, America First,” Trump said in an inauguration speech aimed at those kinds of supporters. “You’ll never be ignored again.”
Walker apparently got the message.
Where the Earned Income Tax Credit is concerned, at least, it’s a message the Colorado Fiscal Institute has been pushing in the Centennial state for years.
After a 15-year break, Colorado in 2016 re-instituted its state EITC. The Colorado Fiscal Institute played a large part in bringing the change.
On Thursday, CFI spokesman Tim Hoover said he was glad to see change come in Wisconsin, too.
“We’re glad to see Gov. Walker recognize the value of a policy that politicians from both parties, going back to Richard Nixon and including Ronald Reagan, have supported as an excellent way to reward hard work and boost the economy,” he wrote in an email. “Since conservative economist Milton Friedman first envisioned what he called the ‘negative income tax,’ people across the political spectrum have embraced the Earned Income Tax Credit as one of the best anti-poverty devices ever conceived.
“It helps more than 350,000 Colorado families stretch their paychecks to buy groceries, gas and clothing or pay the rent and utilities. That includes 39,000 military families in our state.”