Following the Money: Investigation Shows How Ron Johnson Secured a Giant Tax Break for Mega GOP Donors

By playing hard-to-get, the Wisconsin senator allowed more tax cuts to be based on wealth rather than job creation, as Trump had claimed.

An investigation of correspondence, calendars, and tax records has shown how Wisconsin Republican Sen. Ron Johnson used hardball tactics to make Republicans’ 2017 tax legislation even more enriching to the already rich and less dependent on job creation.

ProPublica, a nonprofit newsroom that investigates abuses of power, published an exhaustive report Tuesday as part of its ongoing investigation into a vast trove of Internal Revenue Service tax data it obtained this year. The new report centered on former President Donald Trump’s signature legislative achievement and how actions by Johnson and others belied Trump’s promise that the tax cuts would benefit the middle class and not increase the budget deficit.

The ProPublica story begins with Johnson surprising fellow GOP senators by saying he would not vote for the bill until it increased the tax cut for pass-through companies—a type of business that doesn’t pay corporate taxes because the profits pass through directly to the owners, who then pay individual taxes.

While Johnson claimed his motivation was to help small businesses, the lack of any income cap meant the largest chunk of dollars went to the wealthiest 1% of such owners. 

As examples, ProPublica looked at the benefits going to Republican mega-donors to Wisconsin campaigns: Dick and Liz Uihlein, owners of Kenosha County-based Uline, and Wisconsin’s richest woman, Diane Hendricks, owner of Beloit-based ABC Supply Co. Between them, ProPublica says they donated about $20 million to causes that helped Johnson’s 2016 re-election effort against former Sen. Russ Feingold. The report used 2018 income figures to report that Hendricks and the Uihleins could benefit personally in the range of a half-billion dollars over the eight-year life of the tax break.

Johnson also led an effort to extend tax favors to real estate developers who originally weren’t in line for large tax cuts because they don’t hire many employees. New language was added to give the break to developers who have a lot of buildings, not necessarily a lot of workers.

Even when the bill originally passed, Johnson was criticized for the pass-through favor since he was co-owner of such a company that he later sold.