Republicans push for a “fair share” of taxes from low-income workers while defending a tax break that paid off handsomely for billionaire donors.
Wisconsin Sen. Ron Johnson continues to face blowback for recent statements expressing support for a Republican plan that would raise taxes on one-third of all Wisconsinites and open the door to end Medicare and Social Security benefits for more than 1 million Wisconsin residents.
“Ron Johnson seems proud of his goal of soaking the middle class in order to enrich the already wealthy,” said Ben Wikler, chair of the Wisconsin Democratic Party. “And that plan seems to reflect the plans of a lot of Republican politicians if in fact they get power.”
In a March interview with Breitbart News Daily, Johnson was asked about Florida Sen. Rick Scott’s 60-page, 11-point plan for America. Johnson said that he agreed with “most of” Scott’s plan and described it as a “positive thing.”
Scott’s plan says, among other things, that “All Americans should pay some income tax to have skin in the game, even if a small amount.” In other words, this would mean raising taxes on the poorest Wisconsinites—an idea Wikler and other Democrats firmly oppose.
“When Republicans claim that working Wisconsinites aren’t paying their fair share of taxes, they’re ignoring the fact that people are paying into Social Security, they’re paying into Medicare, they’re paying property taxes, they’re paying sales taxes,” Wikler said. “There are a ton of taxes that regular, working Wisconsinites pay.”
In fact, under Wisconsin’s current tax system, the top 20% of earners already pay less as a share of their income than the bottom 80%, according to another analysis by ITEP.
For example, the top 1% of households, earning $512,600 or more annually, pay an average of 7.7% of their income in taxes, according to ITEP. The bottom 80% pays between 10.1% and 10.6% of their household income.
Scott’s plan would also “sunset” all federal legislation in five years, requiring Congress to re-authorize every federal law, including those governing Medicare and Social Security, which could end with Republicans—who have long sought to undermine the programs—ending Social Security for 1.3 million Wisconsinites and Medicare for 1.2 million state residents. Scott’s proposal could also lead to the end of the Affordable Care Act and Medicaid—both of which Republicans have also been aggressively against.
Scott has faced searing criticism for his plan from all sides, including many Republicans. But not Johnson.
“When you start talking about taxation, if you cut taxes for everybody, everybody gets a tax break,” Johnson said on Monday. “And people that make more money get more dollars cut but that’s our tax system.”
Johnson previously issued a similar defense earlier this month.
“Now, did my business benefit? Sure,” Johnson told Republican activists . “Did some of my donor businesses? Sure. When you give tax relief to everybody, everybody benefits.”
The top 1% in Wisconsin, who earned an average $1.46 million in 2020, received nearly $40,000 in tax breaks because of the Johnson-supported tax cuts. Those who earned an average of $55,000, however, only received tax cuts of $790, while the poorest 40% of Wisconsinites saw less than $400 in tax savings, according to an analysis from the Institute for Taxation and Economic Policy (ITEP).
Darin Von Ruden of the Wisconsin Farmers Union believes such tax disparities are a slap in the face to working-class Wisconsinites, especially at a time when costs are rising.
“With the current economy the way it is, a lot of people are just struggling to put food on the table and keep their houses heated,” Von Ruden said. “And the bigger question I think a lot of people will be asking is, ‘Okay, if we’re supposed to pay our fair share, why aren’t the ultra rich paying too?’ Right now the middle class is paying way too much in taxes compared to what the ultra rich are.”
Johnson, who initially opposed the 2017 tax cut, became a supporter after he convinced Republican legislators and former President Donald Trump to include a tax break for pass-through businesses that don’t pay corporate income tax but are instead taxed on the personal income of their owners.
Why was that specific tax break so important to Johnson? A 2021 analysis from ProPublica provides one possible answer: two of the three biggest beneficiaries of Johnson’s measure were Wisconsinites Dick and Liz Uihlein of Pleasant Prairie-based packaging company Uline and Diane Hendricks of Beloit-based ABC Supply Co. The Uihleins and Hendricks collectively donated roughly $20 million to organizations backing Johnson during his 2016 re-election campaign.
Thanks to Johnson’s efforts, the Uihleins and Hendricks saved more than $79 million in 2018. ProPublica noted, “at that rate, the cut could deliver more than half a billion in tax savings for Hendricks and the Uihleins over its eight-year life.”
The Uihleins have already rewarded Johnson for his efforts, donating $280,000 to his campaign fund in the first quarter of 2022, according to a recent campaign finance filing. Hendricks, meanwhile, donated more than $250,000 to the National Republican Senatorial Committee (NRSC), which is chaired by Rick Scott and uses that money to re-elect Republicans like Johnson.
Johnson, whose finances have doubled since he entered the Senate in 2011 and is estimated to be worth nearly $40 million, has yet to say how much he and his company personally saved because of his ‘yes’ vote for the 2017 Trump tax cuts. He’s also failed to explain why he only paid only $2,105 in state income taxes in 2017, despite earning more than $450,000–a fact that rubs Wikler the wrong way.
“Republicans are finding ways to sneak out of paying even the most basic tax obligations,” Wikler said. “They’re often paying a tiny amount—a few thousand dollars in Ron Johnson’s case, in state income taxes, even though he had an income larger than the vast majority of Wisconsinites.”
Even though he’s already profited handsomely from his position in the Senate, Johnson still seems to support the Rick Scott tax plan–one that would almost certainly leave his wealth untouched but potentially devastate millions of ordinary Wisconsinites.
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