January 17, 2013
An important key to realizing the benefits of pro-growth policies is that first, the economy expands and then tax revenues flow, not the other way around.
The concept requires repetition because as a bill to resuscitate Wisconsin’s long-dormant iron-mining industry is being drafted, some legislators are scheming to tax prospective mining operations before they generate any proceeds.
The ploy is to levy taxes before any ore is produced and use the proceeds to train union workers—for the mining jobs whose creation the tax will most likely prevent. The “reasoning,” to use an excessively charitable word, is that the mines will become union shops because operators won’t want to spend money on training if they’ve already paid taxes for it.
Other misguided legislators are angling to replace the current tax on net mining proceeds with a gross tonnage tax, imagining this will benefit mining companies. It might, if the economy was roaring and demand was high. With today’s sluggish economy and thin profits, it makes the mere thought of launching an enterprise look foolhardy.
Back in November, a two-house Republican majority looked like a guarantee of legislative success. Now, it’s easier to understand why Governor Walker has narrowed his sights to avoid distracting from his job-creating agenda.