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The tax code was fundamentally changed in the last few decades in ways favoring wealthy and high-income households. The top marginal tax rate has fallen from 70 percent during the 1970s, to just 20 percent after the “fiscal cliff” deal earlier this year. Additionally, loopholes in the tax code for big corporations result in historically low levels of revenue. Reforming the tax code to close corporate loopholes and ending tax breaks for the wealthy would raise revenue that could be used to fund job-creating investments in Wisconsin to produce 76,956 jobs.
By pairing job creation policies – which are temporary – with permanent tax changes, deficits would be reduced substantially over the medium and long term (which is what really matters).
The Congressional Progressive Caucus’s Back to Work Budget includes a number of tax policies that raise revenue while imposing only a minimal drag on the economy in the near term. And if the money raised through these policies were recycled into job-creating investments, the result would be a huge boost to jobs.
This analysis examines the impact of three such policies that could be implemented to raise revenue to support job creation in Wisconsin through 2016
1 - Enact the Fairness in Taxation Act of 2013: 34,739 Jobs Created in Wisconsin through 2016
2 - Close Corporate Loopholes: 5,631 Jobs Created in Wisconsin through 2016
3 - Adopt Financial Transactions Tax (FTT): 36,586 Jobs Created in Wisconsin through 2016
Pairing tax fairness reforms with job creation investment accomplishes two goals: It reduces inequality by ensuring progressivity in the tax code, and it makes everyone better off by creating jobs and expanding economic activity. This is exactly what the state needs as Wisconsinites continue to get back on their feet in the aftermath of the Great Recession. If we close tax loopholes that benefit corporations and the wealthy, we can be fiscally responsible and protect the middle class by creating jobs right now.
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