Wisconsin's Billionaires Make a Sacrifice?

	Here's an alternative "something has to give" plan
	for Wisconsin

Commentary by Paul Jay

The Real News

February 24, 2011

http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=6323

PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News
Network. I'm Paul Jay. Something has to give, say people
backing Wisconsin's governor, Scott Walker. And that
something just has to be the wages and collective bargaining
rights of public sector workers.

Early in this epic battle, Wisconsin's Journal Sentinel's
editorial board wrote, on February 12, "Walker is right to
do this. He must insist that state workers pay a bigger
share of their benefits. And he's right to take steps to
compel them to do so. . . . Walker must fill a gaping budget
hole of $137 million for the fiscal year that ends June 30
and a much larger imbalance in the next two-year budget.
Something has to give."

The hole by 2013 is expected to be around $3.6 billion, so a
few more things are going to have to give if Governor
Walker's going to crack that nut. But, hey, everyone's going
to make a sacrifice, right? So says the Wisconsin Club for
Growth. They're the outfit that says, "our leaders must
stand up to the tax and spend mentality in Madison and work
tirelessly to cut taxes and unleash the power of the free-
market." The Club for Growth should be called the "Club for
Greed"--that's what Mike Huckabee told The New Yorker
magazine in 2007.

Here's a television ad they ran to support Governor Walker.

"All across Wisconsin, people are making sacrifices to keep
their jobs: frozen wages, pay cuts, and paying more for
health care. But state workers haven't had to sacrifice.
They pay next to nothing for their pensions and a fraction
of their health care. It's not fair! Call your state
legislator and tell them to vote for Governor Walker's
Budget Repair Bill. It's time state employees paid their
fair share, just like the rest of us".

While public sector workers failed to heed the call of the
Club for Growth, some people who benefited most from the
"unleashed power of the free-market" are making their
sacrifice.

Wisconsin retail magnate John Menard, from Eau Claire,
Wisconsin, dropped to number 51 from number 44 last year on
the Forbes list of the 400 richest Americans. Now, his net
worth did climb from $5 billion in 2009 to $5.2 billion in
2010, but imagine how he felt the day he opened Forbes and
found his rating had gone down.

Herbert V. Kohler Jr., the plumbing giant from Kohler,
Wisconsin, made an even bigger sacrifice. His net worth went
from $3 billion in '09 to only $2 billion in 2010. His
Forbes ranking fell from 97th to 182nd.

This should make Mr. Kohler's workers feel better about
accepting their latest contract that includes a two-tier pay
structure. Current workers, who make an average of $22.50 an
hour at Kohler plumbing will have their wages frozen for
five years. New workers will make $14.50 an hour.
Wisconsin's Harley-Davidson and Mercury Marine won similar
contracts. In all three cases, workers were made to
understand their choice was to accept the concessions, or
the companies would move out of Wisconsin.

No wonder, according to the Wisconsin Club for Growth, these
workers should demand that public sector workers share their
fate. It's clear the government can't threaten to leave the
state to win similar concessions, so this legislation must
be needed to make it all fair.

Unlike greedy public sector workers, joining their fellow
Wisconsinites in taking the fair share of the pain were:

- Donald Schneider of Schneider National Inc., a Green Bay
trucking company. He held his wealth at $2.5 billion, but
dropped from number 123 on Forbes' list to number 144.

- Afton, Wisconsin's Diane Hendricks, of ABC Supply Co.
Inc., saw her ranking fall from 158th to 170th. Yet she
found some solace in the fact her net worth grew by $100
million to $2.1 billion.

- Members of the Johnson family of Racine, Wisconsin, bucked
the trend, apparently, and refused to share the burden. They
were four family members at 182nd on the list and $2 billion
each. That was $50 million more and one ranking better than
they did in '09.

- Same goes for James Cargill of Birchwood, Wisconsin. His
net worth grew from $1.6 billion to $1.9 billion and a
ranking that went from 220 last year to 205 in 2010.

So, we're told there's a dire emergency to find $137 million
by June and $3.6 billion by 2013. Something has to give. But
why is it the public sector workers? I have a couple of
alternative suggestions.

Thirty million's all the governor's apparently going get out
of the concessions he's demanded from public sector workers
on their pension and health care payments, and for some
reason that's beyond me, the unions have agreed to it.

But here's a much easier way to raise the dough. Just go
back to 2008 levels of state-legislated estate taxes.
According to the Wisconsin Department of Revenue, "no state
estate tax has been collected for deaths occurring on or
after January 1, 2008."

Wisconsin picked up $158.8 million in 2008, so if that tax
were collected for 2009 and 2010, there'd be enough to fill
the short-term hole and perhaps give those workers at
Kohler, Mercury Marine, and Harley Davidson a bit of a tax
break.

Now let's get out the heavy equipment and fill that $3.6
billion hole.

In 2001, estates paid 55 percent federal tax after the first
$675,000, which was exempt. It had been that way for around
85 years. After the Bush presidency, in 2009 the rate was
down to 45 percent after $3.5 million was exempt. For the
next two years, in a deal negotiated by President Obama and
the Republicans, the rate will be 35 percent after an exempt
$5 million.

So, here's my "something has to give" plan. How about
Wisconsin passes a law that takes the estate tax level back
to 2001? In other words, the state adds 20 percent to the
current 35 percent federal tax. And let's say the first
million's tax free. The state would have to establish its
own rules on what was taxable; the federal guidelines just
create too many ways to avoid the tax.

By my math, the collective net worth of the esteemed group
on the Forbes 400 from Wisconsin mentioned above comes to
around $21.7 billion. That would make Wisconsin's share of
their estates at the time of passing around $4 billion if
you follow my plan. We just paid down the debt.

Now, while the Wisconsin Group for Growth calls for
sacrifice, I'm sure even they wouldn't expect these
billionaires to voluntarily die by 2013. But if the state
knows the money's coming in, it shouldn't be too hard to
work out the finances.

For the libertarians in the audience, consider this. If you
believe that capitalism works when it's truly the survival
of the fittest, doesn't such concentrated wealth handed down
from generation to generation defeat that objective?

The obvious other objection to my plan is that these
billionaires will take flight to parts unknown to avoid the
tax, somewhat the way they threatened to pull their
companies out of Wisconsin if workers didn't agree to the
two-tier pay structure.

But there's ways of dealing with all of this. As far as the
estate tax goes, a real federal estate tax with a proper
share going to the states would solve part of the problem.
Failing that, the state could go after fixed assets like
houses and office buildings. I'm sure if the legal brains
working in the public service set their minds to it, they
can come up with all kinds of effective measures. While
they're at it, how about a law that says if you move your
company out of the state during a labor dispute, the state
will no longer buy any of your products?

State governments, if they were really interested in the
debt and not breaking unions, could use public pressure.
Maybe even the Wisconsin Club for Growth will take out some
more ads calling on billionaires to pay their fair share.

Okay, I guess not. But why is it that the free market
demands that the rights of private wealth and corporations
must be protected, but it's okay for the government to
dictate to workers, telling them they're not free to refuse
to sell their labor, even if they don't agree with the price
or the conditions of their employment?

The point is, when something has to give, whether it's the
public debt or problems at Kohler, Mercury Marine, and
Harley Davidson, why is it acceptable that workers
sacrifice, and sacrilegious to suggest it should be the
billionaires?

End of Transcript

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