Adding to the Deficit -- Through Subtraction

According to the newest Wisconsin Budget Project blog post, the Joint Finance Committee seemed geniunely committed to addressing the structural deficit (at least on the spending side), until it created a last-minute tax break for manufacturers. This move will nearly eliminates the income tax for many corporations that produce goods in the state.

Here's an excerpt:

Some politicians and pundits seem to think that structural deficits can always be attributed to phased-in spending increases or short-term budget-balancing measures (such as “raiding” other funds or restructuring bonds). They overlook the fact that delayed or phased in tax cuts can also produce or add to structural deficits.

The short-term political expediency that sometimes leads lawmakers to approve deferred spending increases that they cannot currently afford can also induce them to approve tax cuts that are now unaffordable, and the effects on the structural deficit can be the same.

Read the newest Budget Project blog post for more.