Scott Walker in so many words: "Corporate taxes are too low!" Oh, wait. Only in the case of Trek Bicycle. | WisCommunity

Scott Walker in so many words: "Corporate taxes are too low!" Oh, wait. Only in the case of Trek Bicycle.

Apply a little bit of logic to his recent attacks on gubernatorial challenger Mary Burke, and it seems that -- if you actually believe his rhetoric -- Gov. Scott Walker favors raising taxes on businesses. No, you're not dreaming. It's just Walker being wildly inconsistent and hypocritical for political gain.

Never mind that throughout his political career, Walker's big push has been to lower business taxes. Now, suddenly, in the case of Wisconsin's homegrown and highly successful Trek Bicycle Corp., which Burke's family started up, Walker and his minions are suggesting that the firm isn't paying ENOUGH in taxes. It's all explained in today's "No Quarter" column by Dan Bice in the Milwaukee Journal Sentinel (link below).

[Full disclosure: I own a Trek bike, solid as the day it was built, decades ago in Wisconsin.]

Of course, Walker hasn't really changed his mind on reducing corporate taxes, any more than when, in a previous attack on Burke, he recently appeared to reverse his support for companies that choose to outsource jobs from Wisconsin. Team Walker is trying to paint Burke as a tax-dodging, corporate executive who outsources Wisconsin jobs. None of which is true, either wholly or in the specifics that Walker ignores. But, hey! It's an election year! Free speech!

Bice's column begins by noting that Walker "has attacked Democratic gubernatorial candidate Mary Burke and her family's bicycling business because it hasn't paid corporate income taxes to Wisconsin in decades." Bice adds: "Trek Bicycle Corp. is a tax-dodger, much to Burke's personal benefit, according to the GOP governor."

Actually, the way Trek arranges its affairs is legal under a commonly used provision of federal tax law -- which Walker heretofore has been content to ignore in all his tax-cutting fervor. For better or worse, up to 90 percent of the Wisconsin corporations use this provision of the IRS tax code, according to one estimate. You and I may think the law is too soft on corporatiions, but until Mary Burke came along, Walker was 100 percent silent on this expression of that.

Bice explains that, like many other businesses, so-called "S" corporations like Trek favor this provision because it avoids so-called double taxation, where first the company pays corporate taxes on its profits and then the owners pay individual income taxes on the stock dividends they are awarded. Under an "S" corporation, the tax liability falls entirely on the individual owners.

What Walker avoids saying is that, being among the owners of the highly successful, profitable and sizable Trek corporation, Mary Burke and her family nevertheless have paid a lot of taxes. Bice: "Records show Burke, her mother and three siblings living in Wisconsin paid a total of $1.77 million in personal income taxes in 2012."

If he follows the format of what he said after his Burke outsourcing attack blew up on him, Walker soon will say that he's not attacking that wonderful, venerable Trek bike firm, but is just pointing out how Burke is not paying her fair share of taxes, or some such nonsense. Because so far, his attacks on Burke's business dealings have amounted to coarsely chopped word salad.

If Walker really and truly doesn't like the "S" corporation tax arrangement, then you'd expect he'd have before now engaged in an overall critique of that tax code feature, urging his party at the national level to shift gears and rewrite the code. Instead, the tax issue involving "S" corporations is for Walker apparently not at issue  -- unless the "S" corporation in question happens to be owned in part by an individual who's running against Walker for public office. Then, suddenly, it's portrayed as a scandal or a scam. Meanwhile, what about Walker-friendly business owners who use the same tax-accounting method? Are they, too, "tax dodgers"? Nope! No problem, there!

For Walker, selective silence on "S" corporations is vital, since his political base is heavy on businesses including such corporations that likely wouldn't take kindly to such a change in his views. So, once again, what this boils down to is: It's Okay, But Only If You're Republican.

Ah well, just another rhetorical S-curve from the man who's a master of crooked politicking. This is a guy who's perfectly comfy holding two simultaneous and completely contradictory political positions. And most people -- especially those who support him -- don't seem to notice the rank hypocrisy.


August 3, 2014 - 12:19pm