Economists: Blast proposed Michels tax plan

MILWAUKEE — A national team of more than two dozen economists lambasted Tim Michels’ proposed tax plan at a news conference in Milwaukee today.

“Do the flat tax math: moving from a graduated income tax to a common or “flat” tax rate requires EITHER lower taxes for the wealthy funded by higher taxes for the middle class OR a lower common flat tax rate and huge cuts for the public sector,” said Dr. William Holahan, professor emeritus of economics at the University of Wisconsin in Milwaukee. it is, Mr. Michels?Inquisitive voters want and deserve to know.

Dr. Holahan was joined by Luz Sosa from the Milwaukee Area Technical College School of Economics, Dr. Jeffrey Sommers from UWM and Dr. Michael Rosen, retired from MATC, at the event.

“The idea that cutting taxes on the wealthy leads to increased investment, job growth and prosperity has been proven demonstrably wrong for more than four decades, most recently in Kansas,” said the Dr. Sommers, Professor of Political Economy and Public Policy, Senior Fellow at the Institute of Global Affairs, University of Wisconsin-Milwaukee. “Michel’s flat-rate income tax will achieve the same results, a windfall for the wealthy and an increased tax burden for the middle class. Abkhazia, Bosnia and Herzegovina, Bulgaria, Belarus, Uzbekistan and Transnistria have tried flat taxes. Predictably, the wealthy got much richer, even as their economies stagnated.

“What a ‘flat tax’ does in Wisconsin is that the wealthiest residents of the state don’t pay taxes,” said Laura Dresser, associate director, Center on Wisconsin Strategy, University of Wisconsin-Madison. “The state does not need a policy that redistributes wealth along the income chain.”

Economists released an open letter about the plan, signed by more than two dozen economists across the country, and shared charts outlining the effect of the Michels tax plan. (attched.)

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