Kochonomics in Wisconsin and North Carolina

Source: Anna Chu, Center for American Progress Action Fund, September 2014

From the summary:
…This report focuses on how Kochonomics is playing out in two states: Wisconsin and North Carolina. We chose these states for several reasons. First, the Koch brothers have a direct financial interest in these states, given that they own several subsidiaries operating in both North Carolina and Wisconsin. Second, conservative leaders have assumed much of the elected political leadership in these states and have put in place policies that have benefited a wealthy few with little to no regard for the effects on average taxpayers. Lastly, we chose Wisconsin and North Carolina because the Koch network selected them as targets for their conservative philosophy. In 2012, David Koch admitted that, “We’ve spent a lot of money in Wisconsin. We’re going to spend more.” Tim Phillips, the head of the Koch-backed issue advocacy group Americans for Prosperity, or AFP, called North Carolina a “model state” for its activities. “A few years ago, the idea we had was to create model states,” said Phillips. “North Carolina was a great opportunity to do that—more so than any other state in the region. If you could turn around a state like that, you could get real reform.” Indeed, Phillips admitted that North Carolina “was one of the states we were most active” in pushing its conservative agenda.

We divide this report into three sections. The first lays out the financial stake Koch Industries has in Wisconsin and North Carolina and how public policies in these two states would affect the Koch’s bottom line.

The second section looks at how the Koch network has funded state leaders in Wisconsin and North Carolina who can and have put in place policies that benefit the wealthy few, including the Koch brothers, regardless of the effect such policies have on everyone else. We focus on two ardent followers of Kochonomics—Wisconsin Gov. Scott Walker (R) and North Carolina Speaker of the House Thom Tillis (R). Both Walker and Tillis have received large campaign contributions from Koch Industries in their respective states. The Koch network is also helping Walker and Tillis in their 2014 election campaigns: Walker is running for re-election as governor and Tillis is vying for a U.S. Senate seat representing North Carolina in one of the most competitive races in the country.

The third and final section of the report looks at the various effects that Kochonomics has had on both Wisconsin and North Carolina. In general, we show that the conservative policies put into place by Koch-supported lawmakers have benefited the wealthy few. In general, we show that the conservative policies put into place by Koch-supported lawmakers have benefited the wealthy few. Specifically, we focus on the issue of tax and find that:
∙ In Wisconsin, the Koch network aggressively pushed for tax cuts that heavily favor millionaires, billionaires, and big corporations. One of the resulting benefits to the Kochs is that they could see their income tax rate on the manufacturing activities of Koch Industries subsidiaries in Wisconsin drop to as low as 0.15 percent. Conversely, over the past four years, Wisconsin’s working and low-income families have had to pay $170 million more in additional taxes.
∙ In North Carolina, the Koch-backed Americans for Prosperity advocated for—and state lawmakers passed—tax cuts for the wealthiest 1 percent by an average of more than $10,000 annually, while working families making between $52,000 and $84,000 per year would actually have to pay an average of $74 more in taxes. Moreover, state lawmakers eliminated local business taxes, further reducing the taxes of Koch subsidiaries in North Carolina. …