Wisconsin Sen. Johnson pushed tax cut amid family land deals

Nov 3, 2022, 10:15 PM | Updated: Nov 4, 2022, 12:28 pm

MILWAUKEE (AP) — Republican Sen. Ron Johnson of Wisconsin was pushing for a tax cut provision in 2017 that benefitted his former plastics company and many others as his family was acquiring properties around the country, a newspaper review of property records revealed.

The tax cut to companies called “pass-throughs” benefitted not only Johnson’s company and big donors, as had been previously reported, but it came as the senator’s family was acquiring luxury properties that could also take advantage of the law, the Milwaukee Journal Sentinel reported Friday.

There is nothing illegal about Johnson or his family members taking the deduction available to limited liability companies and other firms that pass all of their income on to their owners or investors. Companies structured this way, often small, family-owned businesses, are not subject to corporate income tax.

Johnson faces Democratic Lt. Gov. Mandela Barnes in Tuesday’s election, a race that polls have shown to be tight.

Johnson spokesman Ben Voelkel said the senator and his wife have no beneficial interest in the properties, except their Oshkosh home and the Pacur property, the plastics manufacturer Johnson used to own. Voelkel said he did not know how many of the Johnson family companies have trimmed their tax burden by using the deduction contained in then-President Donald Trump’s 2017 tax legislation.

“In the future, when anyone wonders why more good people don’t run for public office, have them study the false attacks and character assassinations used by Democrats and their allies in the media during the 2022 U.S. Senate and governor elections in Wisconsin,” Voelkel said.

The Journal Sentinel reported that Johnson’s three adult children are the beneficiaries of a family trust and are listed as managers of about 10 companies registered with the state Department of Financial Institutions.

Those companies and the family trust own about two dozen properties around the nation with assessed values of $21 million, the newspaper reported.

In 2017, Johnson held up passage of Trump’s tax bill by objecting to the plan’s already generous tax break for pass-through businesses. Originally, the Trump administration proposed allowing business owners to deduct up to 17.4% of their profits. Johnson fought to increase that to 23%. The figure ended up at 20%.

Several studies have found that the tax cut primarily helped the wealthy.

Ross Milton, an assistant professor at La Follette School of Public Affairs at the University of Wisconsin-Madison, said the pass-through provision is “still a hotly debated topic among tax policy people.”

“I think these pass-through provisions have been criticized because much of the benefit of them goes to very high income and/or high wealth households,” Milton said. “And presumably the Johnson family is a high-income household.”

After learning of the Johnson family’s extensive real estate holdings from the Journal Sentinel, Barnes campaign spokesperson Maddy McDaniel said she was not surprised.

“In his 12 years in the U.S. Senate, Ron Johnson’s priority has been delivering tax breaks for himself and his wealthy donors at the expense of working families,” McDaniel said.

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Follow the AP’s coverage of the midterm elections at https://apnews.com/hub/2022-midterm-elections and check out https://apnews.com/hub/explaining-the-elections to learn more about the issues and factors at play.

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Wisconsin Sen. Johnson pushed tax cut amid family land deals