Wisconsin is a national leader in tax handouts to business

In 2009, the company that ran Mercury Marine’s Fond du Lac plant put a gun to the head of its workers: Either agree to wage givebacks, they warned, or we’ll move your jobs to our plant in Stillwater, Okla.

The drama soon involved Gov. Jim Doyle, who was bashed for not being pro-business enough to prevent the company’s move. The criticism extended to Wisconsin’s tax structure. As Rep. Bob Ziegelbauer, the independent from Manitowoc, declared, for companies like Mercury Marine, “the higher tax burden they now find in Wisconsin is a powerful incentive to look elsewhere.”

In fact, the company’s “burden” could hardly have been lighter. As a study by the liberal Institute for Wisconsin’s Future later found, Mercury Marine’s parent company Brunswick had paid not one dollar in Wisconsin corporate income taxes in the eight previous years, though its total profits over that period were $1.1 billion.

Nor was this uncommon. A previous study by the IWF, checking net taxes paid (which are public records in Wisconsin), had found a majority of large companies here consistently paid zero in state corporate income taxes.

For that matter, Brunswick was doing pretty good on labor costs. As a letter to stockholders from chairman and CEO Dunstan E. McCoy (quoted by IWF) noted: “Our employees significantly contributed to our cash position through salary actions, periodic unpaid furloughs, and other measures which directly affected their pay and benefits.”

The company had already signed a contract, in 2008, with the union representing Mercury Marine workers that ran through 2012. Now, one year later, the company wanted to further lower its labor costs.

Led by conservative talk radio, the pressure on the union and on Doyle to play ball with Mercury Marine was enormous. The result was complete capitulation.

The union, which had overwhelmingly rejected the company’s demands, did an about-face and agreed to a seven-year pay freeze and reduced health care coverage for employees. Doyle and the state gave the company a generous package worth $70 million. Fond du Lac County provided a $50 million loan, paid for by a new 0.5% county sales tax, and the city of Fond du Lac threw in another $3 million in financial aid.