China Trade Set to Be Major Issue in Wisconsin’s 2012 Senate Race

As the race for Wisconsin's open U.S. Senate seat heats up, China has taken the spotlight. Republican candidate Eric Hovde has launched an ad blaming the outsourcing of U.S. jobs on the corporate tax rate.

The ad appears to be in response to Democratic candidate Tammy Baldwin's recent ad on China. Baldwin slams China, for violating trade rules by dumping paper on the U.S. market and harming the Wisconsin paper industry, which employs some 50,000 workers.

While the United States may have a higher tax rate than some countries, corporations aren't paying it. According to the Wisconsin Department of Revenue, two-thirds of corporations in the state (66.5 percent, PDF p.12) don't pay Wisconsin taxes at all. Similarly, the Wall Street Journal reports that over two-thirds (69 percent) of U.S. corporations are structured to avoid paying federal corporate income tax.

According to the Alliance for American Manufacturing, some 57,000 Wisconsin workers in a variety of industries have already lost their jobs to the China trade deal which passed Congress in 2000. That pact encourages Wisconsin companies to move to China for cheap labor or proximity to China's huge consumer market. Johnson Controls just announced that it was building a car battery plant there.

But Hovde wants to blame the tax rate, because he doesn't want to blame trade deals beloved by Wall Street firms who make a fortune when labor costs are offshored, and he certainly doesn't want to blame China. "You want to see capitalism and free markets? Go there [to China] right now, they are more free market that we have been," he said at a recent talk.

While Hovde, a hedge-fund manager by trade, is willing to expound on unsubstantiated theories about the exportation of U.S. jobs, he is not willing to release required financial disclosure statements that all candidates must file. As of June 15 Hovde's campaign had not filed his financial disclosure form, and had requested a second 30-day extension.

Could it be that Hovde doesn't want to disclose investments with those Chinese capitalists?

CMD's Harriet Rowan contributed to this article.

Mary Bottari

Mary Bottari is a reporter for the Center for Media and Democracy (CMD). She helped launch CMD's award-winning ALEC Exposed investigation and is a two-time recipient of the Sidney Prize for public interest journalism from the Sidney Hillman Foundation.