U.S. Senate candidate Sarah Godlewski has been pitching a wealth tax, arguing that her own tax rate is lower than that of her parents, a pair of public school teachers.
But we had no idea how low Godlewski’s tax rate was in Wisconsin.
As low as it can go — zero.
State Department of Revenue records show Godlewski, a Democrat who was elected state treasurer in 2018, owed and paid no state income taxes in 2017 and 2018.
And she and her husband, investor Max Duckworth, paid the State of Wisconsin only $1,111 in personal income taxes in 2019, even though she pulled down a salary of $72,551 as the state’s fiscal watchdog that year. She has yet to file her tax return for last year.
Just last week, Godlewski reported she and Duckworth have assets worth between $23.9 million and $60 million, according to a Journal Sentinel analysis. Among their holdings are seven rental properties, including a Washington, D.C., condo they bought in 2017 for $1.2 million.
Godlewski didn’t break any rules by not paying state income taxes. She was able to reduce her tax burden to nothing through sizable charitable contributions, state economic development credits and venture investments in new firms that were not yet profitable.
One of the other Democratic candidates in the race for U.S. Sen. Ron Johnson’s seat said Godlewski’s situation points to a fundamental flaw in the tax system. Johnson, a Republican, has yet to say if he will run for a third term.
“It seems wrong for a tax code to reward wealth instead of work when millionaires who are new to the state pay nothing while Wisconsin workers shoulder their fair share,” said Irene Lin, spokesman for Outagamie County Executive Tom Nelson, who has averaged paying $5,888 to the state over the past 10 years.
“As one of the few non-millionaires running for U.S. Senate, Tom Nelson can be trusted to make sure millionaires and Wall Street aren’t profiting at the expense of working families.”
Godlewski calls for wealth tax
In a statement, Godlewski agreed that the system is broken when billionaires like Jeff Bezos are paying a lower tax rate than her parents.
“I’ll right this wrong as Wisconsin’s next senator with a wealth tax and by rolling back the Trump-Johnson tax giveaways to the rich and corporations,” Godlewski said. “The only way to lift up working families, the middle class, small businesses and family farmers is if those with more — like me and my family — pay more in taxes.”
Godlewski specifically began calling for the wealth tax, an idea promoted by Massachusetts Sen. Elizabeth Warren, in a July 20 column in the Cap Times, though she’s been a critic of the tax system for years. Johnson recently blasted Godlewski as Warren’s “ideological doppelganger” as a result of her push for the wealth tax.
Godlewski, 39, isn’t the first Wisconsin candidate to go without paying state income taxes in the past. Twice before, the issue has proved detrimental — perhaps even fatal — to candidates for the U.S. Senate.
Republican candidate Terrance Wall dropped out of the 2010 contest after it came to light that he failed paid to pay income taxes in nine of the previous 10 years. Also, deep-pocketed car dealer Russ Darrow lost the GOP primary in 2004, just weeks after it was reported that he had a zero on his state tax return two years earlier.
In this election, Godlewski’s light tax load stands in stark contrast to the other two multimillionaires in the contest.
Taxes paid by millionaires Lasry, Battino
Milwaukee Bucks executive Alex Lasry, the son of a billionaire hedge fund manager, has averaged paying $47,278 in state income taxes annually since moving to Wisconsin in 2014. His personal financial disclosure statement shows that he earned about $300,000 with the Bucks last year.
In 2018, Lasry paid the state more than $100,000 in income taxes, his highest amount to Wisconsin. His campaign said he sold an unspecified asset that generated extra income that year.
Lasry also is worth a good bit more than Godlewski.
According to his U.S. Senate filing, he listed assets ranging from $100 million to $273.1 million. This included holdings worth at least between $60.9 million to $80.7 million that he owns outright. (Both figures could be much higher because it includes at least $50 million in Milwaukee Bucks stock.) He is also an investor in family and business partnerships ranging from $39.1 million to $192.4 million.
The third millionaire in the contest, Wausau radiologist Gillian Battino, has paid more per year to the state over the past 10 years than either Lasry or Godlewski even though she is less wealthy.
Since 2011, Battino has paid an average of $50,450 in state income taxes, with her payments ranging between $39,000 and $59,000. Overall, she has turned over more than half a million dollars to the state government in the past decade.
In her U.S. Senate filings, Battino reported that she made $303,600 in income last year at the Marshfield Clinic and had an overall wealth of between $3.7 million and $10.9 million.
Reached this week, Battino expressed doubts that Godlewski would repair the current tax system.
“The fact that Treasurer Godlewski and her husband, like many ultra-wealthy individuals, were required to pay only $1,111 over the last three years on a net worth valued between $24 million and 60 million dollars is a pristine example of our taxation problems,” Battino said via email.
“Obviously, it’s hard to imagine someone who has benefitted so spectacularly from the problem will actually address the problem, let alone fix it.”
Godlewski first paid a Wisconsin income tax in 2016, when she worked as a deputy political director for Democratic presidential nominee Hillary Clinton’s campaign in the swing state during the fall of that year. Despite being in charge of women’s outreach for the campaign, Godlewski has acknowledged that she didn’t vote that November.
State records show she turned over $541 in Wisconsin income taxes while being being paid $8,337 for four months of work from the Wisconsin Democratic Party’s federal account.
Godlewski paid nothing in state income taxes in 2017 and 2018. During her 2018 campaign, she ran as a small-business owner who watched every nickel and dime with her company, MaSa Partners, a business incubator she created with her husband.
“When it comes to finance, you have to double-check everything — even the small stuff,” Godlewski said in a 2018 campaign ad for the treasurer’s race. “That’s what I do for my small business.”
According to her campaign, Godlewski and her husband, who filed jointly, had a $15,068 state income tax bill for 2018 before deductions and credits.
She then got a credit for $8,017 in itemized deductions, which was based in part on their $61,748 in charitable donations. There was $6,526 in Wisconsin Economic Development Corp. tax credits as a result of their Wisconsin business investments. Godlewski then claimed a $300 school property tax credit and a $225 married couple credit, bringing her tax bill to nothing.
It’s not as if she and her husband are paying nothing in taxes.
Her campaign provided the Journal Sentinel with a copy of the 1040 Form for her 2019 federal taxes. It showed the couple had taxable income of $367,855 and paid $55,321 in federal taxes that year. That represents an effective tax rate of 15%.
Godlewski wasn’t always so wealthy. Just a few years ago, she complained that she had a total of $75,000 in student loan debt from undergraduate and graduate school, some of it with interest rates up to 9%.
But her situation changed significantly when she married Duckworth, a former Fortune 500 exec, in 2014.
The two met while volunteering as board members of the U.S. Fund for UNICEF (United Nations Children’s Fund). Her campaign said the couple donated $144,000 to UNICEF and its partners from 2016 to 2019.
Now she has the resources to pour $45,000 into her campaign for U.S. Senate, giving her a megaphone to call for greater taxes for the rich and powerful.
Including those who pay nothing at all.
Erin Caughey of the Journal Sentinel staff contributed to this report.
Daniel Bice at (414) 313-6684 or email@example.com. Follow him on Twitter @DanielBice or on Facebook at fb.me/daniel.bice.