Wisconsin’s Manufacturing Advantage Endured: The Manufacturing and Agriculture Credit, 2013–2025
Junjie Guo and Ananth Seshadri
Executive Summary
Wisconsin substantially changed the tax treatment of manufacturing in 2011. The Manufacturing and Agriculture Credit (MAC), phased in beginning in 2013, reduces the Wisconsin income-tax burden on qualifying manufacturing production by as much as 7.5 percentage points. The credit differs from both a general corporate-rate cut and a negotiated incentive: it is tied more directly to production in Wisconsin, but it applies under a general rule rather than through company-by-company negotiations.
Manufacturing is unusually exposed to interstate competition. A manufacturer can often serve the same customers from Wisconsin or from a neighboring state. That makes the border a useful place to examine whether Wisconsin manufacturing gained relative to neighboring counties after the tax change. With final 2025 employment data, we can now see whether the early Wisconsin advantage lasted.
For every 100 manufacturing jobs in Wisconsin’s border counties in 2012, there were about 117 in 2025. Across the state line, 100 had become 96. Had Wisconsin’s border counties followed their neighbors’ path, they would have had roughly 11,900 fewer manufacturing jobs in 2025. That figure gives the scale of the divergence, not a causal estimate of jobs created by the MAC.
To address the uneven impact of the Great Recession, we also start in 2007 and remove three border counties. Wisconsin still leads by 13.6 points through 2025.
The divergence was much larger in manufacturing than in household-serving industries. From 2012 to 2025, manufacturing employment grew 21.1 percentage points more on the Wisconsin side than across the state line, compared with a 5.5-point advantage in health care, retail, restaurants, and other locally oriented services. The manufacturing gap was nearly four times as large.
Census data on business dynamics show that the gap opened mainly through expansion at existing plants. Existing Wisconsin manufacturing plants added jobs much faster than existing plants across the state line, while job creation from new establishments was nearly identical. The same border counties also gained share of Wisconsin’s manufacturing property base.
The largest divergence appeared along the Illinois border, where the manufacturing base immediately across the state line was by far the largest. Manufacturing employment in Wisconsin’s Illinois-border counties rose 29.8% from 2012 to 2025 while employment in the neighboring Illinois counties fell 11.5%. Wisconsin also adopted right-to-work while the MAC was phasing in, and other policies changed on both sides of the line, so the Illinois comparison does not isolate the MAC.
Taken together, the evidence suggests that the MAC materially improved Wisconsin’s position as a place to manufacture.