(The Center Square) – Wisconsin Republican lawmakers continue to say their $3 billion tax cut is pretty much what Gov. Evers wanted.
Assembly Republicans said their plan, which cuts taxes for most people in Wisconsin and makes retirement essentially tax-free in the state, is in line with the governor’s campaign promise of a middle class tax cut.
“Our middle class tax cut, 100% of the rate drop is going to be to the middle class,” Rep. David Stefen, R-Green Bay, told reporters. “We listened to the governor. We’re hopeful he will meet us at this point.”
The Republican plan focuses largely on Wisconsin’s third high tax bracket, that includes married couples making between $36,840 and $405,550 a-year. It does not lower Wisconsin’s top tax bracket. The governor vetoed the Republicans’ tax cut package out of the new state budget because he said it gave a tax break to millionaires.
Evers last week promised to veto the latest tax cut, saying he already signed a tax cut for married couples making less than $36,840 and individuals making less than $27,630.
“The governor, after his [tax cut] veto, the average tax cut is about $36,” Rep. Terry Katsma, R-Oostburg, said. “This proposal that we have here today, is going to result in an average tax cut of $770.”
The money for the tax cut would come from Wisconsin’s $4 billion surplus, and Republicans say it would leave $1 billion in reserve.
The tax cut plan also would exempt $150,000 in retirement income from Wisconsin’s income tax, essentially making retirement tax free for most people.
“For those on fixed incomes, being hit by inflation is a permanent tax,” Steffen added. “So, by providing tax free retirement in Wisconsin, joining just four other states, we’ll not only be competitive, but we will be providing some much-needed relief for individuals in some very sensitive situations.”
The Tax Foundation ranks Wisconsin 21st in its state tax collection report and says the state and local tax burden is 10.7%.
Wisconsin’s top personal income tax rate, at 7.65%, is the second highest in the Midwest. Only Minnesota, at 9.85%, is higher.
Wisconsin’s second highest tax rate, the one that the Republican tax cut proposal focuses on, is 5.3%. That is higher than the flat tax rates in Michigan and Illinois, and higher than the 2.5% income tax that lawmakers in Iowa are headed toward in 2028.
