Wisconsin Republicans propose $250 million income tax cut
Income taxes for the average person in Wisconsin would be cut $105 under a Republican proposal unveiled Friday that lawmakers plan to vote on next week and quickly send to Democratic Gov. Tony Evers.
The nearly $250 million income tax cut is the largest part of the GOP plan that also would reduce personal property taxes paid by businesses by nearly $45 million and trim general state debt by $100 million.
Republicans are tapping some of the state’s projected $620 million budget surplus to pay for the tax cuts.
“Wisconsin is in great fiscal shape and we should prioritize giving money back to taxpayers,” Republican Senate Majority Leader Scott Fitzgerald said in a statement.
It’s unclear whether Evers supports any of the tax cuts. His spokeswoman Melissa Baldauff had not seen the plan and had no immediate comment. Republican Rep. Joan Ballweg said at a Friday news conference that lawmakers did not talk with Evers about their proposal before releasing it.
Evers earlier proposed spending $130 million to cut property taxes as part of a $250 million school funding plan the Legislature rejected.
Ballweg, in explaining why Republicans weren’t increasing school funding, said lawmakers will consider more money for schools next year when crafting the next state budget.
“I think we’ve done a pretty good job funding schools,” she said.
The state budget that the GOP-controlled Legislature passed last year and Evers signed increased funding for K-12 schools by about $565 million over two years. Evers had proposed a $1.4 billion increase. Evers earlier this month called the Legislature into special session to spend $250 million more on schools, but the Assembly refused to take action.
The newly released Republican tax cut plan would not reduce personal property taxes as the governor proposed and that Fitzgerald had earlier said was a priority for him as well. Instead, it would increase the standard deduction for income tax filers, thereby cutting income taxes. Reducing income taxes, instead of property taxes, will put more cash directly into the pockets of taxpayers, Ballweg said.
The income tax cut would affect about 64% of all filers, about 2 million people, and result in an average decrease of $105, according to the nonpartisan Legislative Fiscal Bureau. The tax cut would increase the standard deduction for each filing type by 13.2%.
Wisconsin has a sliding scale standard deduction that goes down the more a person makes. Under current law, married couples filing jointly who make less than $23,000 receive a $20,470 standard deduction. Under the bill, married couples earning up to $25,610 would receive a $23,170 standard deduction.
On the high end, currently any married couples earning more than $126,499 get no standard deduction. Under the plan, that income cut off would increase to $144,669.
The Assembly plans to vote on the plan Thursday, their final day in session this year. It’s unclear if the Senate would take it up next week or in March.