[ad_1]
Madison, Wisconsin (AP) — Republican leaders in the Wisconsin Senate are set to propose a move to a flat income tax rate of 3.25% on Friday, a proposal worth about $5 billion, with Democratic Gov. vowed to stop it.
The conflict stems from both sides saying they want to use about $7 billion in state budget surpluses to cut taxes. Evers also listed other costly priorities competing with tax cuts, including increased funding for K-12 public schools and more funding for local governments.
Details of Republican Senate Majority Leader Devin Lemmahue’s proposal, ahead of its publication, were provided to The Associated Press to phase in a flat income tax rate of 3.25% by 2026. If you earn $280,950 or more, you can earn up to 12,760 – 7.65%.
LeMahieu claims the move will make the state more competitive. In a memo sent Friday to lawmakers seeking co-hosts, he argued the move would help Wisconsin businesses structured to pay personal income taxes.
LeMahieu also argues that Wisconsin’s top tax rate pales in comparison nationally, with 31 states’ top tax rates lower than Wisconsin’s Tier 3 tax rate of 5.3%. By moving to a flat rate of 3.25%, only 11 states will have lower top personal tax rates, LeMahieu said.
In arguing for the move, other Republicans also point to neighboring Democratic-run Illinois, which has a flat personal income tax rate. Illinois voters in 2020 also rejected a constitutional amendment that would allow lawmakers to change that and enact a progressive income tax system like Wisconsin’s.
Legislative Evers and Democrats have opposed a flat tax, saying it would primarily benefit the wealthy. 1 percent tax cut, and the wealthiest can cut their tax rate in half.
Democrats don’t have the voting power to block a bill from passing, but Evers has the veto power to block it.
Mr. Evers said last month that he “doesn’t think I can support” a flat tax. “I believe targeting the middle class is where we want to go.
Evers is moving ahead with plans to cut income taxes by 10% for individuals earning less than $100,000 and families earning less than $150,000.
Evers’ $600 million proposal caps insulin copays at $35, eliminates state minimum markup laws to lower gas prices, cuts taxes for fixed-income seniors, and retires with disabilities Expanding property tax relief for military personnel and spending on caregiving and childcare.
Debate over which taxes to cut and how much will be a big focus of Congress this year. Wisconsin’s budget is projected to run a surplus of about $7 billion, and support for tax cuts is growing from both Republicans and Democrats. The last state budget passed by the Republican Congress and signed by Evers cut his income tax by more than $1 billion.
According to the Wisconsin State Policy Forum, Wisconsin’s total tax burden (total taxes measured as a percentage of personal income) will drop to its lowest point in more than 50 years in 2022. But the Wisconsin State Policy Forum reported last year that the state’s average income tax rate favors high- and middle-income earners and hurts low-income earners.
[ad_2]
Source link
