Former UW Economist Governor Walker Proposes Eliminate Wisconsin Income Tax | Wisconsin
(The Center Square) – There is a plan that would end Wisconsin’s 6.27% personal income tax.
Former Gov. Scott Walker, University of Wisconsin economist Noah Williams and a coalition of state reform groups on Thursday proposed eliminating personal income tax as a way to jumpstart the economy of State.
âI would eliminate personal income tax altogether,â Walker told Jay Weber during News Talk 1130 WISN Thursday morning. “It would be gone, it wouldn’t be a cut.”
The idea is to remove income tax while increasing Wisconsin statewide sales tax from 5% to 8%.
According to Kiplinger financial analysts Rocky Mengle and David Muhlbaum, Wisconsin, ranks eighth in their list of the â10 Least Tax-Friendly States For Middle-Class Families,â behind Michigan’s # 1 and Nebraska’s # 2. The November 2021 report attributes Wisconsin’s state property tax ranking, which analysts say is the eighth highest in the country.
“Income taxes are average for middle-class families in Wisconsin, âMengle and Muhlbaum wrote. âStarting in 2021, the state reduced the income tax rate that applies to most middle-income taxpayers. But lowering rates didn’t help our imaginary middle-class family enough to offset the high property taxes. “
The property tax rate, according to Kiplinger analysts, is “$ 1,684 per $ 100,000 of assessed property value. “Badger State Income Tax is”3.54% (on taxable income up to $ 12,120 for single filers; up to $ 16,160 for joint filers) to 7.65% (on taxable income greater than $ 266,930 for single; over $ 355,910 for joint filers). Wisconsin income tThe tax rate for 2021 is 4.65% on taxable income between $ 11,971 and $ 23,930 and 6.27% for income between $ 23,931 and $ 263,480.
Williams, who heads the Wisconsin Economic Research Center at UW Madison, said Wisconsin’s income tax is one of the highest in the country, while the country’s sales tax State is one of the lowest. He said that by swapping a higher sales tax for zero income tax it would be a net winner.
âThe average household in Wisconsin pays almost $ 2,800 in income taxes,â Williams said. âWhile the increase in sales tax would add nearly $ 1,100 in taxes. [Eliminating the income tax] means a tax reduction of approximately $ 1,700 per household. So, in addition to changing the tax structure, this reform is a substantial tax cut. â
Williams’ analysis indicated that it is not just families who would save money by eliminating income tax.
âWisconsin’s progressive income tax exacerbates the distortions of the federal tax code,â Williams said. âThe vast majority of Wisconsin businesses, covering the majority of jobs in the state, pay under personal income tax rather than corporate tax. Thus, in addition to distorting household decisions about work and saving, personal income tax is a tax on small businesses in the state.
âThe reform would be a game-changer for Wisconsin. No more take-home pay. Higher employment. Higher GDP growth, âsaid Institute for Government Reform President CJ Szafir. “It would be a victory in every way.”
Williams’ report shows GDP growth of $ 28 billion in the first 8 years and employment gains of 175,000 jobs.
Nine states currently have no income tax. Walker said Wisconsin would be the first in the country if lawmakers passed the plan.
âWe would clearly have a competitive advantage,â Walker said. âWe are already seeing the exodus from Illinois to Wisconsin, Indiana and other states. That would only speed it up.