The non-partisan Legislative Fiscal Bureau released an analysis late Monday of Governor Walker's proposed income tax cut. Gov. Walker's "middle class" income tax cut was unveiled last week during the 2013-2015 budget address to the State Legislature.
Gov. Walker has proposed changing the three lowest tax brackets. The rates would decrease from 4.60% to 4.50% for an individual making less than $10,750, from 6.15% to 5.94% for an individual making between $10,750 and $21,490, and from 6.50% to 6.36% for an individual making between $21,490 and $161,180. The state's top two brackets, 6.75% for an individual making between $161,180 to $236,600 and 7.75% for an individual making over $236,600, would remain unchanged.
According to the Fiscal Bureau's preliminary calculations, the tax cut will reduce "individual income tax liabilities of $162.3 million in tax year 2013 and $170.1 million in tax year 2014" for a total taxpayer savings of $332.4 million.
The average tax cut for all tax filers would be $83, or 2.2%. For a married couple filing jointly, the average tax cut would be $122 or 2.15%.
Just over 2 million or 73.0% of all taxpayers would see a tax decrease under the Governor's proposal. Taxpayers with income between $25,000 and $30,000 would see the largest percentage reduction in tax liability, 3.3%.
According to the Fiscal Bureau, "married-joint filers are expected to realize a larger share of the tax reductions, 71.0%, because the income of married-joint filers represents almost 70% of Wisconsin's adjusted gross income."
Gov. Walker's budget proposal has been formally introduced as Assembly Bill 40. The Legislature will now spend the next few months reviewing the Governor's budget. July 1st, the start of the next fiscal year, is the tentative deadline for passage of the budget through both houses.
See the entire Fiscal Bureau paper here.