June 20, 2019
MADISON – At a recent press conference and in debate at the Joint Finance Committee, it has been suggested that Gov. Tony Evers’ budget is a better value for taxpayers because it cuts taxes more than the JFC-passed budget. But that suggestion doesn’t hold water when Evers’ spending proposal is viewed as a whole.
Assembly Speaker Robin Vos (R-Rochester) summarized the big picture at a Tuesday press conference: “Let’s remember that the way the Evers budget funds their tax cuts is by raising taxes on people who are in Wisconsin, who either run a business or employ people, run a rental property and want to sell it,” Vos said.
The fact is, on the whole, the Evers budget would be a massive net tax increase on Wisconsinites:
- General tax cuts, including Evers’ middle-class tax credit and expansion of other already-existing credits, total $951.4 million.
- However, Evers would raise taxes in the general fund by a total of $1.64 billion over the biennium. The most significant tax increase comes via the near-elimination of the Manufacturing and Agriculture Tax Credit.
- That means in all, the net tax increase to Wisconsin taxpayers would be $688.7 million over the next two years.
- The Evers budget also raises the gas tax by eight cents per gallon and increases taxes on vaping products by a staggering 71 percent, both very regressive taxes.
However, those are just taxes imposed by state government. Evers’ budget would lead to increases in local taxes and fees in a variety of other ways, such as removal of property tax controls, which would likely push this total much higher.
On the other hand, the JFC-passed budget reduces income taxes by $536 million. Most of that, $321 million, is achieved not via a tax credit, but by reducing tax rates paid by all filers.
- The average tax filer will see more than $200 in tax relief in the next two years.
- The bulk of the tax relief would come through income tax rate reductions, a more ideal way to reduce taxes than via tax credits.
- The tax cut also benefits filers in the lowest income tax brackets the most. The second income tax bracket, currently at 5.84 percent, will fall to 4.93 percent in 2020. The bottom-most bracket will fall from 4.0 percent to 3.76 percent in 2020.
In short, Gov. Evers’ budget provided a larger tax break to a segment of the population, but funded it with a net tax increase of nearly $700 million on others. That tax increase would threaten economic growth and job opportunities for the very group Evers purports to want to help: the middle class. Viewed as a whole, the Evers budget is a gut punch to Wisconsin taxpayers, hardly the windfall some suggest.