Senate Majority Leader: New Tax Burden Report Shows GOP Policies Work

Tax & Spending Cuts Work, says LeMaheiu

The top Republican in the Wisconsin Senate says the state’s new record-low tax burden is proof that cutting taxes and spending less gets results.

Senate Majority Leader Devin LeMaheiu on Friday took credit for the numbers in a new Wisconsin Policy Forum report that shows that Wisconsin’s overall tax burden in 2022 fell to its lowest level since 2000.

“Between 2000 and 2022 Wisconsinites benefitted from the largest decrease in tax burden in the country,” LeMahieu explained. “The sky didn’t fall, state revenues continue to climb, and Wisconsin is in historically-strong financial position.”

The Policy Forum report notes that Wisconsin’s tax burden had gone from 12.5% in 2000, to 9.9% in 2022.

“State and local taxes in 2022 fell to a record low of just 9.9% of personal income in Wisconsin, down from 10.3% the year before, new federal data show. This drop in what is often called the state’s tax burden caused Wisconsin’s tax ranking to fall to 35th nationally – the lowest on record," the Policy Forum report notes. "Rising incomes, state limits on local property taxes, and the recent large state income tax cut here helped lower Wisconsin’s taxes as a share of income to 1.2 percentage points below the national average...in 2022."

Wisconsin’s tax burden tied the national average at 15.5% back in 2014, and has been below the national average since 2017.

“With inflation running hot in 2022, state and local tax collections grew by 12.6% nationally,” the report states. “In Wisconsin, however, lawmakers and Gov. Tony Evers lowered the tax rate in the state’s third income tax bracket from 6.27% to 5.3% starting with calendar year 2021. That roughly $1 billion cut helped limit the growth in state and local tax revenues here to 4.6% in fiscal 2022. Without this income tax cut, the tax burden would have still fallen but less sharply.”

The report also notes that a smaller tax burden, and in fact a larger tax cut, has not stopped Wisconsin from spending more.

“State and local spending in Wisconsin grew robustly in 2022 but still fell modestly as a share of personal income. Direct general expenditures totaled $65.06 billion in Wisconsin in 2022, up 7.0% from the previous year. Spending as a share of income fell from 18.6% in 2021 to 18.3% in 2022 and the state’s rank fell slightly from 29th-highest to 30th,” according to the report. “As noted previously, the decrease in the state’s tax burden over the past quarter century has translated into a decrease in overall state and local spending levels and those for education in particular. Overall K-12 spending in Wisconsin rose 4.4% in 2022, but that was less than half of the 9.8% increase nationally.”

LeMahieu, though, added that Wisconsin public schools have seen record spending over the past few years, and Wisconsin continues to have a multi-billion-dollar surplus.

“Since 2022 the state provided K-12 schools with the largest increase in new resources in history and the state continues to have a $4 billion surplus,” LeMahieu said in a statement. “The 35th lowest tax burden in the country is great, but we can do better. Senate Republicans are committed to returning the state’s surplus to Wisconsin families by continuing to cut

taxes.”