State taxes fall below the national average

Wisconsin, local municipalities take 10.5% of residents’ incomes

MADISON - Wisconsin taxes — once among the nation’s highest — have fallen to just barely below the national average, highlighting the effects of a slow shift that has played out here over a generation.

In Wisconsin in 2014, the state and local taxes paid by residents added up to 10.5% of their income, compared with the 10.6%that state and local taxes took up of Americans’ incomes across the country.

The figures come from 2014 U.S. Census data, the most recent available and the first to account for more than $500 million in tax cuts made in the spring of that year by Gov. Scott Walker and his fellow Republicans in the Legislature.

Walker was the first to point out this latest ranking, weighing in even before any of the groups that closely track them.

“In 2010, Wisconsin was one of the 10 worst states in the nation for taxation. Through our common-sense reforms, we brought Wisconsin out of the bottom 20, and we’re putting more money back in the hands of hard-working taxpayers,” Walker said in a statement.

After peaking in 1973 at 14.7% of income, the tax bite in the state has been steadily declining as a share of how much money people here earn, according to figures from the Wisconsin Taxpayers Alliance.

But those declines weren’t enough at first to actually drop Wisconsin’s ranking compared with other states and as recently as 1994 this state had the third-highest taxes in the country when measured as a share of people’s income.

Since then, the state’s ranking has fallen, particularly since Walker and GOP lawmakers took power in 2011 and passed a number of tax cuts. The state’s ranking also fell after the 2015 discovery of a long-undetected data error by the U.S. Census Bureau that inflated the state’s rank.

Wisconsin is now 22nd highest in the country when measuring taxes against income. Because high-tax states such as New York can skew the national average upward, it’s possible for a state to fall below the national average in taxes but still rank higher than 25th.

State and local taxes in 2014 added up to $4,661 per person in Wisconsin, $214 below the national average of $4,875. On this per-capita measure, Wisconsin ranks 20th in the country, according to Jon Peacock, the research director of Kids Forward, which advocates for needy children and families.

Peacock noted that the state’s falling tax ranking hasn’t kept Wisconsin from lagging in job creation compared with other states in recent years.

“In light of the new tax ranking, I hope legislators will be less obsessed with additional tax cuts and will focus instead on making the investments in education, health care and infrastructure that are critical for our state’s future economic prosperity,” Peacock said.

There’s no sign that conservative lawmakers such as Sen. Duey Stroebel (R-Saukville) are going to drop talk of tax cuts, however. In a statement, Stroebel said he still wanted to lower taxes on businesses and flatten the state income tax to have the rich and the poor pay taxes at more similar rates.

“When Wisconsinites keep more of their own hard-earned money ... they will invest and spend it as they choose, ensuring Wisconsin’s future will be better for all,” Stroebel said.

For her part, Senate Minority Leader Jennifer Shilling (D-La Crosse) said the state will be better off when it provides enough funding for rural schools, road projects and needy families.

“Wisconsin residents feel like they’re being left behind by a Republican Party that continues to favor the wealthy,” she said.