Flat tax plan
Move on, then.
Gov. Tony Evers made clear his stance on state Republicans’ proposal to transition to a 3.25% flat income tax rate last week, telling a Madison television station if lawmakers included it in their rewrite of his soon-to-be presented state budget he would veto it, possibly even if it meant vetoing the entire budget.
“(A flat tax) is kind of a death knell for me,” Evers said. “I think our progressive tax system is a good one. And we don’t need to be spending our time and effort to provide the wealthiest Wisconsinites with some extraordinary large tax cut.”
GOP Senate Majority Leader Devin LeMahieu has been pushing for the flat tax which would supplant the state’s four-bracket income tax based on income level. Income of 0 to $12,760 is taxed at 3.54%; income of $12,760 to $25,520 is taxed at a rate of 4.65%; income of $25,520 to $280,950 at a rate of 5.3%, and income over that at a rate of 7.65%.
Wisconsin has had the “progressive” income tax system since 1912.
LeMahieu and other Republicans contend switching to a flat tax would make Wisconsin more competitive with other states – like Illinois. …
But a 3.25% flat tax would come with a big price tag – if it was fully implemented it would reduce state revenue by $5 billion annually, according to the Legislative Fiscal Bureau. That’s one way to take a chunk off the state’s projected $7 billion surplus this year.
And, in fact, as Evers pointed out, the biggest benefactors of a flat tax would be the wealthy. Two-thirds of the tax cut would go to people making more than $150,000 a year. Someone making over $1 million a year would see an average annual state tax reduction of $112,167. Contrast that to someone making $40,000 to $50,000 – they’d see a reduction of about $290 a year.
Fortunately, Assembly Speaker Robin Vos, seems to be reading the tea leaves correctly. Vos said last week that while a flat tax would be his preference, “but I understand Gov. Evers has concerns with that. But the most important thing for us to do, we have to make big efforts toward reducing out tax burden. Flat tax would be ideal. If we can’t get to ideal, there are other ways to get there.”
Vos said he wouldn’t insist on including a flat income tax as part of the Republican budget proposal.
Great. Find those other ways. Remember, time is money. The governor and the GOP-controlled Legislature shouldn’t waste it on proposals that are going nowhere.