According to the Associated Press, income taxes would be cut across the board by $3.5 billion under a plan passed Thursday by Republicans who control the Wisconsin Legislature’s budget-writing committee, a proposal that Democrats assailed as being skewed to benefit the wealthy.
Under the income tax cut, which is retroactive to Jan. 1, 2023, the average reduction would be 15% for all filers or $573, Republicans said. The state would still go from four to three brackets, with the lowest rate dropping to 3.5% and the highest rate being 6.5%.
Democratic Gov. Tony Evers, who had proposed a tax cut primarily benefiting low and middle-income earners, criticized the GOP plan. Overall, however, when compared to national averages, rates in Wisconsin are higher for higher incomes and lower for lower incomes.
The largest percentage point drop comes at the highest rate, paid by married couples who earn more than $405,550 or single people making more than $304,170. That rate would drop from 7.65% to 6.5%. The middle two brackets would collapse so all married couples earning between $9,210 and $202,780 would pay 4.4%. The lowest rate for the poorest taxpayers would drop only slightly, from 3.54% to 3.5%.
The income tax cut will be paid for by tapping the state’s projected $7 billion surplus. Republicans also devoted $622 million to keep property taxes in check.
The GOP plan must pass both the Senate and Assembly before it goes to Evers. Both chambers will likely vote to pass the budget bill next week.
