Property tax limits and modest income tax cuts helped drive down Wisconsin’s state and local tax burden in 2023 to a new all-time low, according to a February 2026 report from the Wisconsin Policy Forum.
The report, authored by researchers Andy Tisdel and Donald Cramer, said over the last quarter-century, Wisconsin has gone from one of the nation’s highest tax burdens to well below average, and it has also seen its spending levels and rankings drop in areas such as K-12 education.
The report also said this shift is becoming difficult to sustain.
The report did not analyze figures from the two most recent fiscal years — 2023-24 and 2024-25 — but it said the approval of local property tax referenda for schools and increases in Milwaukee sales taxes may slow or curb the long-term decline.
Declining taxes
The decline in the state’s tax burden puts Wisconsin’s tax ranking at 34th nationally, slightly higher than the 2022 ranking of 35th, which is the state’s lowest ranking on record.
Based on federal data, the report said local taxes declined to 9.77% of personal income in Wisconsin in fiscal year 2023, dipping below the previous year’s low of 9.83% to set a record.
In 2023, Wisconsin’s property taxes accounted for 3% of personal income, compared to 3.8% in 2000.
Tisdel also cited trends in personal income, income taxes and property tax collections in Wisconsin.
Personal income, which includes income from work, government payments and other income, grew by 2.3%. Nationally, it grew by 3.1%.
Tisdel said this is a long-standing trend in Wisconsin that is due to the state’s aging population and the mix of industries that exist here, “but it’s notable just as a way of understanding how we compare to the nation.”
State income tax collections grew by 2.2%, but nationally income tax collections fell by 14.1%. As a result, Wisconsin’s ranking in that category rose from 30th to 25th.
“We don’t know all of why that happened,” Tisdel said. “I speculated in the report that there’s some evidence that a lot of states passed income tax cuts in this year that were relatively large, where Wisconsin income tax cuts were more modest.”
Tisdel said the drop in tax burden would be more sustainable if government spending were to decline dramatically, but that’s unlikely.
Gov. Tony Evers is trying to reverse what he believes is the underfunding of K-12 education over the past two decades. The report provides some evidence in terms of the percentage of personal income that goes to K-12.
In 2000, Wisconsin ranked 8th in the percentage of personal income devoted to K-12 education, which stood at 5.2%. In fiscal year 2022-23, Wisconsin fell to 3.8% of personal income going to K-12 and ranked 34th nationally.
“So, the limiting factor is that if you want to have public services, then you have to tax and spend public money on them,” Tisdel said. “It’s just a question of how much we are taxing and how much we want in terms of services.”
Other notable findings from the report include:
- Wisconsin’s taxes as a share of income were roughly one percentage point below the national average of 10.7%. In the previous year, Wisconsin’s taxes as a share of income were 1.2 percentage points below the U.S. average, the largest gap the Wisconsin Policy Forum has recorded.
- Wisconsin’s tax burden is the fourth lowest among the 12 Midwestern states, and less than the tax burden of all of its neighbors except Michigan.
- Wisconsin ranked 28th in tax burden per capita, which is also a record low. In 2021-22, Wisconsin ranked 24th in tax burden per capita with $5,689 per person, while in 2022-23 the tax burden per capita was $6,044.
Methodology: The Wisconsin Policy Forum analyzed Wisconsin’s taxing and spending rankings by combining annual data from the U.S. Census Bureau with population and personal income data from the U.S. Bureau of Economic Analysis. The latest Census data is for state fiscal year 2023 (July 2022 to June 2023).
