Browsing: Tax Reform

Eliminating income tax on retirees is an effort to keep older spenders from fleeing Wisconsin. Nevertheless, the effort is a bad idea.

It’s telling that Gov. Evers, Sen. Larson and the rest keep using words like “the wealthy” and “rich” to talk about their targets. The Wisconsin income tax is levied not on wealth that people have saved but on income — what they earn. If you say “rich,” with its implications of inheritance or luck, you don’t have to grapple with how taxes take what someone is working for.

Using his partial veto power, Gov. Tony Evers removed the Legislature’s first steps on tax reform for Wisconsin, canceling a simplification of Wisconsin’s income tax rates and a reduction in the rates covering much of the middle class and most of the state’s businesses.

Wisconsinites clearly got some wins in the 2023-2025 biennel budget. Now the task at hand is consolidate and expand those moving forward.

A plan passed by Wisconsin’s Joint Finance Committee saves taxpayers $3.5 billion over two years, money that came from them in the first place because they’re currently overtaxed. Gov. Evers would do well to sign off on that plan.

The Badger Institute supports a flat-rate individual income tax, a structure increasingly adopted by competing states. We have spent years researching options for reform that includes a single, low rate. But if that is out of the question as budget negotiations proceed, the priority should be Wisconsin’s top rate.

Among the bills Republicans are considering in the Legislature is one eliminating the last remnants of Wisconsin’s personal property tax. The bill, AB2, sponsored by Rep. Dan Knodl (R-Germantown), would end property taxes on everything but real estate.The move is one the Badger Institute long has advocated.

America is choosing sides and Wisconsin — given the lurch to the left along its borders — can greatly benefit.

Minnesota, Illinois and Michigan are all now among America’s 17 thoroughly blue states where Democrats control both chambers of the legislature as well as the governor’s mansion. We are just one of 11 states with divided government, according to Ballotpedia, and Iowa is one of 22 states that is totally red.

Wisconsin’s top marginal income tax rate—the rate that matters most to the state’s economic competitiveness—remains among the highest in the country. Moving to a flat tax would substantially improve Wisconsin’s tax competitiveness. Separately, repealing the personal property tax would reduce compliance burdens for taxpayers and administrative burdens for the state. As policymakers work on the next biennial budget, each of these policy changes deserves thoughtful consideration.

Wisconsin can — and we think has to — do a lot more to compete with our neighbors. That’s where competition has to take place and with much of the rest of America. Or, watch our children and our neighbors move to states with more jobs and better wages, more opportunity and more prosperity. And those who are left behind at all levels are going to have fewer jobs, less opportunity, and more of the tax burden. People who are left behind are going to bear more of the tax burden. So, to us, the choice would seem clear.

The Badger Institute published new research by a nationally noted economist finding that a single-rate reform of Wisconsin’s individual income tax would yield substantial benefits to everyone in the state by spurring faster economic growth, more job options and more investment.

Estimates show moving to a flat individual income tax in Wisconsin could generate nearly $7.2 billion in additional GDP, $614 million in new investment, and nearly 24,000 additional jobs over the next five years.

Let’s forget about economic pie-growing for a minute (just a minute) as our legislators start to debate tax reform in…

Wisconsin’s flat tax is about what needs to happen next year and the year after that, and down the road even further when our kids are grown and tempted to take that job in Austin because all that’s left here is vacant office space and minimum wage gigs at the local vape shop. It’s about growing the pie the way CROWE assures us can happen.

More than one former Wisconsinite has told me over the years that to be considered a resident of another state – and be exempt from paying Wisconsin’s high taxes without completely abandoning your family and friends back home – you have to spend six months and a day there.

Turns out that’s not true.

Many of the folks proudly wearing the cardinal and white are Wisconsin transplants who are now sunburnt Florida residents. They were lured south, many of them, for short stints by the sun and the surf, but stayed for the taxes — or, actually, the lack thereof.

Wisconsin Senate Majority Leader Devin LeMahieu has introduced a plan to transition over four years to a flat 3.25% individual income tax from the current four-bracket structure with a top rate of 7.65%.

He discussed the plan in this office in the Capitol Wednesday with Badger Institute President Mike Nichols in this week’s edition of the Institute’s Free Exchange podcast.

The Badger Institute today celebrated the news that Wisconsin lawmakers, including Senate Majority Leader Devin LeMahieu (R-Oostburg), are unveiling legislation to shift our state to a single-rate personal income tax — a recommendation made by the Badger Institute and Tax Foundation in in July. 

A new poll found a surprising gap in voters’ understanding of how Wisconsin taxes compare to neighboring states, even as an unprecedented state revenue surplus makes tax reform a key issue in Madison.

The poll, of 480 registered voters in December, asked, “How do the taxes people pay in Wisconsin compare to the taxes people pay in neighboring states?”

On Dec. 14, the Badger Institute submitted the following comments to Gov. Tony Evers’ statewide listening session tour on the 2023-25 executive budget.