A state representative plans to reform and simplify Wisconsin’s tax codes later this spring in an attempt to lower income taxes.
State Rep. Dale Kooyenga, R-Brookfield, said he is working on lowering rates for Wisconsin taxpayers by removing tax credits, which he called “special loopholes,” from the state’s tax code.
Tax credits can drive economic behavior such as investment by individuals and businesses, according to Kooyenga, but this investment would likely continue even without many of these credits.
“The reality is the Wisconsin tax code doesn’t drive a lot of behavior,” he said.
Currently, tax credits exist for a variety of industries including investment in dairy and livestock farms as well as credits for owners of historic homes restoring their buildings.
“Why should our tax dollars go to someone’s home or someone’s private business to renovate it?” Kooyenga said. “It just doesn’t make sense from a public policy standpoint.”
He added less than half a percent of all tax filers claim these credits and said those people are generally wealthier. Additionally, federal tax credits also exist to incentivize such behavior.
Kooyenga said he expects to provide an amendment to the legislature in May.
Gov. Scott Walker also proposed lowering income tax rates for the bottom three tax brackets in his 2013-’15 biennial budget.
But Kooyenga said that proposal only eliminates one tax credit and taking more credits out of the tax code would benefit Wisconsin’s taxpayers.
“Instead of saying that there’s credits for specific [people], it’s spreading those credits over all taxpayers and lowering rates for everyone,” he said.
