A GOP-backed tax cut bill passed the Wisconsin Assembly on Tuesday along party lines amid a looming veto from Gov. Tony Evers.
The bill would lower individual income tax rates for Wisconsinites in the state’s third income tax bracket and increase and expand the retirement income subtraction for senior citizens within the state.
Republicans reintroduced a proposed income tax cut in late August that would drop income taxes from 5.3% to 4.4% for single-income households making between $27,630 and $304,170 and joint filers making between $36,840 and $405,550.
Republicans estimate their proposed tax rate would save middle-class filers $700 to $800 in annual income taxes. However, a nonpartisan Legislative Fiscal Bureau (LFB) analysis of a similar plan in July indicates the amount saved per filer would be hundreds of dollars more for filers making six figures than those with incomes at the lower end of Wisconsin’s middle-class income tax bracket.
“There’s no reason for this to not be a bipartisan bill,” Assembly Speaker Robin Vos, R-Rochester, said. “Now we get to actually put our money where our mouth is.”
Other Republicans echoed Vos’ call for a middle class and senior citizen tax relief plan.
“We passed a $99 billion dollar budget. That's a big budget,” Rep. Shannon Zimmerman, R-River Falls, said on the Assembly floor Tuesday. “This money should go back to those in your community when you go to the grocery store next, and you can tell people you made a difference in their pocketbook.”
However, Democrats who opposed Thursday’s bill said the average tax cut Republicans floated is misleading. Evers, a Democrat, previously called the tax plan “fiscally irresponsible” and promised to veto it, according to Wisconsin Public Radio.
Rep. Sue Conley, D-Janesville, said that no constituent told her “we need income tax cuts,” because Wisconsinites have other ideas on how to utilize the surplus including using “funds to bolster childcare.”
Conley pointed out that filers would have to earn more than $100,000 to get the estimated $700 in tax relief under the GOP plan. Over 60% of all filers in Wisconsin earn less than $100,000 annually and would receive 30% of this estimated tax decrease, she added.
Evers vetoed a similar proposed income tax cut for Wisconsin’s two highest tax brackets in the state budget, but said he would be open to reconsidering the proposed tax cut if Republicans agreed to look at funding his child care plan and the University of Wisconsin System, among other priorities, according to the Associated Press.
Republicans in response criticized Evers for reducing their proposed tax cut to $36 per filer, down from the $573 per filer average in their now-vetoed plan.
However, the average tax cut varied greatly by income under Republicans’ initial plan in the LFB analysis from July. Wisconsin filers making under $100,000 would have received less than 20% of the tax cuts, while those making over $100,000 would have received over 80% of the tax cuts.
The Assembly Ways and Means Committee discussed a Republican-backed bill on a tax-free childcare reimbursement for parents last week as well as the income tax relief bill brought to the Assembly floor Tuesday.
The tax bill is now on its way to the Senate. The Assembly does not have enough Republican votes to override a veto, if Evers delivers on his promise to veto the bill.
Anna Kleiber is the state news editor for The Daily Cardinal. Follow her on Twitter at @annakleiber03.
