Wisconsin's Tax Burden Lowest Level in Two Decades

Thursday, October 20th, 2022 -- 9:00 AM

(By Gaby Vinick, Wisconsin Public Radio) -Wisconsin's tax burden hit its lowest level in two decades in 2020, according to an annual report released Tuesday by the Wisconsin Policy Forum. 

According to Gaby Vinick of Wisconsin Public Radio, the report looked at new federal data, showing Wisconsin's state and local tax collections rose just 1.7 percent in 2020, the smallest increase since 2015.

Jason Stein, Wisconsin Policy Forum research director and author of the report, said the economy was relatively stable in the early months of the pandemic compared to other states.

"The takeaway here is that we did seem to, in the early days of the pandemic in Wisconsin, weather that a little bit better than other states," he said. Despite the low tax burden, Wisconsin's national tax ranking rose from 24th-highest in the country in 2019 to 18th in 2020.

"It's a little bit paradoxical," Stein said, adding he doesn't think the rise in rankings "reflects any kind of policy decisions that the state really made." Ross Milton is an assistant professor at the University of Wisconsin-Madison La Follette School of Public Affairs.

He said the study offers a clear picture of the state's tax levels. "There's a sense among many people that Wisconsin is a high-tax state, and that we should change that," he said. "This report reflects the fact that Wisconsin is really a moderate tax state."

Milton said states that relied heavily on hospitality and tourism taxes during the pandemic may have fared worse due to closures and stay-at-home orders. But Wisconsin relies heavily on property taxes, which remained relatively stable at that time.

The Wisconsin Policy Forum looked at the taxes collected from residents at the state and local levels across Wisconsin as a share of people's personal income. Over the past 20 years, the Wisconsin tax burden has dropped from 12.5 percent of personal income in 2000 to 10.1 percent in 2020.

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