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Proposed Flat Income Tax for Wisconsin Would Give Wisconsin's Wealthiest a Tax Cut of Over $100,000

Tuesday, April 11th, 2023 -- 12:01 PM

(By Evan Casey, Wisconsin Public Radio) A proposed flat income tax by a top Republican lawmaker would give an average tax cut of over $100,000 to the wealthiest Wisconsinites, according to a new report by the Wisconsin Policy Forum.

According to Evan Casey with Wisconsin Public Radio, meanwhile, Democratic Gov. Tony Evers' tax proposal would mean Wisconsin residents who make more than $1 million in adjusted gross income would see an average tax increase of nearly $40,000.

But it's unlikely either plan will pass, as the Republican co-chairs of the state's budget committee said in February they don't plan to pass a flat tax as part of the biennial budget. Evers has also called the idea of a flat tax a "poison pill" for the budget.

The GOP-controlled Legislature is also unlikely to approve Evers' tax proposal. The Wisconsin Policy Forum has said that lower income earners would benefit more from Evers' proposal while a flat tax would likely yield more benefits for those with higher incomes.

"In goals and approach, the two proposals diverge as far as almost any two major tax proposals in memory at the Wisconsin Capitol," the Wisconsin Policy Forum report said.

Even so, both proposals would have major effects on Wisconsinites who make more than $1 million in adjusted gross income, according to Jason Stein, the author of the report.

"They have this one similarity, and that is of focus on a lot of their changes on people at the very upper income levels," Stein said. The average tax increase for that group under Evers' plan would be more than 20 times as large as the change for any other income group, the analysis found.

For Senate Majority Leader Devin LeMahieu's flat tax plan, the average tax cut for those who make more than $1 million in adjusted gross income would be more than six times as great as for any other income group.

Currently, Wisconsin taxes income at four different rates depending on how much people earn. The wealthiest residents, those individuals who earn more than $280,950, pay a 7.65 percent tax rate.

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