Who pays in Wisconsin? Not the rich, unlike Minnesota.

With tonight's gubernatorial debate and election looming in 18 days, it seems worthy to give a look at the recently-released “Who Pays?” survey for 2017 from the Institute on Taxation and Economic Policy. This annual study goes into the tax structures of all 50 states and looks at which income groups pay which types of state and local taxes.

As the “Who Pays?” analysis of Wisconsin shows, 85% of Wisconsinites pay just over 10% of their income in state and local taxes, but the top 5% of taxpayers pay less.

Why is this? Because both the sales tax and property tax tends to take up a higher percentage of income among lower-income individuals, and the relatively progressive income tax doesn’t make up enough to even it out.

This makes Tony Evers’ idea of rolling back the M&A giveaway for people who make more than $300,000 all the more justifiable, as it evens up a Wisconsin tax structure that currently favors the rich. And given that the top chart shows a $200,000 family income to be in the top 5% of Wisconsinites, it’s really hard for Scott Walker and/or WMC to claim that move would mean “everyday people are having their taxes raised” – because they are not.

In addition, ITEP notes that the middle and upper classes have a higher burden in this year’s survey because of the GOP’s Tax Scam coming out of DC, which lessens the chances that those people in particular will write off those taxes next Spring.

The 6th edition of Who Pays does not include the impact of the federal deduction for state and local taxes (SALT) because policy changes in the 2017 federal Tax Cuts and Jobs Act temporarily limited the extent to which the SALT deduction functions as a generalized offset of state and local taxes.

This reality has brought up the ends of state taxes compared to where Wisconsin stood in the same survey 3 years ago, including the lowest income levels, the peak amount of people in the top 20-40% area of income, and even the highest incomes (of course, the richest people get the bigger Federal tax cut under the Tax Scam, so don't shed too many tears for them).

It’s sadly telling that even with the relatively regressive nature of Wisconsin’s state and local tax system, ITEP says there are 33 states more regressive than us. This is especially true of states like Washington, Texas and Florida that have no income tax, and states with flat income taxes like Illinois and Indiana (funny, GOPs never bring up Illinois’ regressive tax structure when they complain about what a fiscal wreck the state is).

We frequently compare Minnesota to Wisconsin on this page, and for good reason. Not only are the states similar in population and demographics, but Minnesota has consistently beaten Wisconsin in almost all measures of economic growth and quality of life since 2011.

And ITEP says that Minnesota has the 4th most progressive tax structure of any state in America, with the lowest percentages being paid by the poorest individuals, and the richest 1% pay the highest tax rates.

When you compare the Minnesota chart to Wisconsin’s, there are 2 items that stand out for me.

1. Wisconsinites in the bottom 95% of incomes pay a higher % in state and local taxes than the bottom 95% of Minnesotans do, but the top 5% pay notably less.
2. Minnesotan families make more money at every cutoff point on this chart, and generally enjoy a “premium” of 8-15% over Wisconsinites.

Bottom 20%
Minn Up to $25,400
Wis. Up to $22,100

20%-40%
Minn $25,400 to $43,600
Wis. $22,100 to $39,400

40%-60%
Minn $25,400 to $70,700
Wis. $39,400 to $65,000

60%-80%
Minn $70,700 to $115,300
Wis. $65,000 to $100,300

80% to 95%
Minn $115,300 to $227,900
Wis. $100,300 to $198,000

Top 5% to top 1%
Minn $227,900 to $573,500
Wis. $198,000 to $512,600

So there’s no proof that the higher taxes on the rich in Minnesota have done anything to hold their low-unemployment, growing state back, or limit salaries for anyone at any level. It makes it absurd for Scott Walker and WMC and other right-wing oligarchs to claim that doing so in Wisconsin will slow down the already-subpar growth that we’ve had the last 7 years.

Not that many of the ITEP's findings should surprise you, but it's another bit of evidence that perhaps the relatively regressive way we have been going across tax policy in Wisconsin isn't the way to continue. Maybe instead we should be encouraging investments and quality of life that attracts high-wage and high-level talent, and the success of Minnesota indicates that maybe we should stop giving the free ride to the rich and corporate that hasn't led to better job growth or wages.