We could give Wisconsinites hundreds of millions in backdoor tax breaks, without changing one rate.

We haven't seen the WisGOP plans to cut taxes in this state budget as of yet, but the budget papers on tax provisions have been released by the Legislative Fiscal Bureau. And it shows that Wisconsin could cut taxes by hundreds of millions of dollars over the next 2 years without changing one tax rate.

One of the ways that could be done is through adjusting the withholding tables, which were updated at the start of 2022 but haven’t changed since then. It would give Wisconsinites more take-home pay next January 1, but would reduce the refund those people would get in early 2025.

The main drawback of adjusting the withholding tables is the one-time cost to the state's general fund. It should be noted that, absent other tax law changes, this one-time cost will continue to increase each year that the tables are not adjusted. As noted above, the withholding table adjustment under Alternative 1 would reduce individual income tax revenues by an estimated $112.9 million on a one-time basis in 2023-24. However, this withholding revenue reduction would be offset in 2024- 25 because refunds owed to taxpayers would decrease by an amount equivalent to the reduced withholding amounts during the preceding 12-month period…..

But since LFB will be putting out new revenue estimates before those lower 2025 refunds come in, those changes get accounted for anyway, and don’t need to be part of the budget process.

Another relatively passive way to give a lot more income tax relief in Wisconsin would be to adjust a lot of tax write-offs and related items for inflation. LFB went over some of those provisions, many of which haven’t had their exemptions or credit limits changed for decades. The biggest of these is a tax credit designed to reduce and/or remove the "marriage penalty" in the state's tax code that increases the tax bracket for married couples when compared to what they would pay individually if they were single.

And this could result in a sizable one-time drop in some people’s tax bills. Not just for the large amount of Wisconsinites who might benefit from a larger married couple credit, personal exemption or property tax/renters' credit. There also are tax breaks that apply to life-changing events that haven't had their limits adjusted for a generation, reducing the aid given to Wisconsinites in those circumstances.

Yes, the private school tuition tax cut still makes me seethe, given that homeowners can get that writeoff along with their property tax break, and because it is likely that private school tuition will be raised more now that the amount of school vouchers are getting significant increases in a deal struck between Governor Evers and WisGOP legislators.

I do want to see if the WisGOP Legislature can get on the same page as Governor Evers about two other state tax breaks that have't been adjusted for inflation over time - the Homestead Credit and the Earned Income Tax Credit, both of which benefit lower-income Wisconsinites.

Evers’ budget proposal would increase the state [Earned Income Tax] credit to 16% of the federal credit for families with one child and 25% of the federal credit for families with two children. The change would affect about 200,000 low- or moderate-income filers who have children, saving them $300 per family on average, or more than $124.5 million over two years, the administration estimates., the administration estimates.

Homestead tax credit. A longstanding property tax break for low-income homeowners and renters, the credit currently is available only to people with incomes of less than $24,680, including low-income workers, people over age 62 or people with disabilities. The Evers proposal would raise the maximum qualifying income to $35,000 starting in the 2023 tax year, then index the income limit to keep pace with inflation. The DOA estimates savings to affected taxpayers at $100 million over two years.

Many Wisconsinites have seen inflation make them fall off of eligibility for EITC in the last decade, and the upper limit of the Homestead Credit has been stuck at less than $25,000 for the entire Age of Fitzwalkerstan, which means less than half the number of Wisconsinites have been able to take the credit over the last 10 years measured.

These type of "backdoor tax cuts" would help a lot of Wisconsinites, and allow them to catch up to the effects of inflation that have eaten away at a lot of these deductions over the years. I think it would give a lot more bang for the buck than cutting tax rates for the rich, but I also know there aren't as many campaign donations to be had in that.

So I'll brace for what is sure to be a stupid, trickle-down giveaway by WisGOP that is daring to be vetoed, while hoping they don't ignore the easy, efficient tax breaks that coud be done merely by updating some key deductions to meet 2023's realities.