Saturday, December 17, 2022

GOP brings back flat tax scheme. As regressive and costly as ever.

With the new session at the Capitol getting underway in a couple of weeks, it's time for the GOP posturing on taxes to begin!

Tell me more, Molly Beck.

LeMahieu told the conservative MacIver Institute on Thursday he is working on a plan that would phase in a flat tax over two to four years, moving the state's income tax rates down to the state's bottom tax rate of 3.54%.

"You will see a flat tax proposal," he said of Senate GOP proposals in the upcoming legislative session. "We can't keep ignoring the fourth tax bracket in Wisconsin."

"We have the resources to do this," LeMahieu said, referring to a projected budget surplus of more than $6.6 billion. "If we do this in Wisconsin it will just be huge."
Oh, you mean the flat tax scheme that Hacky McFraley and other GOP lowlifes immediately denied once it came out? And doubly awesome to see LeMahieu tells MacIver this "news", since I have little doubt that MacIver's Bradley bosses gave him the plan in the first place.

I had predicted this is where the WisGOPs would end up when this most recent flat tax scheme first came out, because Tim Michels was stammering around claiming "no one's income taxes will go up" (even though he likely had no idea what level taxes would have to be in order to get there). And there it is.

I will say that another WisGOP tax idea was somewhat intriguing to me. Assembly Speaker Robbin' Vos says he has an different scheme that would designate part of the state's sales tax to pay for shared revenue to local communities.

Based on the Evers Administration's estimates, 1% of state sales taxes would be around $769 million in Fiscal Year 2023-24, and $791 million in Fiscal Year 2024-25. It looks like County and Municipal shared revenues are around $748 million a year today, so it's a nice little 2-3% increase in year 1. But that's nowhere near the 5-7% increase in costs that have come in 2022, let alone what has happened to costs in the 11 years before then. Seems like we're going to need to go a lot further than that little band aid, Robbin'.

Let me also remind you that the sizable inflation of 2022 is going to cause quite a few Wisconsinites to get a back-door tax cut in 2 weeks, due to indexing of tax brackets. You can safely add 5% of income to the upper limits of all of these numbers, to get an idea what things will look like when the 2023-25 budget is debated.

So a flat tax becomes even more regressive than it is today, since more Wisconsinites will likely be in the lower tax brackets in 2023.

This is before we even talk about the price tag. This would be billions of dollars thrown away on a tax cut that would overwhelmingly favor the richest Wisconsinites. And not only would I doubt this would have any immediate impact on our economy other than increasing inequality, it also would rapidly spend down our multi-billion dollar surplus, while not doing anything to fix our roads, or help local governments and schools make ends meet.

That's the type of long-term, Florida-like stupidity that hurts a state's econoimic competitiveness. Especially in a cold place like this. Let's see what the final numbers on this scheme looks like, but it seems like something that should laughed out of the Capitol as soon as it gets introduced, and replaced with a serious, more comprehensive fix to our funding situation for services at the state and local levels.

No comments:

Post a Comment