Thursday, June 22, 2023

A quick reaction to the WisGOP tax package

As the gavel is set to drop on the allegedly final budget deliberation before the Joint Finance Committee, the GOP tax cut plan is out!

Republican lawmakers who control the Legislature's powerful budget-writing committee announced a plan Thursday that cuts income taxes for Wisconsin residents by $3.5 billion through a plan that focuses its largest reductions for the state's wealthiest filers.

The plan was met with immediate pushback from Democratic Gov. Tony Evers, whose spokeswoman reiterated the governor's opposition to focusing income tax relief for the top brackets. Evers has said he would likely not sign a budget that would lower the state's top income tax rates.

The plan would reduce the top tax rate of 7.65% to 6.5%, which amounts to a 15% reduction for the top earners in the state. The second-highest rate would reduce by about 17%, from 5.3% to 4.4%. The third-highest rate would go from 4.65% to 4.4%, or a 5.4% reduction, and the bottom rate would slightly reduce from 3.54% to 3.5%.....
"A 15% reduction" is actually NOT the way to calculate the tax cut, because as Wisconsin Watch's Matt DuFour points out, the richest Wisconsinites wouldn’t only get the tax cut from 7.65% to 6.5%.

Nice double-scoop, eh? And while I think the sales tax is fine for Milwaukee because of its high level of tourism and commuters, he does have a point about how we never help THOSE PEOPLE in Wisconsin's largest City.

The Evers Administration was quickly out with an analysis showing how slanted this tax cut ends up being when you're talking about total dollars.

There also is apparently property tax element in this WisGOP tax scam package, and given that an attempt by Robbin’ Vos to make massive changes to Tech College funding got put off in the Legislature on Wednesday, they’re not going to look at cutting property tax bills for K-12 schools instead.
The Republican proposal would also reduce property taxes by directing $590 million to the school levy credit. That comes in addition to a measure already approved by the committee sending $31 million into the state’s lottery credit, which also provides property tax relief.
Let me remind you that these tax breaks also give the biggest benefits to the people who own the most valuable Wisconsin properties, since the school levy credit and lottery credits are done as rebates of a portion of the property taxes that homeowners pay.

Based on how I would guess the tax cut statute is written, Governor Evers could line-item veto the tax cut to the rich easily, but I would guess he would NOT be able to reduce it to something like 7 or even 7.5% (because there is no “7” in the GOP’s bill).

The income tax cut from 5.3% to 4.4% for the majority of working Wisconsinites is in play. However, the LFB places that price tag at more than $1.6 billion over the next 2 years, and I would be interested in seeing how many more funds would be remaining after that. I also would be interested if that would put our budget into a structural deficit, where more money is spent in 2024-25 than is taken in, and the only “surplus” is what was carried over. This is something Robbin’ Vos and other “fiscal conservatives” have claimed they don’t want to see.

In the descriptions of the package, I don’t see anything relating to an increase in the state’s standard deduction, or the WisGOPs taking up Evers’ proposed expansion of the Homestead or Earned Income Tax Credits. Which means that the 0.04% decrease in tax rates is all a certain slice of lower-income working Wisconsinites will see. And even then, it may be nothing, since they might have write-offs that already keep them from owing any state income tax.

It's not surprising that WisGOP would be so broken and crooked that they would do this type of giveaway to the oligarchs that pay for their campaigns. But the unevenness of the giveaway isn’t going to be something supported by most Wisconsinites, and it’s amazing that GOPs continue to live in their own Bubble of trickle-down BS when it comes to tax policy. New maps are coming. And these WisGOPs are not going to be as insulated from Real Wisconsin like they have been for the last 12 years. But instead of adjusting to that reality, they keep doubling down on idiocy that has long since been rejected by most.

Even worse, if Evers is able to line-item veto the tax cut for the rich and keep the rest, GOPs in the Legislature have now boxed themselves in. Either satisfy your donors with a veto override vote (which will fail), and allow for you to be directly attacked for it in your next campaign. Or let it slide, hope people forget, but still have the record of voting for the giveaway in the overall budget.

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