With State of State looming, Senate GOP Leader floats tax cut plan Evers can listen to

With tax season starting and Governor Evers having his State of the State address tomorrow, might we see something that gives back some of a what is still a multi-billion dollar surplus. And at an event earlier this month, the top GOP in the Senate indicate there might be a smaller, more sensible tax cut from Wisconsin Republicans in 2024.

Senate Majority Leader Devin LeMahieu says he’s working on another income tax cut that would raise the income limits for the second-lowest tax bracket by more than $100,000. The Oostburg Republican told the WisPolitics luncheon at The Madison Club Thursday that he’s still hashing out the details with Joint Finance Committee Co-chair Sen. Howard Marklein, R-Spring Green. But he wants to raise the income limits of the second of four brackets so that families making up to $150,000 or $200,000 for married joint filers fit into the bracket, which currently has a limit of $36,840. The change would mean more Wisconsinites are eligible for the 4.4% income tax who currently fit within the 5.3% bracket, which currently has a cap of $405,550 for married joint filers.

LeMahieu said the proposal is aimed at addressing concerns Dems raised during the most recent budget cycle about Republicans’ proposal to collapse the four-bracket system into three. The plan would have essentially eliminated the top bracket and brought it down one bracket.

Now this actually makes some sense. We’ll see what the long-term costs of the tax cut would be (LeMahieu is quoted in the article as saying it would be around $1 billion a year), but this seems to give a lot of the benefits to everyday working Wisconsinites, and if the price tag isn’t too high, it won’t handcuff future budgets, allowing for needed investments to continue.

Let me remind you of how our tax brackets break down in Wisconsin today.

Also remember that the brackets are based on taxable income , which means actual incomes are $12,760 higher for singles and $23,620 for couples, until you get to around $18,400/$30,000. Then it fades back toward $0 by the time incomes reach 6 figures.

If you can do something like increase the upper limit of that 4.4% bracket from $27,630/$36,840 to $150K/$200K, and you're giving a sizable tax break to a majority of Wisconsin taxpayers (including the rich, by the way, since they're also getting taxed at 4.4% on more of their money). And as the Journal-Sentinel reminds us in their rundown of that WisPolitics event where LeMahieu mentioned the tax cut, it's not that far away from what Governor Evers wanted when he released his budget this time last year.

Evers said before the budget-writing cycle began he would not sign into law tax cuts for top earners in the state but instead wanted a 10% income tax cut for middle-class residents delivered through tax credits.

That story also has another pattern we've seen before in the last few years - LeMahieu shooting down something that Assembly Speaker Robbin' Vos got out over his skis on, and didn't get the Senate's sign-off on.

LeMahieu also indicated the Senate would be unlikely to support a proposal from Assembly Republicans to eliminate taxes on retirement income as a way to keep Wisconsin's seniors from moving out of state. He argued that if seniors make decisions on where to live based on income tax relief, "so does the average working person," and said lawmakers shouldn't be "choosing winners and losers."

And there's also the fact that Wisconsin seniors get much of their Social Security income already removed from taxation, along with other money sources, so Vos's scheme was really a giveaway to richer Boomers, at the expense of things that might help the other 90%+ of us.

So let's see if Governor Evers uses the statements of Senator LeMahieu tomorrow, and reaches out on a moderate tax cut package that could keep the price tag down to maintain a lot of our surplus, but also give a noticed boost to paychecks (or higher refunds) for many Wisconsinites. Especially with new maps coming, it would be a good time to push Robbin' Vos into actually doing something worthwhile, since a lot more of his Republican colleagues are going to have to deliver for their constituents, and won't be as threatened by primary opponents put up by the Dweeb from Rochester.