Republicans propose $2 billion tax cut package; includes income, retirement tax savings

 

MADISON, Wis. (CBS 58) -- Legislative Republicans on Tuesday, Jan. 23 rolled out a series of four bills that amounted to nearly $2.1 billion in cuts to state income taxes and expanded tax credits.

The most significant of the proposals would dramatically change one of the state's four income tax brackets.

Currently, the second-lowest bracket covers married-joint filers making between $19,090 and $38,190, and it includes single filers making between $14,320 and $28,640.

One of the GOP bills would extend the upper limit of that bracket to married-joint filers earning $150,000 and single filers earning up to $112,500. For those taxpayers, their income tax rate would go from 5.3%, which is what the third bracket is charged, to 4.4%.

Analysis by the nonpartisan Legislative Fiscal Bureau found taxpayers making between $50,000 and $60,000 per year will save, on average, $145 per year. Those earning between $100,000 and $125,000 per year would average $600 in annual savings.

Republicans said the move was a response from Democratic Gov. Tony Evers' past effort to pass an income tax credit for married-joint filers making up to $150,000 per year. Republicans in 2022 rejected the idea, calling it an election year gimmick.

"Governor Evers has said many times that $150,000 is middle class," State Sen. Howard Marklein (R-Spring Green) said. "Governor, we heard you, and we look forward to getting this proposal on your desk for your signature."

The GOP bills also include a proposal to make retirement income up to $75,000 exempt for single taxpayers and up to $150,000 for married-joint filers.

Assembly Speaker Robin Vos (R-Rochester) said his goal was to have retirees stay in Wisconsin for more than six months, keeping their taxes beyond those amounts in the state's coffers. That tax cut would cost the state $466.2 million.

Another Republican bill would increase the married couple tax credit from $480 to $870 for joint filers. The proposed credit increase would cost nearly $161 million.

The fourth proposed tax change would increase the child and dependent expense credit to $10,000 for one child and $20,000 for two or more children. For a family making between $50,000 and $60,000, their average tax savings would be $441 per year.

State Sen. Van Wanggaard (R-Racine) said Republicans worked to ensure the cuts were targeted at middle-class earners, so there was no reason for Evers and Democratic lawmakers to oppose it.

"I think it's pretty disingenuous for the governor and for the Dems to say [the proposals are bad] just because it's not exactly what they wanna put forward," Wanggaard said. "This is totally middle-class."

Democratic leaders said they were open to discussing the tax cut proposals but said they had more pressing priorities. Senate Minority Leader Dianne Hesselbein (D-Middleton) specified child care was an area where she wanted to see progress ahead of tax cuts.

"My door is always open to people in the Republican Party, and they can always talk with me about their plans," Hesselbein said. "I was really excited to hear the governor talk about child care. We've been hearing it from every corner of the state, and I'm glad that he's continued to work on this issue."

The final scheduled floor period is seven weeks from Thursday. After March 14, lawmakers are likely to focus more on campaigning between then and November.

When asked if a compromise could include both tax cuts and additional state funding for child care providers, Hesselbein was skeptical.

"I'm not sure if the two of those are linked in any case; I don't think they need to be," she said. "I certainly think child care needs to be done, and it needs to be done today."

For his part, Wanggaard said he supported having the state provide additional funding to day care providers. He said if lawmakers didn't reach a deal on child care aid during this session, those conversations would continue over the summer.

"I would agree with [more child care funding], yes," Wanggaard said. "I think that we have to help make [providers] stable."

"It focuses on everybody who pays taxes," Vos told reporters at a Capitol press conference. "It focuses on people who pay for child care, anybody who's married, anybody who's married and anybody who's retired, so I think it's a great package."

A spokesperson for Evers said the governor would review the proposals but added Evers will not yet comment on legislation he hasn't read.

"Beyond that, Gov. Evers looks forward to delivering his State of the State address [Tuesday night]," Evers' spokesperson Britt Cudaback said. "He will speak directly to Wisconsinites about the need to find bipartisan support for real, meaningful solutions to address our state’s chronic workforce challenges, including a long-term fix for our looming childcare crisis."

Cudaback also referred to a report earlier this month from the nonpartisan Wisconsin Policy Forum, which found Wisconsinites are paying combined local and state taxes that are the lowest on record, going back to 1991.