Republicans propose $3.5 billion income tax cuts, slash UW System diversity funding
MADISON Wis. (CBS 58) -- Republicans who control the Joint Finance Committee proposed cutting income taxes by $3.5 billion in the state budget, a measure that received shift criticism by Democrats who say it primarily benefits millionaires and billionaires.
Under the plan, the state's income brackets will go from four brackets to three. The top bracket would fall from 7.65% to 6.5%. The lowest rate drops to 3.5%, under the proposal that would overall reduce taxes by 15% or $573 on average for all taxpayers, Republicans said.
The total tax plan amounts to $4.4 billion with $795 million geared for cutting property taxes. The move was expected as Republicans and Democrats have called on tapping the state's projected $7 billion state surplus to issue tax relief.
Republicans touted the proposal as historic, meanwhile Democrats ripped the plan because the wealthiest filers would benefit more than low to middle income earners.
Filers who earn between $50,000 to $60,000 would pay on average $165 less in taxes, while individuals making $150,000 to $200,000 would see a $1,251 tax cut, under the proposal.
"It is not true to say this tax plan is heavily weighted to the middle class because the medium income bracket is going to see a fraction of what the wealthiest Wisconsinites make under this plan," said Rep. Evan Goyke (D-Milwaukee).
Rep. Terri Katsma (R-Oostburg) said moving the state to a three-tier tax bracket will help Wisconsin become more competitive with other states that have simpler tax codes.
Other Republicans on the committee echoed that sediment and called the tax cuts "historic."
"We have never seen a tax cut like this," said Sen. Patrick Testin (R-Stevens Point). "I understand some of Democratic colleges have some heartburn about the top marginal tax rate and what that means, but this impacts every taxpayer in Wisconsin."
Rep. Tip McGuire (D-Kenosha) argued the tax breaks millionaires would receive under the GOP plan could have instead funded a pandemic-area childcare program, and school safety initiatives after Republicans on the committee voted to discontinue both services.
"You had a choice between regular Wisconsinites and rich people, and you chose rich people," McGuire said.
The measure is not in line with Gov. Tony Evers' budget proposal, which would primarily cut income taxes for individuals making less than $100,000 and married filers earning $150,000 or less.
Britt Cudaback, a spokesman for Evers, said the governor "believes that when we deliver tax relief, it should be real, responsible and targeted to the middle class."
"The GOP is doubling down on tax breaks for wealthy millionaires and billionaires instead of prioritizing relief for working families," Cudaback said.
Earlier this year, Senate Majority Leader Devin LeMahieu proposed implementing a flat tax which would move the state's income tax rates down to 3.25%. The bill received a public hearing but was never put on the floor for a vote.
The Republican tax cut proposal follows a $3.4 billion tax cut included in the 2021-2023 state budget which was passed by the legislature with bipartisan votes and signed by Evers.
The tax cut proposal was introduced ahead of the Joint Finance Committee final meeting to craft their budget Thursday evening. Republicans said they plan to hold votes in the Assembly and Senate next week. Then Evers will have a choice to sign, veto or issue partial vetoes to the spending plan.
UW System Cuts to Diversity Programs, Staff
The University of Wisconsin System would lose $32 million for diversity efforts on campuses and be forced to lay off 188 positions related to diversity, equity and inclusion after Republicans on the committee voted for these cuts in the state budget.
The move was expected after Assembly Speaker Robin Vos indicated he wanted to make deep cuts to diversity programs he calls "divisive" and a "waste of taxpayer dollars." In response, Evers threatened to veto the budget if DEI cuts were included.
Democrats were highly critical of the funding cuts after UW System President Jay Rothman warned lawmakers some campuses could close, and tuition rates may rise to make up the loss in revenue.
"If you vote for this garbage right here, if you fire 188 Wisconsinites simply because they took a job that cares about diverse populations Robin Vos wins," Goyke said.
Sen. Duey Stroebel (R-Saukville) argued that money would be better spent funding jobs in high demand instead of teaching students to "be good human beings."
"I don't think there are these raving racists that until they come to these hallowed grounds on UW Madison or whatever four-year campus, they will straighten them out. They will make them good human beings," Stroebel said. "I just got more faith in our citizenry."
The UW System would be allowed to retrieve the funding if they submit a plan to the committee detailing how they would use that funding to invest in the future workforce. Republicans would be allowed to reject or tweak those plans.