GOP proposes 4.5% cap on Wisconsin income tax rates 

An article from the Wisconsin State Journal reported the details of a GOP-authored plan to cut state income taxes. The proposal, a hybrid flat tax, outlines state income tax consolidation measures that would result in zero income taxation for the state’s lowest earning residents and a 4.5% flat tax for all others. 

Currently, those in the lowest income bracket — individuals making under $13,810 per year or less and married filers making around $18,400 or less — are taxed at a rate of 3.54%. Those in the highest income bracket — individuals making $304,000 or more and married filers making $405,500 or more — have tax rates of 7.65%.  

According to the state Department of Revenue, 97% of Wisconsin taxpayers paid 5.3% or less in income taxes in 2021. Wisconsin’s current budget, drafted by Republicans and signed by Evers in 2021, included more than $1 billion in income tax cuts. Evers has said previously he would veto proposals for a flat income tax.  

The latest tax cut proposal comes as lawmakers approach the busiest weeks of the state’s biennial budget process. Legislators have a roughly $7 billion projected surplus at their disposal, with a good portion of that consisting of one-time funds. 

If approved, the plan for the hybrid flat tax would be implemented for the 2024 tax year. After the initial cut, four subsequent tax reductions would occur if state general fund collections exceed expenditures. The plan is estimated to reduce state income tax collections by $3.5 billion annually once fully implemented, according to an estimate from the Legislative Fiscal Bureau.