State Assembly Republicans propose almost $3B tax cut targeting middle class
Wisconsin Assembly Republicans on Tuesday proposed a nearly $3 billion tax cut targeting the middle class, but it’s unclear whether Democratic Gov. Tony Evers is on board after he vetoed a similar tax cut just last month, the Associated Press reports.
Republicans called for tapping the state’s projected $4 billion budget surplus to pay for the tax cut, which would lower the state’s third income tax bracket from 5.3% to 4.4% and exclude the first $150,000 of a couple’s retirement income from taxes. That would apply to people over age 67.
The income tax cut would mean that taxes for income between $27,630 and $304,170 for individuals, and between $36,840 and $405,550 for married couples, would drop from 5.3% to 4.4%. Every joint filer earning between $18,420 and $405,550 would be taxed at the same 4.4% rate.
The retirement tax cut is a new proposal. It would exempt the first $100,000 from an individual’s retirement income from taxes and the first $150,000 from a couple’s income. Under current law, money withdrawn from an individual retirement account, 401(k) plan, or other retirement savings accounts are subject to Wisconsin income tax.
Evers has said he was open to reconsidering cutting taxes if Republicans would look at funding some of his priorities. Evers called a special session for the Legislature to spend more than $1 billion for child care, the University of Wisconsin System, worker shortage programs, and other areas, but the GOP has previously said it’s not on board.
It was unclear whether Republicans in the Senate, which must also sign off on any tax cut, agree to the plan. The Assembly was moving ahead quickly with the plan, scheduling a public hearing to take place today. The full Assembly could vote on passing it as soon as mid-September.
Republicans also introduced a proposed constitutional amendment that would require a two-thirds vote to approve any tax increase. That measure would have to pass two consecutive legislative sessions and be approved by a vote of the people before taking effect.