Wisconsin GOP leader proposes flat income tax

The Republican leader of the Wisconsin state Senate has proposed moving to a 3.25% flat income tax rate, a roughly $5 billion proposal that Democratic Gov. Tony Evers has vowed to block, according to a report from the Associated Press.

Details of Republican Senate Majority Leader Devin LeMahieu’s proposal would phase in a flat income tax rate of 3.25% by 2026. Income tax rates are currently split into four brackets, ranging from 3.54% for those earning up to $12,760 to 7.65% for those earning more than $280,950.

LeMahieu argues the move will make the state more competitive. He argues in the memo being sent to lawmakers Friday seeking cosponsors that the move will help Wisconsin businesses that are structured in such a way that they pay personal income taxes.

LeMahieu also argues that 31 states have a top rate that is lower than Wisconsin’s third tier rate of 5.3%. By moving to a flat 3.25% rate, only 11 states will have a lower top individual rate.

However, Democrats argue that under LeMahieu’s plan those already in the lowest tax bracket would see only about a quarter percentage point tax cut, while the wealthiest would have their tax rate cut in half.