In the wake of Governor Tony Evers’ gutting of a historic tax cut proposal earlier this summer, Republicans are pushing another plan they said would deliver nearly $3 billion in tax relief for retirees and the middle class.
Conservative lawmakers said the plan to tap into the state’s projected $4 billion budget surplus is a “second chance” for the liberal governor to “do the right thing” and return overpaid tax dollars back to Wisconsin’s taxpayers.
Assembly Bill 386 — known as the “Returning Your Surplus” bill — would lower the individual income tax rates in the Badger State’s third tax bracket, according to the measure.
About $1 billion in relief would go to Wisconsin’s wide-ranging third-highest tax bracket, which would be trimmed from 5.3 percent to 4.4 percent. That bracket includes taxable income from $27,630 to $304,170 for individual filers and $36,840 to $405,550 for married couples filing jointly — the brunt of the state’s middle-income earners.
The legislation also would expand the retirement income subtraction amount up to $100,000 from taxable income for individuals 67 and older. The maximum per couple would be $150,000.
Currently, individuals 65 and older who receive income from a qualified retirement plan or an individual retirement account (IRA) may subtract up to $5,000 of such retirement benefits when computing their Wisconsin income tax.
Republican lawmakers said the initiative is expected to alleviate the state’s tax burden by more than $2.9 billion, with the average taxpayer saving $772 per year.
Evers vetoed a similar tax cut in the new state biennial budget signed in July. He whittled down that $3.5 million relief package to $175 million, providing the average taxpayer with a scant $36 in tax breaks per year. The Democrats had other government programs in mind for the money.
“In the wake of Governor Evers’ disappointing veto of the middle-class tax cut we included in the state budget, we are introducing our new plan to return the surplus to the taxpayers of Wisconsin,” said state Representative Jessie Rodriguez (R-Oak Creek) (pictured above, right).
Evers has not said what he’ll do with the latest Assembly proposal, but earlier this week, he said he would give Republicans “a second chance to put working families first” in passing expensive “affordable child care and paid family leave, investing in higher education, and addressing our chronic workforce challenges.”
In short, he wants to use the surplus to fund expanded government programs. Evers wants to spend $1 billion of the surplus on the four initiatives. The same governor who used his powerful partial veto pen to guarantee record public education spending increases for the next 400 years has said he’d consider a tax cut — if Republicans give him the government initiatives he demands.
I'm giving the Legislature a second chance to put working families first by expanding affordable child care and paid family leave, investing in higher education, and addressing our chronic workforce challenges. We can't afford to waste it. https://t.co/pbeG3qSNWv
— Governor Tony Evers (@GovEvers) August 29, 2023
Republican lawmakers said they want to remind Evers that Wisconsin’s record surplus doesn’t belong to him or the Legislature; it belongs to the taxpayers.
“The proposal introduced today will channel the state’s surplus into a permanent reduction to Wisconsin’s middle class tax bracket. This is your money that the government took too much of, and it’s only fair that it is given back to you,” said State Representative John Macco (R-Ledgeview), chairman of the Assembly’s Ways and Means Committee, which held a hearing on the bill on Wednesday. “We are also expanding income tax relief to Wisconsin retirees. No one who has worked their entire life in Wisconsin should be forced to move to another state because of our tax code.”
The bill could come up for a full Assembly vote in the next couple of weeks, lawmakers said.
“With today’s crippling inflationary pressures, people have to dig deeper into their pockets. Legislative Republicans are making good on our promise to return those dollars back to the hardworking people of Wisconsin,” Assembly Speaker Robin Vos (R-Rochester). “It’s time for Governor Evers to fix his veto mistake and sign this middle-class tax cut.”
– – –
M.D. Kittle is the National Political Editor for The Star News Network.
Photo “Tony Evers” by Tony Evers.
