Last Tuesday, Wisconsin Representative Cory Mason unveiled the Wisconsin Jobs Initiative to take advantage of a federal program proposed by President Obama to invest in technical colleges. Rep. Mason's proposal would raise the income tax on millionaires by one percentage point and is expected to raise $145 million annually and secure another $135 million in federal matching grants if the President's initiative is enacted. Mason said, "I want Wisconsin to be first in line for those grants."
If the state is able to raise the funds necessary and received the grant, it's worth noting that Wisconsin millionaires who pay more in taxes would likely not pay the full $145 million. Instead they would benefit from their ability to write off their state income taxes on their federal tax forms. (Read ITEP's brief on the federal offset.)
This proposal would make the state's income tax more progressive, but some state lawmakers want to move in the opposite direction. Rep. Peter Barca and other legislators are championing a proposal that would partially repeal the recent reduction of the state's capital gains exclusion from 60 to 30 percent by allowing a 60 percent capital gains exclusion for assets held longer than five years under the guise of encouraging "businesses to make long term investments in the state." For more on why capital gains tax breaks aren't helpful in terms of economic development, read ITEP's report on the issue.