Tax Policy and the Race for the Governor's Mansion: Wisconsin Edition


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Voters in 36 states will be choosing governors this November. Over the next several months, the Tax Justice Digest will be highlighting 2014 gubernatorial races where taxes are proving to be a key issue. Today’s post is about the Wisconsin race.

During his first term in office,  Wisconsin Gov. Scott Walker passed three rounds of property and personal income tax cuts, and now he is on the campaign trail touting the so-called benefits.

But the truth is that Gov. Walker’s tax cuts disproportionately benefited the wealthiest Wisconsinites while lower-income people received little to no benefit. The Wisconsin Budget Project (WBP), using ITEP data, concluded that Gov. Walker’s tax cuts will give the bottom 20 percent – those earning an average of $14,000 a year – an average tax break of just $48 in 2014. In contrast, the top 1 percent of earners, or those whose average income is $1.1 million, will receive an average tax cut of $2,518.

If Gov. Walker is re-elected, tax cuts will likely remain a priority. He’s already pledged that property taxes won’t increase through 2018.  Even more worrisome, Gov. Walker has said he wants to discuss income tax elimination. While telling voters that he’d like to eliminate their state income tax bills may sound good on the campaign trail, Wisconsinites should know that most taxpayers, especially middle- and low-income households, will pay more under his plan. An ITEP analysis found that if all revenue lost from income tax repeal were replaced with sales tax revenue the state’s sales tax rate would have to increase from 5 to 13.5 percent.  ITEP also found that the bottom 80 percent of state taxpayers would likely see a net tax hike if the sales tax were raised to offset the huge revenue loss associated with income tax elimination.

Challenger Mary Burke, a Trek Bicycle Corporation executive and former state Commerce Department secretary, has yet to put out her own tax plan, but she recently told the Milwaukee Journal Sentinel that she would not take a pledge to not increase taxes, saying, “I'd want to look at the totality. We collect revenue in a lot of different ways. I certainly wouldn't look at raising (taxes), but I'd also want to look at it in the context of our finances, our budgets ….”

When asked specifically about her tax plan she remained vague, “My focus would be tax cuts targeted to the middle class and working families instead of breaks to businesses and those at the top that don’t create jobs….I’m particularly concerned about the very high property taxes across the state.”

As with every election, there’s a lot at stake in the upcoming Wisconsin governor’s race. Tax revenue funds every level of government not to mention vital programs and services. Low- and middle-income Wisconsinites pay a disproportionately higher percentage of their income in state taxes than the rich. Voters deserve to know details about each candidate’s plan for the state. In the coming months, let’s hope Burke provides more details about her tax plan, especially since the direction Gov. Walker wants to take the state seems particularly clear.  

 

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