Along with School Choice, Wisconsin’s majority Republican legislature is looking to phase in a flat tax. Gov. Evers has already responded, saying he’ll veto it. What’s the deal here?
Here’s Five Fast Facts About Wisconsin’s Proposed Flat Tax:
- 🧾 A What Now? - A Flat Tax is one where everyone pays the exact same percentage, regardless of income, before deductions. Those living below the poverty line will pay the same percentage as the middle-class and high-income earners.
- 📊 Level Playing Field - The flat tax proposal is similar to the one Republican Gubernatorial candidate Tim Michels suggested during his midterm campaign: 3.5%. However, this plan would use part of the massive budget surplus we’re sitting on.
- 🧮 Number Crunching - Our state’s income tax rates start at 3.54% and go all the way up to 7.65%. Critics of this idea point out that this doesn’t change much of the tax burden on the middle brackets. That top rate is for folks who make $267,000. In other words, the middle class will still be paying.
- 📉 Avalanche - According to the Department of Administration, this would lead to a domino effect where a flat tax would reduce state revenue by about $4B. It would then lead to businesses asking to lower the state corporate tax rate, leading to a $1B loss for the state.
- ⛔ A No Go - Evers has said he’ll veto any flat tax proposal should it make its way to him. Evers campaigned on a 10% tax cut for Wisconsinites earning less than $100K/year and families earning less than $150K/year, so that’s the only thing he would support.
🔥Bottom line: The 2023 session hasn’t even started and the knives are already out. Hopefully both sides can come to some kind of a compromise because that budget surplus is going to keep growing until it’s even larger than Minnesota’s. Most importantly, political gridlock hurts you more than anyone else and that’s regardless of your political alignment.
How do you feel about a flat tax?
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