Walker’s income tax cut helps rich more
MADISON, Wis. (AP) — Gov. Scott Walker’s proposed income tax cut would give more money back to the rich than it would the poor, despite his billing it as a boon to the middle class, a new analysis shows.
The Wisconsin State Journal reported Friday that a family of four making $80,000 would save $106 a year under the tax cut, while those earning $374,000 or more a year would save $285 annually. That’s according to an analysis by the Institute on Taxation and Economic Policy done for the Wisconsin Budget Project.
The tax cut would probably mean little to a family of four earning just $21,000. With existing tax exemptions and credits, they currently would owe nothing and instead would get about a $575 refund, based on figures compiled by the Wisconsin Taxpayers Alliance.
"The governor has argued that by putting more money in people’s hands, the tax cuts will spur economic growth in Wisconsin," said Andrew Reschovsky, a UW-Madison professor of public affairs and applied economics. "There is no evidence that the tax cut will do much to encourage growth and job creation.“
Mark Schug, a UW-Milwaukee professor emeritus who now consults in the area of economic education, agreed that such a cut is not likely to be an economic boost.
"I do tend to think that the income tax reduction is not sufficient," Schug said.
Walker spokesman Cullen Werwie said the proposed tax cut is modest because "we had to work within the constraints of our budget to get tax relief to middle-class families."
Wisconsin’s state income tax rate ranks among the top 10 for households earning between $40,000 and $150,000 a year, according to a study cited by state budget officials Wednesday. Walker’s proposal for a roughly 2 to 3 percent state income tax cut would return a projected $343 million to state income taxpayers over the next two years.
Walker released his budget on Wednesday and the Republican-controlled Legislature will now take the next four months making changes before voting on it likely sometime in June.