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The mainstream media, with no historical memory, will invariably focus on what Gov. Tony Evers did today to the most recent Republican plan to cut taxes.
Here’s that story: in sum, he killed all Republican tax cuts except those that apply to the two lowest brackets. Those apply only to taxable income under $36,840 per year for married couples. Evers passed up a golden opportunity to give anyone at all making over $36,840 any sort of break on the next dollar they earn, even though Wisconsin has accumulated an enormous multibillion-dollar surplus.
There are multiple points of necessary context here:
The cuts that did survive are not significant
There are about 3.2 million tax returns filed each year in Wisconsin. About 677,000 of those, according to 2021 data, pay no income taxes at all for a variety of reasons: the sliding scale standard deduction, the refundable earned income tax credit, business losses, etc. In 2021, only 762,000 returns fell in the two lowest brackets (at the time either 3.54% or 4.65%). So the state will go on penalizing upward mobility for at least three out of four taxpayers because of the changes that became law Wednesday.
And those in the lower two brackets won’t save much because they don’t pay much. Taxpayers (all filers, regardless of type of household) in the lowest tax bracket in 2021, for instance, paid an average of $162 in state income taxes. Those in the second-lowest bracket paid an average of $581.
Gov. Evers did nothing to relieve the marginal tax rate for approximately 76% of all Wisconsin taxpayers
This includes everyone in the middle class who (filing as a married couple) makes over $36,840 per year.
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