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The top two Republican legislative leaders say they are optimistic they can work with Gov. Tony Evers in the coming session to pass structural tax relief, expand school choice and advance other policy reforms that will benefit Wisconsinites.
Moving Wisconsin from a progressive, four-bracket personal income tax to a flat tax will be a top priority, House Speaker Robin Vos and Senate Majority Leader Devin LeMahieu told attendees at a Tuesday luncheon in Madison hosted by WisPolitics. A large projected budget surplus increases the likelihood of meaningful compromise and trade-offs, they said.
The Wisconsin Department of Administration this week forecast that the state will have a nearly $6.6 billion budget surplus at the end of the fiscal year on June 30, 2023.
“It’s very exciting that we can make transformational tax changes in Wisconsin, make us more competitive than our neighboring states, hopefully keep businesses in the state, get our neighbors into Wisconsin to enjoy those benefits,” said LeMahieu. “That sets us up well while also giving us money to invest in core priorities like K-12 (education), roads, local government and things like that.”
LeMahieu said he would prioritize eliminating the personal property tax and adjusting the income tax brackets in a way that would give all taxpayers a tax cut.
“We definitely need to drive down our top rates,” he added. “We’re sort of an island with our top rate here in Wisconsin. We need to drive that down and beat our neighbors.”
Wisconsin’s top marginal rate of 7.65% is among the highest in the country. Fourteen states already have or are in the process of moving toward a flat tax — including Illinois, Michigan, Indiana and Iowa. Twenty-five states have lower top marginal individual income tax rates now than they did in 2012. Nine states have no individual income tax at all.
People leaving for states with lower tax burdens is a “huge problem demographically for Wisconsin,” said Vos. “We know that when somebody moves and leaves Wisconsin as a resident, rarely do they come back.
“I feel like there are areas of potential agreement with Democrats,” he said. “People want us to find ways to work together. I don’t know how any Democrat can say (that) fixing our tax code — so that we keep younger people here instead of moving away and successful folks instead of retiring somewhere else — should not be a goal for Wisconsin.”
The top priority for Assembly Republicans will be adopting long-term, permanent tax cuts while funding core services, Vos told the audience. LeMahieu added that “once-in-a-generation” tax reform would benefit Wisconsin should the country slide into a recession.
Another area for compromise, according to both leaders, would be increasing funding for public schools while expanding school choice. Vos made the case for universal school choice, including unrestricted open enrollment between public schools, the elimination of income limits for participation in choice programs and addressing funding disparities between children who attend public schools and those in choice schools.
Other priorities mentioned by LeMahieu and Vos included improving Wisconsin roads, addressing the district attorney shortage and restoring work requirements for those benefitting from government safety net programs.
Research and recommendations regarding these issues — and several others — were part of the Badger Institute’s recently released Mandate for Madison.
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