An analysis of tax law changes since 2011 shows taxes in the state were cut by more than $13 billion over the 10-year period, according to a memo released late last week by the Legislative Fiscal Bureau.
Assembly speaker Robin Vos (R-Rochester), who requested the analysis, said the memo shows that a typical Wisconsin family will save $2,000 over the 10-year period in income tax rate cuts alone, at a time when he said Democrats across the country are proposing ways to increase taxes on American families.
"One of our top priorities has been to allow Wisconsin families to keep more of their own hard-earned money," Vos, said. "Republicans have proven we can cut taxes, fund essential state programs, and grow the economy."
Northwoods state Sen. Tom Tiffany (R-Minocqua) said the GOP-driven changes in tax law proves the party knows how to balance budgets and give money back to taxpayers.
"This nonpartisan report shows that we have kept our promises by allowing people to keep more of their hard-earned money, and we did it all while supporting strong investments in K-12 education and road maintenance," Tiffany said. "I am proud to have worked with my colleagues in the Legislature to give $13 billion in tax relief back to Wisconsinites who truly deserve the break."
According to the memo by LFB program supervisor Sean Moran, for the 10-year period beginning in 2011-12 through 2020-21, tax law changes adopted since January 2011 are estimated to have reduced cumulative taxes that would otherwise have been, and would be, owed by taxpayers by $13.1 billion.
That includes $7.2 billion in income and franchise taxes and economic development surcharges, $131 million in other general fund taxes, and $5.8 billion in property taxes.
For 2020-21 itself, tax law changes that have been adopted since January 2011 are estimated to have reduced tax liability that would otherwise be owed by $2.3 billion, including $1.2 billion in income and franchise taxes and economic development surcharges, $18.3 million in other general fund taxes, and $1.1 billion in property taxes.
The tax cut spree began after Republican Scott Walker was elected governor in 2010 and Republicans gained dominance in both houses of the Legislature, and this past week Vos reminded voters both of the Republican-led tax cuts and of Democratic Gov. Tony Evers' proposed tax hikes in the last budget, which were unsuccessful.
"I'm proud that Republicans led the way in the recent budget process and reversed Gov. Evers' plan to increase taxes by more than $1 billion," he said. "In the end, the taxpayers in Wisconsin win with a stronger economy and a smaller tax burden."
Even before the latest round of tax cuts in the current budget, the Wisconsin Policy Forum found the tax burden in the state dropped to the lowest level in nearly 50 years, Vos said. Its report examined state and local taxes as a share of income.
That report, released last December, showed that Wisconsin's tax burden fell in 2018 to its lowest level in a half-century, with taxes accounting for 10.5 percent of income, down slightly from 10.6 percent in 2017, marking the seventh consecutive annual decrease.
"The total tax burden shrank in recent years not because overall tax collections are lower than in previous years, but because incomes have continued to grow at a faster rate," the report stated. "State and local tax collections rose 2.3 percent in fiscal year 2018, while federal collections in Wisconsin grew 0.7 percent. The tax burden dropped mainly because total personal income grew more quickly, at 3.6 percent."
There also has been progress in the national tax climate index, Vos said, with the state moving from being one of the top 10 worst taxed states in the country in 2011 to number 32 now, according to the Tax Foundation.
"Assembly Republicans have followed through on our promise to reduce taxes whenever possible," he said. "Since 2011, we've lowered taxes every session that we've held the majority in the Wisconsin Legislature."
Not everything is rosy, however. While taxes have been cut, state spending has continued to rise during the years the GOP has controlled the Legislature. The latest budget the GOP approved spent less than Evers wanted but still was $4.3 billion more than the last state budget.
Tiffany voted for that budget - two GOP senators dissented - but in an interview earlier this year acknowledged that the higher spending level of 5.6 percent over two years was too high.
"It concerns me, the 5.6 percent increase in spending," Tiffany said. "That's a hefty increase, the largest increase since (former Gov. Jim) Doyle's last budget. But we had to meet some of the priorities the governor set out."
Still, Tiffany said that level should not be approved in the next budget.
"I think it's important as we set up for the next budget that we set some targets early on and not see a 5.6 percent increase," he said. "I would hope that we would be under 4 percent in the next budget. If there's a takeaway going into the next budget, that's the key one, that we need to keep spending under control."
Tiffany also acknowledged in that interview that spending increased during the time Scott Walker was governor, but he said Walker and the GOP-dominated Legislature moved the state in the right direction.
Before Walker became governor, Tiffany said, the size of state government was doubling about every 10 years. In the Walker era, he said, spending increases were controlled so that the size of state government was doubling only about every 20 years.
"I believe that is significant progress, and we need to make sure that we get back to that with the next budget," he said.
Richard Moore is the author of the forthcoming "Storyfinding: From the Journey to the Story" and can be reached at richardmoorebooks.com.
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