Wisconsin residents strongly favor raising taxes on the wealthy and large corporations to reduce income inequality, a new poll shows. But instead of raising taxes on these groups, Wisconsin lawmakers have taken steps to give significant tax breaks to taxpayers with high incomes and corporations.
Two-thirds (66%) of survey respondents support raising taxes on the rich and big businesses, according to the spring 2016 Wisconsin Survey conducted by the Strategic Research Institute at St. Norbert College. Another 28% of respondents did not support raising taxes, and seven percent weren’t sure.
The poll results show that Wisconsin residents are alarmed about growing levels of income inequality and the widening chasm between the highest earners and everyone else. Wisconsin residents are right to be concerned. The share of income in Wisconsin going to the top 1% has reached its highest level ever, exceeding even levels reached prior to the Great Depression, and has more than doubled over the last 40 years. Read more
New tax collection figures released yesterday by the Wisconsin Department of Revenue (DOR) show a nice upturn in revenue in March, and that comes as a relief after a worrisome drop in February. After the rebound last month, the state is only modestly (0.4%) below the growth rate for the current fiscal year that the Legislative Fiscal Bureau projected in January.
According to the new DOR data, General Fund tax collections grew by $55 million last month, compared to March 2015, an increase of 6.2%. That follows a drop of $91 million (14%) in February. Read more
An Increased EITC for Childless Adults Would Reduce Poverty and Enjoys Bipartisan Support
Income inequality has been on the minds of many voters during the presidential primaries. If you think it’s only a concern of Democrats, take a look at the results of the most recent “Wisconsin Survey” – a St. Norbert’s poll conducted for Wisconsin Public Radio and Wisconsin Public Television. The survey last week of 616 registered Wisconsin voters found that 66% favor “increasing taxes on wealthy Americans and large corporations in order to help reduce income inequality in the U.S.,” compared to only 28% who said they were opposed.
There are lots of different ways to adjust taxes (and labor policy) to reduce income inequality. Unfortunately, most of those – such as closing corporate tax loopholes and increasing the minimum wage – have little chance in Congress right now. But one promising policy option that does have a chance is to provide a significant increase in the Earned Income Tax Credit (EITC) for adults who don’t have dependent children. Read more
Wisconsin lawmakers cut state funding for the UW System by $125 million per year for the budget period that runs between July 2015 and June 2017, reducing Wisconsin’s investment in keeping higher education accessible and jeopardizing the economic benefit that Wisconsin residents receive from the UW System.
UW officials have released descriptions of planned and ongoing cuts to academics, facilities, and services at each campus that have been made to reduce costs in the wake of the budget cut. Many campuses are reducing the number of classes offered, potentially increasing the amount of time students must spend in school before they can receive credit for courses required for graduation. Other campuses are postponing updates to outdated facilities, cleaning buildings less often, and reducing advising and mentoring services for students. This map shows a selection of the cuts made at each campus, along with each location’s share of the $125 million budget cut. Read more
Today is April 18th, the deadline for most people to file their income tax forms without penalty. (April 15 was a holiday in Washington D.C. this year, pushing off the deadline for filing until today.) We hear a lot of negative messages about taxes on this day. But this Tax Day, let’s remember that creating jobs and building broad-based prosperity requires investing in what works – and we can’t do that without taxes.
To build a strong Wisconsin economy, we need to invest in assets that help businesses thrive and help hard-working people climb into the middle class. That means Wisconsin needs to continue our tradition of supporting high-quality schools and preschools, an affordable university system, a healthy workforce, and a clean environment.
Taxes make these investments possible.
When state lawmakers cut income taxes for the wealthy or for corporations, we undermine our ability to support important services that Wisconsin businesses and residents rely on every day. Read more
Wisconsin is a better place when we all do well. Unfortunately, while the wealthiest have seen their incomes skyrocket in recent decades, incomes have stagnated for the middle class and those who struggle hardest to make ends meet. It’s becoming harder to make it to the middle class and stay there.
Wisconsin’s state and local tax system, like the tax systems in most states, makes this problem worse. If you look at who pays taxes in Wisconsin, it turns out that middle-class and low-income families pay a bigger share of their incomes in state and local taxes than the wealthiest households in the state. We call on financially-stressed families to pay 8.9 cents out of every dollar they earn in state and local taxes, while the wealthiest households pay just 6.2 cents out of every dollar of income. And many corporations pay little or nothing in income taxes.
Wisconsin’s middle class, once one of the strongest in the country, is shrinking faster than in any other state. Read more
The latest quarterly report from the Department of Health Services (DHS) projects that state spending for Medicaid and related services during the current biennium will be $85.2 million less than the state budgeted. That amounts to $12.6 million less state spending than the state estimated in its last update, three months ago. (I’m focusing just on the state share of spending; the total reduction from all sources is almost $203 million, relative to the amount budgeted for 2015-17.)
Granted, Medicaid spending trends can change rapidly, but the DHS report is welcome news – particularly since other budget indicators aren’t so good. Recently reduced estimates of national economic growth in 2016 suggest the possibility of less state revenue growth than anticipated, and as we noted in a recent blog post, state tax collections dropped by $91 million in February. Against that backdrop, the latest DHS report provides a bit of positive news relating to the prospects for keeping the state budget in the black. Read more
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$91 Million Decline in Tax Collections Underscores Need for Increased Transparency
The Wisconsin Department of Revenue (DOR) recently released the tax collection figures for the month of February, and the new numbers show a drop of $91 million for the month, compared to February 2015. That was a drop of 14% in General Fund tax revenue, even though February was one day longer this year.
For first 8 months of the current fiscal year, revenue is up 3.8% compared to the 2014-15 fiscal year. That’s a bit worrisome because the last revenue estimates from the Legislative Fiscal Bureau (LFB) projected tax growth of about 4.4% for the fiscal year that ends on June 30 (and that estimate had been revised down from the 4.6% increase anticipated when the budget bill was passed).
Unfortunately, the Wisconsin DOR – in contrast to its counterpart in Minnesota – almost never releases month-by-month tax collection projections in conjunction with the actual tax collection figures. Read more