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
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
$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
Wisconsin’s budget challenges were exacerbated this year when the Legislative Fiscal Bureau announced in January that state revenue would be substantially less than previously anticipated. That development didn’t stop legislators from introducing a broad range of bills relating to tax cuts, but it significantly limited the number of those tax bills (and spending proposals) that were enacted during the recently ended 2015-16 legislative session.
A new summary of the session describes some of the noteworthy bills relating to taxes that were considered by the legislature, as well as bills related to the budget process that got some traction. As that document explains, only a few of the significant bills were enacted:
- An abridged set of changes to corporate tax laws (Act 218) – We were especially concerned about a wide-ranging set of proposed changes to the corporate tax statutes, which the Dept. of Revenue initially estimated could cost the state as much as $384 million per year!
Proposed Changes Will Hurt the Elderly, Blind and Disabled, while Corporate Fraud Goes Unpunished
The Wisconsin Senate moved a step closer last week to passing a bill that has been described as combatting fraud or abuse in the FoodShare program, but which will do little, if anything, in that regard. In contrast to the progress of that legislation, as each day passes it looks less likely that the Senate will approve a bipartisan bill (AB 669) that could accomplish a great deal to halt benefit fraud by businesses.
AB 669, which was approved by a voice vote in the Assembly, would make it a felony to fraudulently obtain an economic development benefit from the Wisconsin Economic Development Corporation (WEDC). It would also allow WEDC to bring a civil action to recover damages for fraudulently obtained benefits. Although the lead Assembly author of the bill is a Republican (Rep. Kerkman), and it enjoyed broad support in the Assembly, AB 669 hasn’t even been given a public hearing in the Senate. Read more
The Earned Income Tax Credit helps working families all across the state, and gives an especially large boost to families in northern and rural Wisconsin, according to recently-released information from the state’s Department of Revenue.
The EITC is a tax credit that benefits working parents who are struggling to make ends meet. Receiving the credit is associated with a whole host of positive outcomes for children and families, including helping children do better in school, raising college attendance rates, and improving the health of family members.
The number of families in Wisconsin that are strengthened by the EITC is substantial. In 2014, 253,000 of the total 2.9 million tax returns filed in Wisconsin included the EITC. That translates to 753,000 people in Wisconsin living in families that received the EITC. Those families received $99.6 million in EITC credits for 2014 – money they could use to make investments that help them keep working and improve the economic security of their family, such as paying for car repairs or saving for their children’s college educations. Read more