Tax Cuts Haven’t Boosted Wisconsin Economy

Tuesday, June 16, 2015 at 11:39 AM by

Wisconsin lawmakers on the legislature’s budget committee will probably meet this week to make decisions about a proposed income tax cut for high earners and other changes to Wisconsin’s tax system, among other issues. They should keep in mind that new evidence shows that no state that passed large income tax cuts in recent years has seen its economy grow faster than the national average.

Last week we showed how states that have cut income taxes – including Wisconsin – haven’t experienced a surge in job growth. Now we find out that tax-cutting states haven’t seen their economies expand, as measured by GDP growth.  According to the Center on Budget and Policy Priorities:

No state that enacted large personal income tax cuts in the past five years in hopes of spurring growth has seen its economy surge, new data on state gross domestic product (GDP) show. That adds to the already strong evidence that the tax cuts haven’t produced the immediate boost some proponents claimed.

In all five states — Kansas, Maine, North Carolina, Ohio, and Wisconsin — GDP growth has been slower than national GDP growth since the tax cuts took effect. (See chart.) While most of these states were doing relatively poorly before the tax cuts (only North Carolina grew faster than the nation at large in the year before cutting taxes), none have seen a clear improvement in growth relative to the nation since the cuts took effect.


When lawmakers meet this week, they should take note of the growing body of evidence showing that cutting taxes in Wisconsin and other states has done little to boost the pace of job growth or expand the economy. Instead, cutting taxes has made it harder to invest in Wisconsin’s communities, schools, and families.

Tamarine Cornelius

Categories: Blog, economy, JOBS & THE ECONOMY, STATE TAXES | Comments Off on Tax Cuts Haven’t Boosted Wisconsin Economy

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