Wealthiest Wisconsinites Would Get Big Tax Breaks Under GOP Proposal
Working Class Families Would Pay More in Taxes
Compared to President Obama’s tax plan, the tax package supported by Congressional Republicans would give big tax breaks to the top earners in Wisconsin, while raising taxes paid by working class families in the state.
The President’s and the GOP plan differ in two main respects: First, President Obama’s plan continues the Bush tax cuts for income up to $250,000, while the GOP plan continues the tax cuts for all income levels. Under the president’s plan, high earners would still receive tax breaks on the first $250,000 of their income.
Second, the president’s plan also continues improvements in tax credits for working-class and middle-class families. The GOP plan does not continue these improvements.
On average, Wisconsin taxpayers earning less than $250,000 would pay an average of $50 more in taxes under the GOP plan than the Obama plan, according to a report released by Americans for Tax Fairness. Wisconsin taxpayers earning more than $250,000 would pay an average of $18,460 less in taxes, as shown in the (very long) chart below.
The differences between the two tax plans are starkest for the poorest and wealthiest. Wisconsin taxpayers earning less than $25,000 per year would pay $120 more in taxes under the GOP plan than under the Obama plan, while Wisconsin taxpayers earning more than $500,000 would pay, on average, $60,000 less in taxes.
Under the GOP plan, Wisconsinites earning more than $500,000 — the top 0.6 percent of earners — would receive a quarter of the benefit of the total tax cut. Under the Obama plan, those taxpayers would receive eight percent of the total benefit of the tax cut.
The GOP tax plan costs $68 billion more than Obama’s plan. To put that amount in context, it’s more than the federal government spends in a year on repairing highways, improving K-12 education, expanding opportunities for low-income children with Head Start and school breakfast, and ensuring clean drinking water, according to Americans for Tax Fairness.