A recent report from Forward Analytics found that Wisconsin’s income tax rates have been steadily cut over the past decade, resulting in over $7 billion in savings for residents between 2013 and 2023. Both Republican Governor Scott Walker and Democratic Governor Tony Evers signed tax cuts into law during this period, with the largest savings going to lower-income earners. Despite the cuts, the state saw an increase in revenue from individual income taxes, rising from $7.5 billion in 2013 to $9.7 billion in 2024.
Forward Analytics Director Dale Knapp attributed the increase in tax revenue to rising wages in the state. However, corporate income taxes also rose significantly between 2018 and 2022, offsetting some of the funds that would have been captured by personal income taxes. With the surplus in the state budget, lawmakers are being cautioned against using one-time funds for permanent tax cuts.
Knapp suggested that future tax cuts would likely be on the margins, with a focus on addressing disparities in the tax code, such as those affecting married couples. He also noted demographic trends like lower birthrates as justification for offering tax cuts to joint filers in Wisconsin.
Overall, the report highlights the impact of income tax cuts on Wisconsin residents, particularly on lower-income earners, and the importance of balancing tax cuts with maintaining revenue levels in the state.
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