Wisconsin residents will experience a slight decrease in their income taxes, averaging around $3 per month, following the implementation of a scaled-back tax cut recently signed into law by Governor Tony Evers. This modest reduction stands in stark contrast to the significantly larger tax cut initially proposed by Republicans, which the governor ultimately rejected.
A nonpartisan analysis by the Legislative Fiscal Bureau reveals that the enacted tax cut amounts to an average annual savings of $36, equivalent to less than 1% of the net tax owed. The original Republican proposal, in contrast, would have delivered an average annual tax cut of $573, representing over 15% of the net tax liability.
Governor Evers and his Democratic colleagues argued that the Republican plan disproportionately favored high-income earners at the expense of the middle class. For example, households earning between $60,000 and $70,000 annually, which is near Wisconsin's median income, would have received a $249 tax cut under the Republican plan. The implemented plan provides these households with a $44 reduction.
While Republican Assembly Speaker Robin Vos has expressed interest in overriding the governor's veto, this outcome is unlikely due to the need for Democratic support in the Assembly. Vos has also suggested the possibility of introducing a revised tax cut proposal later in the year.
Governor Evers' veto specifically targeted rate reductions for individuals earning above $27,630 and joint filers earning above $36,840. This action effectively limited the tax cut's impact to taxable income below these thresholds, resulting in a significantly reduced overall cut of $175 million over the next two years, compared to the $3.5 billion proposed by Republicans.
The largest percentage decrease, 3.4% or $24, will be experienced by those earning between $30,000 and $40,000 annually. Conversely, the smallest percentage cut, less than 0.1% or $2 per month ($24 annually), will affect the approximately 7,600 individuals earning over $1 million per year.
