300,000 State Residents Would See Tax Hike
U.S. Senate tax plan gives huge gains to wealthy, hikes taxes on 1 in 11 people.
Cash. Photo by Moritz Wickendorf.
Nearly 300,000 Wisconsin taxpayers would pay more in federal income taxes under a plan released on November 9 by Republican leaders in the U.S. Senate. That means about nine percent of all taxpayers in the state, or 1 out of 11 taxpayers – would pay more under the Senate plan. And if you consider who will wind up paying for the deficit-financed tax cuts in the long run, the number of low- and middle-income Wisconsin residents who would be worse off under the bill is likely to swell.
About 89,000 of the Wisconsin taxpayers with tax hikes are in the bottom 60% of the income spectrum, with incomes of less than $95,000. The average annual tax increase for those taxpayers would be $680. Figures are for 2027, when the permanent effects of the tax changes are in force.
While a non-insignificant number of Wisconsin taxpayers would see their taxes go up under the Senate plan, on average taxpayers would receive a tax cut – with the wealthiest getting by far the biggest tax cut. Wisconsin taxpayers in the top 1% would receive an average tax cut of nearly $50,000. That dollar amount represents a tax cut more than 250 times as large as the tax cut that would be received by the bottom 20% by income. In fact, the average tax cut that would be received by the top 1% represents more than the annual average income of Wisconsin taxpayers in the bottom 40% of the income spectrum.
Senate GOP Tax Plan, Like House Plan, Gives Biggest Tax Cuts to the Richest
Wisconsin taxpayers with low- and middle-incomes are likely to be worse off under this tax bill– not just compared to the richest taxpayers, but compared to their current standard of living – if you consider how the cost of the plan will be offset. This article in Medium explains why:
“[T]his tax bill isn’t fully paid for. It increases deficits over the next decade by $1.5 trillion. And while there are many low- and middle-income Americans paying higher taxes under the legislation, all income classes get a tax cut on average under the Senate plan — for now. And, it is just for now. Eventually, these tax cuts will be paid for, and then the question will be who covers the bill.
The Republican leadership has suggested how they intend to pay for these tax cuts and reduce federal deficits — through cuts to programs and services that disproportionately benefit low- and middle-income Americans. As a result, it’s not just that low- and middle-income Americans’ living standards won’t go up as much as those at the top. It’s that their living standards are likely to suffer in the long-run as they are left holding the bag.”
The Institute on Taxation and Economic Policy has more information about how the Senate tax plan would affect taxpayers in Wisconsin and other states.
For a summary of both the Senate and House tax plans, read this Bloomberg comparison of the provisions included in the bills.
In the Senate, the tax bill heads to the Senate Finance Committee, while the House plans to vote on its bill this week. Republican leaders in Congress are pushing an aggressive timeline, setting their goal for passing tax legislation before the end of the year.
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The headline could have read, “91% of Wisconsin taxpayers will see a reduction or no increase in taxes.”
A related story:
10 people go together into a Milwaukee bar each Friday after work. The have their usual couple rounds of beer and then the bartender gives them the $100 bill. The manager pays $60, five foremen each pay $8, and the line workers don’t pay anything. This goes on for awhile and then one week the bartender tell them that since they are regulars they will get a discount of 10%. He gives the manager $6 off and the foremen 80 cents each; the line workers don’t get anything back.
The foremen complain bitterly that the manager is getting a bigger discount and the line workers are even more vocal that they don’t get anything at all back. The next Friday, the manager doesn’t show up. When the bartender presents the bill, the foremen can’t believe that they have to pay more and the line workers can’t believe they have to pay anything at all.
Raising taxes on 300k hard working Wisconsinites is what republicans call “lowering taxes.” Fire Walker, legalize marijuana instead.
Bruce Hall, your folksy parable is as old and tired as it is fallacious.
Sam, it is directionally correct: https://taxfoundation.org/summary-latest-federal-income-tax-data-2015-update/
If the bottom 50% of income groups pay 2.8% of the taxes, how do you lower their taxes? To zero?
But, but, but we need the top earners to pay MORE! More than 37.8% of the total? Just how much is a “fair share”?
So, how is the parable “fallacious”? Oh, you mean the top earners can’t opt out. True, you can’t opt out of an unfair share.
The headline could have read “Taxes: All Workers and Retired Pay a Little More or a Little Less, While ALL The Very Wealthy Benefit.” Corporate media can repeat the mantra “needed tax reform” and a few will believe it to their regret, but this is nothing but economic war on the people who make their dollars for them.The “little more or little” less will turn into more and more as taxes rise on the state and local level to finance programs the feds are defunding and the federal rates are raised as the very wealthy find ways to pay nothing. If you get a W2 – the amount doesn’t matter, you can’t win unless you stand together.
The headline should read “The very wealthy and huge corporations get even richer, the rest get to pay for it, and their children as well”. The upside down plan to appease the very very greedy will ballon the deficit. And guess what services will suffer, those that help the middle class.
@Bruce Hall, Here’s another story. 10 people go together into a Milwaukee bar each Friday after work. The have their usual couple rounds of beer and then the bartender gives them the $100 bill. Suddenly the Revenuer G-Man goon squad busts down the door, smashes all the beer and arrests everyone. Remember Prohibition? Guess what, it still doesn’t work. Dump Walker, end cannabis Prohibition!
The answer isn’t the usual smoke and mirrors tax reform, it’s guaranteed annual income for every adult American. That would level the playing field and spread the tax burden among millions more.