Republican Proposal Cuts Taxes On The Wealthy
Senate Majority Leader Devin LeMahieu's plan moves toward flat tax system.
Senate Majority Leader Devin LeMahieu, right, listens during floor debate Wednesday, June 9, 2021, at the Wisconsin State Capitol in Madison, Wis. Angela Major/WPR
The Republican leaders of the state Legislature said Tuesday that they want to use a record budget surplus to enact “transformational, once-in-a-generation tax changes,” including lowering tax rates for the state’s wealthiest residents.
But the proposal is likely a non-starter with Democratic Gov. Tony Evers, who signed a Republican-authored tax cut last year but has his own ideas for cutting taxes in the next budget.
Evers’ Department of Administration announced Monday that the state was projected to end the current two-year budget with a massive, $6.6 billion surplus. That money is on top of an additional $1.7 billion in the state’s Budget Stabilization Fund, often referred to as the rainy day fund. That means that when Evers and lawmakers draw up the next budget, they’ll begin with that money in the bank.
Speaking at a Wispolitics forum in Madison, LeMahieu was asked whether he wanted to use the surplus to move toward a flat tax, where all taxpayers pay the same tax rate, regardless of their income.
“Yes,” LeMahieu responded. “That way all taxpayers get a tax cut. But we definitely need to drive down our top rates.”
Vos said Assembly Republicans would focus on returning money that was “overpaid” by taxpayers.
“I think it’s fair to say that our first priority would be cutting taxes as much as we possibly can,” Vos said. “The second would be we’re going to keep the money in our savings account. I would rather keep it in the savings account than expand the size of government.”
Vos said a third option would be a “stalemate” where nothing occurs. Should Evers and Republicans not agree to a new budget, the current budget would continue, and the surplus go unused.
Under Wisconsin’s progressive income tax, people who earn up to $12,760 are taxed at a rate of 3.54 percent, people with incomes between $12,760 and $25,520 are taxed at a 4.65 percent rate, and people who earn between $25,520 and $280,950 pay a rate of 5.3 percent. The wealthiest residents — those individuals who earn more than $280,950 — pay a 7.65 percent tax rate.
While GOP lawmakers have worked to cut the lower rates, they’ve left the highest income tax bracket untouched. LeMahieu said Tuesday it was time to change that.
“You know, we’re sort of an island with our top tax rate here in Wisconsin,” LeMahieu said. “We need to drive that down.”
The discussion over how to handle the projected surplus is reminiscent of what happened ahead of the last budget debate two years ago, only this time it’s happening on a larger scale.
In early 2021, as the economic effects of the pandemic began to lift and federal aid continued to flow to Wisconsin, the state’s budget surplus grew. GOP lawmakers rewrote the budget to add an income tax cut which Evers, to the surprise of many Capitol observers, approved.
During his campaign for governor this year, as the projected surplus continued to grow, Evers called on lawmakers to return some of the money to taxpayers. When asked about LeMahieu’s comments Tuesday, a spokesperson for Evers referred to the details of the governor’s plan released in October, which included a 10 percent tax cut for individuals making less than $100,000 per year.
Evers’ office also referred to the governor’s education budget released in September, which called for a $2 billion increase to public schools. Vos indicated that he could support some increase in public school funding but only if it was paired with an expansion of the state’s private school choice program.
Vos and LeMahieu said Evers called both of them since winning reelection, a gesture they described as positive.
“Gov. Evers and I did speak for five minutes,” Vos said. “Which was good because that was five minutes more than in the past two years.”
Vos, who won reelection after a messy primary season that saw him spar repeatedly with former Republican President Donald Trump, was also asked Tuesday whether he planned to run again in 2024. He said Evers’ defeat of Republican challenger Tim Michels was a factor.
“I will be honest and say that if Tim Michaels had won, I had thought about riding off into the sunset,” Vos said. “Now we have Tony Evers. So obviously I’ll make a decision in the future. But I’m planning on it right now.”
Top Wisconsin Republican calls for lowering income taxes on wealthiest residents was originally published by Wisconsin Public Radio
3 things Republicans are good at:
1. Lazy inept public servants
2. White supremacism and foment violence.
3. Tax cuts for the rich.
A few basics for a discussion. Of the “advanced” economies, the United States is now the most unequal country on earth. We share an income/wealth distribution with only 3 other countries: Russia, Brazil, and Mexico. That distribution is a tiny sliver of super-rich people, another sliver of rich ones, declining and insecure middle and working classes, and entrenched poverty. Nice company to be in. According to the historian Walter Scheidel (“The Great Leveler”), no nation with these levels of inequality has ever escaped mass violence. Not exactly good news.
Then, Wisconsin narrowly escaped a unique outcome. If Tim Michels had been elected governor, Wisconsin would have become the plutocracy that it was on the way to being when Scott Walker was governor. (The fake Koch brother call looks more significant each year.) It would have become a state controlled, at every level, by a group of those “tiny sliver super-rich people”, for whom there is never enough, and, for whom, tax cuts are always the starting point for getting more.
And, finally, to divert attention from their goals, there is the eternal need for “the shiny object.” That object always has two parts: the constant search for scapegoats, and, since it is all a “zero-sum,” making it clear that anything that anyone gets, especially if they are designated scapegoats, is coming out of their constituents’ pockets.
The useful discussion would be to identify the things above that are wrong or mis-statements.
Those with the most wealth and power always receive more from society, regardless of the era or who is in office. It just makes sense to me that those receiving the most should pay the most. Those just getting by are not lesser human beings. Most often, it is just a situation of luck to be able to or not able to grab onto an opportunity. Those with the most power have a greater opportunity to change the rules to their own benefit, so they should be taxed more heavily. Quality of life between $280K and $500K is certainly not drastic, so why don’t we have more tax levels that better reflect the quality of life? Why not zero taxation on those on a minimum income such as those only depending upon Social Security? The flat tax is a joke. It has been proven that the proposed flat tax definitely is a boon only to those who already have much and an extreme burden to those who are at the lower rung.
Gerald, and addition to your thought on “luck.” None of us get to pick our parents or where or when we are born. All matters of luck. And, closely related, is the reality that we now have a hereditary elite in our country. A large group of people who may have done or accomplished little or nothing but will live with great wealth for their entire lives. And they will behind the politicians who will oppose increases in estate taxes because of the non-existent family farm that will be lost.
And, of course, by “luck” I take it you mean “privilege.” The ZIP code you’re born in and the *inherited* social capital of belonging to the right family, alumni associations, and social circles largely determine one’s lot in life. That coupled with access to nutrition and healthcare during early childhood and into you’re early adult years. God forbid you suffer trauma, enter the foster care system, or enter the penal system for something like holding pot. Oh, the “luck” of being able to come up with cash bail! Not every person of privilege makes it and not every poor person stays low, but this brand of “luck” is baked into the system.
All of the above comments carry truth on many levels.
The gop party is entirely owned by oligarchs and, in fact, the majority of elected members have royally enriched themselves – -I use ‘rojo’ as my ‘hometown’ example.
They ALWAYS vote against regular citizens working hard to enjoy life by reducing their own taxes and increasing ours.
In fact, they always seem to vote against anything that will benefit regular folks – universal health care, raising minimum wage to reflect reality, restricting voting right and purging voter lists, really the list is endless.
But the above comments actually are more incisive than mine and I applaud all of you!
It all leads to a fascist leaning belief in governance by the wealthy and only the wealthy and the hell with the rest of us.