State Residents Taxes Down 22% Since 2000

Total federal, state and local taxes have plummeted — by 21.9% — for state residents since 2000, a new report by the Wisconsin Policy Forum has found.

Federal taxes cost 24% of your income in 2000 and dropped to 18.3% in 2000, a decline of 23.8 percent. 

State taxes dropped from collecting 8.6% of your income to 6.7% during that time, a decline of 22.1 percent. 

And local taxes dropped from 3.9% to 3.5% of your income, a decline of 10.3 percent. 

“At every level of government, taxes in Wisconsin generally have been falling for decades as a share of residents’ income,” the report notes. 

The combined state burden in 2019 was the lowest the group has ever measured, going back a half century, to 1970. 

Once ranked as the third highest in tax burden, Wisconsin still ranked 4th in Republican Gov. Tommy Thompson‘s last year and began dropping under Democrat Jim Doyle and continued to decline under Republican Scott Walker. The state now ranks 23rd in the nation in state-local tax burden and lower than most surrounding states, including Minnesota (7th), Illinois (12th) and Iowa (13th). 

And if anything that overstates Wisconsin’s tax burden because it is less reliant on fees and more reliant on taxes than other states. When total state-local expenditures are calculated, Wisconsin ranks 26th nationally, the report found. 

Wisconsin ranks higher than other states in income taxes (13th) and property taxes (16th) and much lower in the sales tax (38th), the report found. 

The decline in federal tax burden goes back decades, and the current level of taxation is the lowest its been in 60 years, as the Center for American Progress has found. The U.S. ranks far below most developed countries in total tax burden, the analysis found.

As for lower taxation due to the pandemic, the Wisconsin Policy Forum analysis used “personal income data from the most recent full calendar year and thus does not reflect the economic disruption caused by the pandemic,” the report notes. “It remains to be seen how COVID-19 will affect income going forward, but the latest figures for the first half of 2020 show a somewhat surprising trend in which personal income actually rose in Wisconsin and the nation.” That’s because the loss in wages was offset by federal stimulus payments and unemployment compensation paid out, the report theorized.