MADISON, Wis. (AP) - A sweeping tax reform plan offered by Wisconsin state Assembly Republicans will cut income taxes an average of $80 for most filers next year, but greatly benefit millionaires once fully implemented, an analysis by the nonpartisan Legislative Fiscal Bureau released Tuesday showed.
By 2029, taxes would be cut by a net $2.7 billion, with nearly $1 billion of that benefiting people who earn more than $300,000 a year, the report said. Millionaires would see a $519 million tax cut that year, while those who earn less than $60,000 a year would have taxes cut by about $256 million.
Assembly Republicans released their tax reform plan Friday as part of their solution for funding roads in the state. The Fiscal Bureau report looks only at how changes related to the income tax would affect taxpayers.
The GOP plan calls for moving to a flat 3.95 percent income tax rate by 2029. Over the next three years it also calls for eliminating the capital gains exclusion, the alternative minimum tax, working families credit, married couple credit, property tax and rent credit and reducing itemized deductions.
Gov. Scott Walker opposes the plan, which would also apply the state sales tax to gas purchases while cutting the gas tax along with a host of other changes. Assembly Republicans who are pushing the changes have said they are open to tweaking their plan as negotiations continue with Walker and Senate Republicans on finding a road-funding solution.
The Fiscal Bureau analysis shows that in every year most tax filers will see a decrease in taxes. In the first year nearly 66 percent of filers would see taxes cut, while they would go up for 5.5 percent.
When the flat income tax is fully implemented in 2029, 62 percent of tax filers would see a tax decrease while 11 percent would see an increase. But in that year, nearly 6,900 millionaires would see taxes cut on average more than $79,000. Just 17 millionaires would have their taxes go up by nearly $36,000.
Republican state Rep. Dale Kooyenga, lead author of the tax plan, did not immediately return a message seeking comment on the Fiscal Bureau analysis. Democratic Assembly Minority Leader Peter Barca said in a statement that Republicans are trying to pass off a tax break for the rich as a transportation plan.
“Wisconsin residents are smarter than that,” Barca said. “They can see through Republican smoke and mirrors. This is just a bad plan for Wisconsin.”
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