Democrats, Republicans must compromise to accomplish state income tax cut
State Rep. Don Vruwink Guest Opinion
In 1911, Wisconsin became the first state to adopt and retain an individual income tax. The federal government followed suit in 1913. The individual income tax has been Wisconsin’s largest source of tax revenue, comprising about 43 percent of total state tax collections.
In his State of the State address in February, Gov. Tony Evers announced his plan to follow through on his campaign pledge to cut income taxes. Assembly Speaker Robin Vos was quick to rise to his feet in applause, and every other legislator followed suit.
A few days later, Vos introduced his very own income tax cut proposal. The Republican-controlled Legislature quickly passed it and Evers quickly vetoed it.
I think we can all agree that everyone would appreciate a tax cut. The difference between Evers’ proposal and Vos’ proposal is how we get there.
The bill that passed the Legislature relies on using a temporary state budget surplus. It was introduced quickly outside of the regular state budget process.
Evers’ tax cut proposal will go through the normal budget process. It would limit the manufacturing tax credit and increase state tax revenue by $237 million in 2020-’21. The current manufacturing tax credit disproportionately benefits large manufacturers, not small manufacturers. I want to emphasize that the agricultural tax credit remains intact under Evers’ proposal.
The governor’s proposal would give a tax cut to 84 percent of regular Wisconsinites. The governor’s proposal would also expand the earned income tax credit for low-income individuals. This is a credit for the working poor.
Democrats and Republicans both support an income tax cut. However, how we pay for it divides us.
The Evers administration is open to finding a compromise. The governor and his revenue secretary, Peter Barca, know that the differences are reconcilable. It’s the way shared government should work. I agree, and I believe 84 percent of Wisconsinites agree as well. Let’s find a way forward.