The 2019-2020 Legislative Session started with "agreement-in-theory" on one major policy item, however, the details are getting in the way of policy victory. In the middle of January, Assembly Republicans unveiled a different way to "pay for" Democratic Gov. Tony Evers proposed income tax cut while also moving quickly to approve a state-level health insurance guarantee for people with pre-existing conditions.

The major point of disagreement is how to "pay for" the new tax proposal. Legislative Republicans would use the state's $500+ million surplus to fund the cut in year one and reduce overall expenses in later years. Gov. Evers' proposes decreasing the manufacturing and agricultural tax credit to provide added revenue to offset the tax cuts. The tax issue is an early test for how the governor and Republicans who control the legislature will work together as they vie for the public's attention and adoration.

The legislature's tax reduction proposal is targeted to taxpayers with incomes below the expanded income phaseout levels of $155,413 for married joint filers and $127,408 for single and head-of-household filers. A small number of filers with higher incomes would also experience tax decreases.

Governor Evers' Campaign Proposal

  • $340 million in tax relief
  • Targeted tax cut for individuals (single filers) making less than $100,000 and families making $150,000 or less
  • Paid for by increasing taxes on farmers and manufacturers by virtually eliminating the Manufacturing and Agriculture Tax Credit.

Assembly GOP Tax Cut Proposal

  • $340 million in tax relief
  • Targeted tax cut for individuals making less than $100,000 and families making $150,000 or less (nearly two million filers)
  • Uses GOP budget surplus of $588.5M for the first year and reduces the baseline in subsequent years.

The proposal would increase the maximum deduction by 20.3% for each filer type, increase the income levels for beginning the deduction phaseout by 17.6%, and modify each of the phaseout percentages so that they are closer together.

The proposal would reduce individual income tax collections by an estimated $490.2 million in 2021, which is the second year of the biennial budget.

Legislative leadership would like to move this forward quickly, perhaps even prior to the budget, while Gov. Evers is likely to include an item like this in his 2019-2021 Budget. 

WBA sent a Consumer Column to all members of the legislature that each office can use to explain to constituents how to best use unlikely windfalls to a consumers' advantage. Click here to see a copy of the WBA statement and consumer column