This week, legislative Republicans passed a middle-class tax cut that they proposed a month ago. Both Governor Tony Evers and Republicans ran on a tax cut for individuals making less than $100,000 and families under $150,000.
The Assembly voted along party lines on Tuesday 60-33 and the Senate as well 19-14 to advance the measure to Governor Evers’ desk. While all agree on the outlines of an income tax cut, they disagree on how to pay for it and will likely be vetoed by the governor. He intends to include his own tax cut in his budget proposal that will be introduced on Feb. 28.
The Republican plan would give taxpayers $490 million in its first year and $338 million annually after that, according to the nonpartisan Legislative Fiscal Bureau. In the short term, Republicans would rely on a projected surplus of nearly $700 million to pay for the tax cut.
Evers' plan would provide more than $440 million in tax relief this year to lower- and middle-class people while increasing taxes by more than $220 million on manufacturers. In addition to the tax break for the middle class, Evers' plan would expand the earned income tax credit, which provides the working poor with tax breaks or cash payments.
Both plans would increase the standard deduction on a sliding scale and phase out until reaching the specified income thresholds.