Wisconsin takes more in taxes from middle- and low-income families than their richer counterparts, according to the fourth edition of “Who Pays? A Distributional Analysis of the Tax Systems in All 50 States,” released on January 30th.
Jon Peacock, director of the Wisconsin Budget Project, is advising lawmakers about the effects of these findings and their relation to tax changes currently being discussed.
“The sort of income tax cut that is currently being processed won’t provide any assistance to the lower two-fifths of state tax filer,” Peacock said. The tax cuts would have a large benefit to taxpayers making over $150,000 per year. Wisconsin residents experience part of a national trend with the bottom fifth (9.6%) paying more than the top one percent (6.9%) of income taxes, says the report.
The latest budget change in Wisconsin raises taxes for low-income seniors as well and reduces the Homestead Tax Credit (tax relief for homeowners and renters) by $14 million and will further grow steadily in years to come.
“Who Pays?” shows that changes made in the last state budget increase the spread of taxes paid by the lower income residents of the state. It also shows that states claiming to have lower rates actually have higher total taxes on middle- and low- income families.
For more information or to see the full “Who Pays?” report, visit www.whopays.org.