By State Representative, Leon D. Young
There is an old bromide commonly thrown around in politics that purports that “the devil is in the detail.” This particular expression seems quite apropos when considered in the current context of Scott Walker’s recent state budget.
By now, most of us have heard about the governor’s effusive comments regarding his budget proposal to cut taxes on middle-class families. To have him tell it, it’s the best thing since sliced bread. But, under closer scrutiny, does Scott Walker’s alleged tax break for working families actually pass the political smell test?
The governor is now on record for having proposed a two-year $332 million income tax cut for Wisconsin residents, but who stands to benefit the most from this change in state taxes?
Walker has said his proposal is a “middle-class tax cut” aimed at addressing the fact that income taxes in Wisconsin are highest on middle-income earners, at least when compared with those in other states. To start addressing that, the governor’s budget bill would drop rates for the state’s three lowest income tax brackets but wouldn’t change those for the top two brackets.
In truth, taxpayers making more than $100,000 a year in 2014 would receive 49 percent of the benefits under Walker’s proposal, even though they make up a little less than 20 percent of all tax filers. But upper-income taxpayers currently pay more in income taxes than other groups, which means they tend to get more of the benefits from cuts in income tax rates.
If one only considers the biggest tax change in terms of percentage, Walker’s assertion that his income tax cut proposal targets middle-class taxpayers is indeed accurate.
According to the non-partisan Legislative Fiscal Bureau, taxpayers in the $25,000 to $30,000 income range would receive a tax cut of 3.3 percent, the largest tax cut in percentage terms. On the other hand, taxpayers making more than $300,000 a year would see a cut of 0.6 percent, the lowest of any income class.
Having said all this, if Scott Walker is truly interested in providing real tax liability relief to hard-working, middle-class families there are better and more effective ways to accomplish this feat. For middle-class families a “real tax cut” is measured not in terms of tax cut percentages, but rather in money that’s actually received.
In my view, Scott Walker declaration of providing a middle-class tax cut is nothing more than offering a Trojan Horse.