Wisconsin taxpayer — Ouch

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The Wisconsin Taxpayer report for 2009 just came out. Highlights:

Wisconsin has the 10th highest income tax rate in the country, at 3.3 percent.

Because of a change in the maximum property tax a municipality can levy, property taxes have increased 4.5 percent from last year.

Nevertheless, the importance of the income tax in the state budget has been relatively constant since before anybody can remember. It consistently accounts for roughly half of the state’s revenue. Middle class families, who represent about 40 percent of taxpayers, generate about half of that, while upper income taxpayers (more than $100,000), who account for about 10% of the population, pay about 40 percent. Low income individuals (less than $30,000) and families pay the remaining 11 percent.

Minnesota has higher taxes than us, while Iowa, Illinois and Michigan demand a significantly lower tax burden.

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5 Responses to “Wisconsin taxpayer — Ouch”

  1. Paul Axel Says:

    Keep in mind that Illinois has many “tourist’s taxes.” Tolls are higher for out-of-staters, and there are hotel and airport taxes. So, the burden on Illinoisians is lower. Personally, I’m fine with it.

    Michigan has lower taxes probably through a combination of tolls and a flat tax rate, as well as relatively high business taxes.

    Iowa…not sure, but their low tax rates may have something to do with farming subsidies. Just throwing a possibility out there.

  2. The Sconz Says:

    Very good point about the subsidies. It’s hard to form a position on tax policy, especially when one feels justified about the services higher taxes can sometimes create, however, I suspect Wisconsin would be better off diversifying its taxes a little more so that it doesn’t fall as heavily on income – we have some of the lowest liquor taxes in the country, for instance. We have a couple tourist taxes ourselves, I believe, including one for out of state boaters.

  3. Pete Says:

    One has to bear in mind that the entire mission of the Wisconsin Taxpayers Alliance is complaining about taxes. It’s been a while since I’ve gone to the trouble to grab the numbers but there are a few general things which almost certainly haven’t changed.

    Wisconsin’s government spending typically ranks average to low. This is because we rely heavily on the income tax and our average income is lower than the national average. Before anybody starts drawing conclusions about taxes affecting the economy/income, note that average income in Minnesota (with higher taxes) is higher than ours.

    The reliance on the income tax is historically intentional because the income tax is progressive and, though this often escapes the notice of conservatives, there’s no point in taxing people who have no money.

    Wisconsin is very near the bottom in effective business tax rate, not because the statutory rate is that low but because our business tax structure is loaded with loopholes. If we tightened up on business taxes we could probably lower income taxes a bit. There would be unbelievable howling about “business climate” but we’d effectively just be leveling the playing field between multinationals that can afford to evade their taxes and small businesses that can’t.

  4. Nick Says:

    The report usually ignores the fact that Wisconsin has extremely low user-fees. These are the fees that the state charges for things like registering a car.

  5. Laura HM Says:

    @Nick
    Please remember that there are many families in Wisconsin that cannot afford the user fees required to do such things as register a car, let alone all of the forclosures and job losses in the state. User-fee=a flat tax=higher tax burden on those with low/fixed incomes.

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