Scott Walker, Wisconsin’s Nearly 2 Billion Dollar Governor
What would your state’s governor do with a surplus of nearly $912 million?
Would he or she elect to increase government spending? Store it all in a rainy day fund? Or pay off state debt and balance the budget? For Wisconsin Governor Scott Walker, the decision was simple: cut taxes. Not only has Governor Walker cut taxes to the tune of nearly $2 billion dollars since he was sworn into office in 2011, but he has also reduced the total tax burden for all residents of the Badger State. In a state that has seen $2.16 billion in annual adjusted gross income (1992 to 2010) and 65,026 taxpayers (1985 to 2010) flee to other low tax states (according to Internal Revenue Service data contained within the book How Money Walks), Governor Walker recognizes the need to make his state more economically competitive and attractive to businesses, while lowering the overall tax burden on Wisconsin’s working men and women.
Signing Senate Bill 1 (SB 1) – legislation that provides $504 million in tax relief by reducing income and property tax rates, as well as eliminating income tax rates for manufacturers – into law this week was just one portion of the governor’s plan. Let’s examine the details of SB 1 and the other pro-growth, tax reform measures Governor Walker has worked diligently to pass in just three years in office.
During the 2013 legislative session, Governor Walker oversaw the passage of an income tax reform bill that reduced rates and compressed the state’s previous five tax brackets into four. The top marginal income tax rate was reduced from 7.75 percent to 7.65 percent, the two bracket rates of 6.5 percent and 6.75 percent were compressed and reduced to a single bracket with a rate of 6.27 percent, and the remaining two bracket rates were reduced below 6 percent at rates of 5.84 percent and 4.4 percent, respectively.
If that wasn’t enough, the passage of SB 1 went even further by reducing the bottom tax bracket’s rate of 4.4 percent to 4 percent: a $98 million tax cut. The bill also reduced the withholding tax for state income taxes by $322.6 million, thus letting Wisconsinites keep more of their hard-earned paychecks. As a result of these measures, the average worker making $40,000 a year will save about $58 annually. However, the ultimate goal for the governor is to eliminate Wisconsin’s income tax completely, thus making his state’s economy more like those of Florida and Texas.
In addition to reducing income tax rates, Governor Walker’s plan also cuts property taxes. Based on U.S. Census data from 2006 to 2010, the average median household tax and average property tax as percent of median income across the 72 counties are $2,481 and 4.31 percent. This year’s property tax cut of over $406 million – more than four times the property tax cut passed in 2013 – will see the average homeowner receive a reduction of $101 dollars on their next bill. By putting money back into the hands of consumers, Governor Walker is enabling the men and women of America’s Dairyland to reinvest in and stimulate the local economy.
In a region that has consistently lost jobs and wealth over the past two decades, Governor Walker is working to reverse the exodus trend in his state. Unlike his tax-hiking contemporaries in Minnesota and Illinois, Walker understands that reducing rates and cutting taxes will not only keep current residents from leaving, but bring businesses, entrepreneurs, and people into the state. Hence, every year the governor has been in office, tax rates have been cut and total tax burdens have been reduced. Imagine what Governor Walker could do with another four-year term.