The tax structure proposed by AB 1 and SB 1 is heavily skewed to benefit the wealthiest Wisconsin taxpayers. Even with its progressive income tax, when combined with sales and property taxes, the top one percent paid 7.7% of their income in state and local taxes, while those in the next 4% below paid 8.5%. However, this generalization does not apply to the top 5% of taxpayers. Across the lower 95% of incomes, on average Wisconsinites paid about 10% of their income in state and local taxes. When looked at as a whole, over most of its range the current Wisconsin tax system comes close to being a flat one. Together they add up to $69,590 for a rate of 6.959% for someone earning a million dollars.Ĭurrently, the repressiveness of Wisconsin’s sales and property taxes is countered by its progressive income tax, according to an analysis by the Institute on Taxation and Economic Policy. The last column shows the tax generated by each of the brackets. The second to last column shows the allocation of the million dollars to each of the brackets. The last two columns in the table show the calculation for someone with a taxable income of one million dollars. The portion of income over $280,950 would be taxed at 7.65%. A taxpayer with a higher income would also pay that tax on the first $12,760 of income but then pay 4.65% on income between $12,760 and $25,520. For someone whose income is at or below $12,760, that is all the tax that is required. Under current law, the first $12,760 of taxable income is taxed at the rate of 3.54%. Presently Wisconsin’s income tax has four brackets, as shown in the table below. Subsequently, two identical bills were introduced in the state Legislature: AB1 in the Assembly and SB1 in the Senate. At the time of the earlier column the specifics of the proposed flat tax were not available.
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