Capitol Update

by Senator Howard Marklein

January 26, 2024

Returning the State Surplus to You
 

This week, the legislature announced plans to return nearly $2.1 billion to taxpayers. The plan includes a new middle-class tax cut concept that I initiated, as well as a retirement income tax exemption and increases for the Child Care tax credit and Married Couple tax credit.

My Middle-Class Tax Cut proposal provides broad-based, middle class tax relief by changing the income levels that are subject to current tax rates. The bill expands the amount of income that is subject to income tax in the 2nd tax bracket which is 4.4% while reducing the amount of income that is subject to tax in the 3rd tax bracket which is 5.30%.

Governor Evers has said that $150,000 is middle class. Our bill moves taxpayers who make up to $150,000 into the 2nd tax bracket.  They will now be taxed at 4.4% rather than 5.3%. So, under our bill, a working family making $150,000/year (married, filing jointly) would see a tax decrease of about $800 per year – and they would see this impact starting this summer!

This tax cut will impact actual people in our communities. A combined household income of $150,000 is the nurse and cop next door. It’s the two teachers who live down the block. It’s the operating engineer and bank employee. It’s the union factory worker and vet tech.  This is our middle class.

In addition to the new Middle-Class Tax Cut, the Retirement Income Tax Exemption bill will exempt Wisconsin retirement income from state income taxes up to $150,000 for a couple. This will return an average of $1,582 per filer. While we cannot change the weather, we can change our tax climate and encourage retirees to spend more time in Wisconsin rather than fleeing for six months and a day to become Florida or Tennessee residents where there is no income tax.

The Child Care tax credit bill increases the credit to 100% of the federal credit and increases the maximum amount of allowable expenses to $10,000 for one child and $20,000 for two or more children. This tax relief will go right to parents. If the family’s child care provider raises their rates, parents will be able to accommodate the change.

Finally, our Married Couple tax credit bill will increase the maximum credit from $480 to $870. This increase will give families more resources to adjust to our changing economy.

Wisconsin can afford significant tax cuts. We have nearly $4 billion sitting in surplus after meeting our obligations and funding our priorities in the most recent state budget. We are cutting taxes for most Wisconsinites. This is good for families, individuals, workers, retirees and everyone in between.

I am hopeful that the Governor will work with us to provide significant tax relief to the people of Wisconsin. We owe it to our taxpayers to return some of the surplus to them as they continue to weather a difficult economy.

As always, please do not hesitate to connect with me to provide input, ideas or to seek assistance.  Send an email to sen.marklein@legis.wisconsin.gov or call 608-266-0703. I want to hear from you.