Impact of Capital Gains Tax Increase
The Majority Senate Democrats’ plan to eliminate the state tax exclusion on capital gains would cost Wisconsin taxpayers $315 million over the next two-years. Governor Doyle had proposed reducing the exclusion from 60% of gains to 40% in the budget he presented to the Legislature in February. When the Governor’s proposed change is added to the Senate Democrats’ proposal, $485 million in additional taxes would be taken from Wisconsin investors. If enacted, this change would be retroactive to January 1, 2009.
Punishing Wisconsin investors during an economic downturn is exactly the wrong prescription to balancing our state's budget. As an increasing number of taxpayers utilize their retirement investments in response to decreased income during the current economic slowdown, we should not be raising the taxes on capital gains. Small businesses - the lifeblood of our economy - would also be hit especially hard with such a tax increase.