Tax cuts: What we know about lawmakers' plan

 

MADISON, Wis. (CBS 58) -- A proposed flat income tax by a top Republican received a public hearing Tuesday even though it's doomed for Gov. Tony Evers' veto pen. However, there appears to be growing interest among Republicans on cutting taxes for all income brackets.

Senate Majority Leader Devin LeMahieu (R-Oostburg) said he knows he has the "wrong governor" to enact his plan that would phase in a flat tax rate, but he's remaining optimistic and added many Republicans are in favor of providing tax relief to all income earners.

"Generally, I think both caucuses are supportive of reducing all tax rates," LeMahieu told reporters. LeMahieu believes there's enough support to pass the first two years of his flat tax proposal, which does include tax cuts for all income brackets, but doesn't fully implement a single tax rate. "I'm hoping as we start the budget process the governor is willing to work with us," LeMahieu said. "It's going to take compromise on both sides."

Evers, who's pushing his proposal that would target tax relief to low and middle-income earners, said he appreciates LeMahieu's willingness to find consensus.

"I look forward to seeing it," Evers said.

Democrats and Republicans have criticized LeMahieu's proposal that would benefit the wealthiest Wisconsinites, according to a report by the nonpartisan Wisconsin Policy Forum.

Moving towards a flatter tax code is an idea Republicans are still in favor of, but Assembly Speaker Robin Vos said a flat tax is not going to happen this year and the co-chairs of the GOP-controlled Joint Finance Committee don't plan on including one in the state budget.

Vos said discussions on tax cuts are ongoing and he wants the final proposal to be a centerpiece of the state budget.

"I want a package that will actually become law," Vos said.

Over the next several months, the Republicans on Joint Finance will rework the budget to their liking and then vote on it sometime this summer.

Evers proposed a 10% tax cut for individuals earning less than $100,000 and families less than $150,000, but Republicans rejected it.  

Lower income earners would benefit more from Evers' plan, but Wisconsinites who make more than $1 million would see an average tax increase of nearly $40,000, according to estimates by the Wisconsin Policy Forum.

Under LeMahieu's proposal, the wealthiest earners could see an average tax cut of over $100,000.

Neither plan is likely to become law, but both sides do agree on using a portion of the state's projected $7.1 billion to issue tax relief.