Walker's tax cuts, how will they work?
MADISON- Immediately following the State of the State speech, the Governor didn't waste any time calling lawmakers into special session on Thursday so they could start working on his \"Blueprint for Prosperity.\"
The plan is the centerpiece for hundreds of millions of dollars in cuts to property and income taxes.
The governor wants to put $800 million dollars back in the hands of tax payers.
CBS 58 spoke to a private government research organization for answers on how significant these changes really are for those tax payers.
Walker's plan has three major points.
First, he wants to reduce property taxes by $406 million.
The idea is that the average homeowner will see a $101 reduction in their property tax bill.
Todd Berry, President of Wisconsin Taxpayers Alliance, said the downside is that you effectively spending money in order to buy down the property tax which creates another budget obligation.
However, it can work and this is a strategy also used by former Governor Jim Doyle.
The second point is to reduce income tax by $98.6 million.
The Governor sees this as a way to give tax relief to the lowest tax bracket with a $58 savings for an average $40,000 per year family.
Berry said it's not a huge cut and will eventually be judged by the individual tax payer with how it affects their lives.
Finally, Walker directed Revenue Secretary Rick Chandler to adjust withholding for state income taxes by $322.6 million, so you can keep more of your hard-earned paycheck.
For Berry, this is a long overdue move for the state and a no brainer.
\"It's not a bad idea to say, OK, we wont take it to begin with, and then give it back to you as a refund later, we just wont take it, it's not a tax cut, but it will put money in your pocket,\" Berry explained.
Overall, this is not a radical plan by Governor Walker, but berry cautions for potential pit falls like cutting taxes so much that there's no wiggle room.
Berry also said only one thing that confused him about the governor's plan is that by incrementally making tax cuts, will this make major tax reforms less likely in the future?
Something the governor has hinted at before, like getting rid of state income tax.