Taxes & Spending
High taxes are consistently rated as a major issue for Wisconsin businesses. Lower taxes allow businesses to invest more in their employees and their communities.
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Wisconsin businesses face a number of tax-related challenges:
- The state income tax burden is among the highest in the nation.
- Property taxes in Wisconsin exceed those in most states.
- The taxation of personal property is onerous to comply with.
- Various other state taxes have been added to the cost of doing business here.
Eliminate the Top Personal Income Tax Bracket
Wisconsin’s top personal income tax bracket, currently 7.65%, is the tenth highest such rate in the nation and is a significant contributing factor to keeping Wisconsin on the list of the Top Ten Highest Taxed States. Repealing this bracket would have a significant pro-growth effect on small and medium-sized businesses as they seek to expand investment and employment. Most businesses are organized as pass-through entities that pay personal income tax rather than corporate income tax. The bracket was created by Governor Doyle in the 2009-11 state budget. If repealed, the income of these taxpayers would be subject to the next lowest bracket of 6.27%.
Phase Out the Personal Property Tax
Eliminate the difficult-to-comply-with Statement of Personal Property that every business must file with local governments. Instead, provide a declining aid to local governments to replace the amount that would have been collected from businesses and phase that aid out over a ten-year period. Taxes on personal property have already been eliminated for households and other states in the region are moving to eliminate this tax as well.
Tax Administrative Reforms
To make Wisconsin tax law easier to comply with and ensure fairness for taxpayers, WMC has put forth the following package of reforms for consideration in the 2015-17 state budget.
See WMC’s Tax Policy Toolkit for handouts and details on these issues and more.
- A No-Tax Increase State Budget was adopted for 2011-13 that eliminated a $3.6 billion deficit by paring back government spending.
- The Manufacturers Tax Credit was adopted, which nearly eliminates the tax liability on Wisconsin manufacturing income. The credit phases in beginning in 2013 and takes full effect in 2016.
- A Strong Property Tax Cap that limits future levy growth for local governments to the value of new construction.
- Trapped Losses (i.e., losses incurred prior to 2009 that could not previously be shared under combined reporting) can now be used to offset income of other members of a combined group.
- The Reinvestment of Capital Gains is excluded from taxation if that reinvestment is in aWisconsin business, starting in 2011.
- A capital gains tax Exclusion for Wisconsin Capital Assets purchased during or after 2011 and held for at least five years.
- Adopted Tax Regulatory Reforms providing a more level playing field and greater certainly for taxpayers in interactions with the Department of Revenue.
- The state income tax on Adult Dependent Insurance Benefits was repealed.
Staff Contact: Cory Fish