MADISON – Wisconsin Manufacturers & Commerce (WMC) – the combined state chamber and manufacturers’ association – called on lawmakers Tuesday to fuel Wisconsin’s economic growth by giving taxpayers their money back.
Following the release of new budget projections that show the state would end the 2021-23 budget with a $5.8 billion surplus, WMC urged members of the legislature and Gov. Tony Evers to prioritize tax relief for individuals and employers – many of whom are still struggling following the biggest economic downturn in a century.
WMC also thanked members of the legislature for making tax relief a priority over the last decade and was encouraged by statements from Republican leaders on Tuesday that said they would continue these efforts.
“While we have made considerable progress over the last decade, Wisconsin is still a high tax state – which hurts our ability to attract the best talent,” said WMC Executive Vice President of Government Relations Scott Manley. “If we want to recruit people to Wisconsin, we need a tax climate that is inviting. Lawmakers should take advantage of this opportunity by providing substantial tax relief to hard-working Wisconsinites.”
Specifically, WMC is calling for:
Eliminating the Personal Property Tax
The personal property tax is charged on the value of certain “personal property” of businesses, from phones to forklifts. It is one of Wisconsin’s oldest taxes and over the last 170 years, the legislature has created a myriad of exemptions resulting in uneven enforcement, frequent audits and litigation. For many small businesses, complying with the recordkeeping costs associated with the tax can be more expensive than the tax itself. It is time to repeal this tax just like Iowa, Illinois, Michigan and Minnesota have already done.
Learn more about the personal property tax by clicking here.
Expanding the Refundability of the R&D Tax Credit
One way to both alleviate businesses’ tax burden while attracting highly-skilled workers to the state is to revitalize Wisconsin’s Research & Development Tax Credit. The R&D Tax Credit is structured in a way that it requires continued growth and investment in Wisconsin. However, due to its current largely non-refundable structure and economic circumstances, the R&D Tax Credit has become nearly useless to many companies looking to invest in R&D activities in Wisconsin. Expanding the credit – as proposed by the governor – would allow businesses to invest more in highly skilled and highly paid careers here instead of other states.
Learn more about the R&D Tax Credit by clicking here.
Reducing the Individual Income Tax
Unfortunately, Wisconsin’s top tax rate of 7.65 percent is one of the highest in the country – 11th worst to be exact. This not only makes the state less attractive to people who may move to Wisconsin, it hurts the majority of small businesses who pay the individual income tax as pass-through entities. By lowering rates across the board, Wisconsin will be on better footing to recruit talent, while also helping small businesses invest in themselves instead of being hit with a big tax bill each year.