Friday, October 31st, 2014

Tax cuts, tax hikes? How much and when?

Taxes have been in the news a lot in Wisconsin in recent days.
Taxes have been in the news a lot in Wisconsin in recent days.

Not that they’re ever far from mind, but taxes have been all over the news in Wisconsin in recent days.

Late last week, Gov. Scott Walker said he would reveal plans for cutting taxes for the third time in less than a year when he gives his State of the State speech on Jan. 22, 2014.

Those plans are being made possible in part by new estimates which project that, through the summer of 2015, the state will collect $912 million more in tax revenue than had been expected.

Just ahead of those announcements, we rated claims about Walker and Wisconsin taxes that were made by two leading Democrats.

A $1.60 per week tax cut?

State Sen. Kathleen Vinehout of Alma, who decided last week not to run for governor in 2014, took aim at a $650 million state income tax cut adopted by Walker and the Republican-controlled Legislature.

She said that "if you make the average amount of people in Wisconsin -- $50,000 -- you got $1.60 less a week in taxes" and "it didn’t show up in your paycheck."

We rated that Mostly True.

The average income Vinehout cited is slightly high, but within reasonable rounding range. The dollar amount saved is on target or very close to what she said, with the caveat that the analysis she used is set up for income ranges rather than a precise income.

And Vinehout was right that the tax cut did not just show up in workers’ paychecks. Due to inaction by the state, taxpayers must instead get the money through income tax refunds or by filing new withholding forms with the state.

Walker has said he will outline in his State of the State speech a property tax cut and a decrease in how much is withheld in income taxes from workers' pay throughout the year. The withholding changes would mean that Wisconsin residents would see more money in each paycheck upfront rather than in their spring income tax refunds.

A Walker tax hike?

Mary Burke, the Madison School Board member who’s running for governor, seized on comments Walker made several weeks ago about possible tax reforms. She claimed Walker has outlined a plan to eliminate the state income tax and more than double the state sales tax, resulting in higher overall taxes for nearly 80 percent of taxpayers.

We rated the claim Pants on Fire.

Walker has said he wants to explore the possibility of eliminating the state income tax, which likely would trigger some increase in the state sales tax.

But he has not advanced a plan to eliminate the income tax, nor to raise the sales tax by any particular amount, and he has discussed exempting essentials such as clothing from the sales tax.