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Wisconsin Introduces Bill to Create New Upper Income Tax Bracket

1 min readBy: Scott Drenkard

Introduced October 28, Wisconsin Assembly Bill 343 would create a new 8.75 percent tax bracketA tax bracket is the range of incomes taxed at given rates, which typically differ depending on filing status. In a progressive individual or corporate income tax system, rates rise as income increases. There are seven federal individual income tax brackets; the federal corporate income tax system is flat. for income earned above $1 million. From the bill:

For taxable year 2012 and thereafter, this bill creates a sixth bracket with a taxation rate of 8.75 percent. For single individuals, certain fiduciaries, and heads of households, this bracket applies to taxable incomeTaxable income is the amount of income subject to tax, after deductions and exemptions. For both individuals and corporations, taxable income differs from—and is less than—gross income. exceeding $1,000,000. For married persons, this bracket applies to taxable income exceeding $1,000,000 for joint filers and $500,000 for separate filers. This bracket is indexed for inflationInflation is when the general price of goods and services increases across the economy, reducing the purchasing power of a currency and the value of certain assets. The same paycheck covers less goods, services, and bills. It is sometimes referred to as a “hidden tax,” as it leaves taxpayers less well-off due to higher costs and “bracket creep,” while increasing the government’s spending power. .

22 Assembly members signed on as sponsors of the bill, and 8 signed on as co-sponsors. The bill, which has been talked about since early October, would also authorize the Wisconsin Technical College System Board to fund grants for technical degrees. The bill states that these grants will “assist in reducing unemployment.”

Wisconsin’s individual income taxAn individual income tax (or personal income tax) is levied on the wages, salaries, investments, or other forms of income an individual or household earns. The U.S. imposes a progressive income tax where rates increase with income. The Federal Income Tax was established in 1913 with the ratification of the 16th Amendment. Though barely 100 years old, individual income taxes are the largest source of tax revenue in the U.S. currently has five brackets for people filing as singles:

4.6% > $0

6.15% > $10,180

6.5% > $20,360

6.75% > $152,740

7.75% > $224,210

In 2011, Wisconsin ranked 40 overall in the TaxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. Foundation’s State Business Tax Climate Index. Their worst score in the five subindices that make up the index was in the individual income tax category.

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