Wisconsin’s Tax Burden if $15.2 Billion Tax Increase Passes

June 29, 2007

Earlier this week the Wisconsin Senate passed a $15.2 billion tax increase– which if enacted would be by far the largest tax increase ever enacted by any state. See our blog post about it here.

When states propose tax increases, we are often asked to calculate what their new tax burden would be after the tax hike. We usually resist these requests because it is almost impossible to predict how the state’s tax burden ranking will change because other states are making changes at the same time.

In Wisconsin’s case, however, there was no doubt about how its tax burden would change compared to the rest of the nation.

Wisconsin’s tax burden is 12.3 percent of state income in 2007– ranking it 7th highest in the nation. Wisconsin has ranked in the top ten of our tax burden study every year for the 37 years we have calculated them-from 1970 to 2007. 7th is the lowest rank for Wisconsin since 1980.

However, if the $15.2 billion tax increase were in effect for 2007, Wisconsin’s tax burden would increase to 19.3 percent and rank 1st- 5.2 percentage points higher than Vermont’s 14.1 percent tax burden that currently ranks highest nationally.

If we count the other tax increases passed by the Senate (approximately $1.6 billion more) Wisconsin’s tax burden will be 20.1 percent. To give you an idea of how big that is, the federal government will take 21.7 percent of the nation’s income in taxes in 2007.

If the Wisconsin Senate’s plan becomes law, Wisconsin taxpayers will face the highest state and local tax burden ever, and their tax burden-federal, state and local– will exceed 40 percent of their income.


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