Gov. Scott Walker’s proposal to cut state income taxes by $332 million over the next two years fulfilled his pledge to lower taxes and help the middle class.
Unavoidably, though, the discussion quickly turned into a “who benefits the most” debate, with Democrats charging the tax cuts disproportionately benefit upper income groups — and not the poor.
A Milwaukee newspaper analysis of Walker’s plan showed that those making more than $100,000 a year would receive just less than half the benefits of the governor’s tax cuts in 2014.
See, a payoff to the rich.
But, coming at it from the other side, the analysis also showed that the biggest percentage of the tax cuts — 3 to 3.04 percent — would go to those earning $20,000 to $50,000 per year. That compares to 2.84 percent for those making $70,000 to $80,000 per year; 2.73 percent for those making $100,000 to $150,000 and 1.9 percent for those making from $250,000 to $300,000. More than that? Just six-tenths of 1 percent.
See, a cut that disproportionately benefits the lower and middle classes.
And the analysis also showed that without the governor’s proposed cuts, the top 20 percent of the state’s income tax payers would shoulder 61.2 percent of the total income tax burden next year.
Depending on your political persuasion, you will probably view the numbers from that perspective.
But the most insightful comment on the proposed tax plan came from Dale Knapp, research director for the Wisconsin Taxpayers Alliance, when he said: “If you’re going to do a tax cut based on rates, almost no matter what you do, the savings are going to accrue more to the top than to the bottom, because (upper-income families) pay more of the income tax.”
The corresponding case is also true, of course. If you increase taxes based on rates, the upper-income groups pay more.
Our take on Walker’s plan is that it’s a good starting point.
When we look at the overall benefits of the cut — an average of $83 for all tax filers — and just $22 for those making $25,000 to $30,000 and $290 for families making more than $200,000 — it will be welcome, no doubt, but it’s not going to jump-start the state’s economy by any means.
As we said, it’s a good starting point. State Rep. Robin Vos, R-Rochester, greeted Walker’s plan saying taxpayers deserve the “largest, most robust tax cut we can afford.” We agree. If state revenue projections continue to rise, we would urge Vos and the governor to boost those tax cuts up and down the brackets to put more money back in taxpayers’ wallets.