Gov. Evers, Republicans offer competing income tax cut plans

Governor-elect Tony Evers

MADISON — Wisconsin Gov. Tony Evers and Democratic lawmakers unveiled an income tax plan Tuesday, minutes before a public hearing on a competing Republican proposal that’s moving quickly through the Legislature.

Evers all but promised to veto the Republican plan, while GOP lawmakers don’t want to reduce a manufacturing and agriculture tax credit program as the governor proposed to partially pay for his plan. That’s a recipe for stalemate, even though Evers and Republicans agree on wanting to cut taxes for the middle class.

Republicans would tap a budget surplus to pay for their $340 million annual tax cut. Evers would cut taxes by about $415 million and expand the earned income tax credit, with about half of the cost covered by capping benefits to manufacturers under the tax credit program.

His plan does not say where the remaining $370 million would come from to pay for his plan over two years. Democratic lawmakers said that could be worked out in the context of a larger debate over state budget priorities.

The Republican proposal calls for increasing the maximum deduction by 20.6 percent for single people making less than $127,000 and joint filers making less than $155,000.

The average decrease for all filers would be $170, according to the nonpartisan Legislative Fiscal Bureau. Evers’ office said the average tax cut under the governor’s plan would be $225 for all filers.

The Evers plan would create a 10 percent refundable tax credit for single filers earning below $80,000 a year and married-joint filers making less than $125,000. That credit would gradually phase out for single-filers earning up to $100,000 and married-joint filers up to $150,000.

Evers also wants to increase the child credit for poor people who qualify for the earned income tax credit. Evers wants to increase it from 4 percent to 11 percent for one child and from 11 percent to 14 percent for two children.

That move would cost the state about $26 million a year.

To help pay for it, Evers would limit to $300,000 the amount of qualified income manufacturers can claim for a credit. Agriculture firms would still be eligible. That would save the state around $230 million each of the next two years.

Democratic lawmakers were introducing the idea as an amendment to the Republican plan. The Assembly Ways and Means Committee planned to vote Wednesday on advancing the bill, likely without any of the changes Evers and Democrats want.

Evers told reporters Tuesday, just ahead of the Republican-called hearing, that he can’t support their bill because the GOP has no plan for funding the cuts long-term. The surplus dollars the GOP wants to use is needed to cover other things and his way is “far superior,” Evers said.

“I don’t think I could possibly sign a tax cut of that type where the money going forward is not there,” he said.

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