Most won't see Wis. income tax cut until next year

2013-07-25T13:00:00Z Most won't see Wis. income tax cut until next yearThe Associated Press The Associated Press
July 25, 2013 1:00 pm  • 

MADISON, Wis. (AP) — The $650 million state income tax signed into law last month won't automatically result in higher paychecks for Wisconsin taxpayers.

That's because the state is not changing the withholding tables that tell employers how much to take out in taxes. Unless taxpayers fill out the necessary paperwork for the lesser amount to be withheld, they won't benefit until they file taxes in 2014.

The state has historically not adjusted withholding tables in order to collect more in taxes to pay its bills during the year, Todd Berry, president of the nonpartisan Wisconsin Taxpayers Alliance, said Thursday.

The average taxpayer has between 15 percent and 25 percent more withheld by the state for income taxes than is necessary, Berry said.

"It's been going on for well over a decade and this really was the golden opportunity to change it," Berry said. "The only reason I can come up with for the fact that they didn't is they want the income tax refund to be bigger next April."

Republican state Rep. Dale Kooyenga, who authored the tax cut proposal, originally called for the withholding tables to be changed. But that was removed as the tax cut worked its way through the Legislature.

Kooyenga said he would love to see the tables changed, but he also understands that doing so would create a cash flow problem.

"I could argue both ways," Kooyenga said.

Gov. Scott Walker pushed for an income tax cut. His spokesman did not immediately return a message Thursday seeking comment on whether he supports changing withholding tables.

Not adjusting withholding will result in a more noticeable tax cut, as the average filer will get $158 more refunded back in 2014 — an election year — as opposed to getting $13 less taken out in taxes each month.

The tax cut was made retroactive to January of this year, which also made it difficult to adjust withholding tables for 2013, Kooyenga said.

The state budget cut rates in all five income tax brackets and compressed them to four. For all tax filers, the average decrease was $158. Those earning $45,000 a year on average would see an $87 reduction, while those earning $125,000 will get a $281 cut.

Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(11) Comments

  1. HankRearden
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    HankRearden - July 26, 2013 9:12 pm
    Well, I hope to if the new tax law works the way they say. Are you jealous or something?
  2. RemoteEmployee
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    RemoteEmployee - July 26, 2013 6:52 pm
    There is no way you are getting an extra thousand dollars. You are dishonest.
  3. Cassandra
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    Cassandra - July 25, 2013 2:28 pm
    In other words, the legislature is giving the state an interest-free loan at the expense of working people.
    Of the corporations, by the corporations, for the corporations....
  4. you think you know
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    you think you know - July 25, 2013 2:24 pm
    The auto registration fee is already $75. The registration for my truck went up to $84 under Doyle, what's your point?

    With vehicles getting better fuel consumption, there is less gas tax collected. Raising the fees for users is the logical way to collect funds. Rather than making people who don't own cars pay for roads and bridges, by collecting funds from the users keeps things 'fair'.
  5. Mind of Minerva
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    Mind of Minerva - July 25, 2013 2:07 pm
    Of course all of these ideas are still "pending" and the most recent info I have found says next to nothing we didn't already know:

    http://www.thewheelerreport.com/wheeler_docs/files/0701wistax.pdf
  6. Mind of Minerva
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    Mind of Minerva - July 25, 2013 2:03 pm
    BTW the rise from $55 to $75 was proposed under Governor Doyle in 2007.
  7. Mind of Minerva
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    Mind of Minerva - July 25, 2013 1:59 pm
    You are right though...the income tax cut is nothing more than lip service to most Wisconsinites.

    Most people don't really understand or know how their taxation works or even what they pay for in most cases...just talk to them or ask them.
  8. Mind of Minerva
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    Mind of Minerva - July 25, 2013 1:57 pm
    That isn't all:

    Transportation proposal highlights

    Revenue:

    • Increase current 51.3-cent gas tax by 5 cents

    • Create a new mileage-based registration fee for passenger vehicles driving more than 3,000 miles

    • Boost cost of 8-year driver's license to $54 from $34

    • Eliminate sales tax exemption on the trade-in value of vehicles

    • $2,000-plus increase in annual registration fees for tractor-trailers


    How the increased revenue would be used each year:

    • $387.1 million: State highway rehabilitation, maintenance and modernization

    • $40 million: Local highways and bridges

    • $36.3 million: Public transit

    • $16.1 million: Airports, rail, harbors, bicycle and pedestrian facilities


  9. Mind of Minerva
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    Mind of Minerva - July 25, 2013 1:55 pm
    Where have you been Nappy? Auto registrations have been at $75 for a couple of years now.

    I'm sure you are referring to the proposal that is on the table:

    How the per-mile fee would work:

    All registrants would pay $75. In addition, those driving between 3,000 and 20,000 miles would be charged 1.02 cents a mile for a maximum $248.40 total fee. Miles above 20,000 would not incur a fee. Owners could either report actual odometer readings or pay the maximum $248.40 fee.

    Source: Wisconsin Transportation Finance and Policy Commission

  10. Napoleon
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    Napoleon - July 25, 2013 1:37 pm
    Re: "Those earning $45,000 a year on average would see an $87 reduction, while those earning $125,000 will get a $281 cut."

    Big fat hairy deal for the low-income folks: your auto registration fee is slated to nearly double, to $75 next year, wiping out a third of the $87 tax cut. More fees are scheduled to rise. Net gain for the average Wisconsinite: near zero or worse. The GOP tax 'cut' is fake, like their balanced Wisconsin budget: creative accounting, to fool the public, to fool you--that's what they do!

    GOP: biased toward the Rich.

  11. Joanne Brown
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    Joanne Brown - July 25, 2013 1:35 pm
    Kooyenga's tax cut did not "work its way through the legislature." It was inserted into the budget bill in Joint Finance after hearings were held. There was no legislative action after that. Because of the Republican refusal to go along with a single common sense Democratic amendment to the budget in the Assembly, the Senate Democrats rightly decided not to prolong the charade and did not offer their own amendment.

    Don't pretend that this "tax cut" had the scrutiny it deserved. It did not.
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