Democratic gubernatorial nominee Tony Evers is proposing a 10 percent tax cut for low- and middle-income taxpayers, saying it’s part of a plan to give them tax breaks instead of corporations and the wealthy.
In a brief overview of his plan provided exclusively to the Wisconsin State Journal, Evers said he would pay for most of the $340 million proposal by scaling back a tax credit for manufacturers and agricultural producers.
The proposal calls for tax cuts for individuals making no more than $100,000 a year and families making no more than $150,000.
It comes as Gov. Scott Walker has tried to cast Evers in recent campaign ads as eager to increase taxes.
Under the plan, Evers’ campaign said 86 percent of Wisconsin’s income tax filers — those below the $100,000 individual or $150,000 family annual income threshold — would see an across-the-board 10 percent cut in the amount of income taxes they pay.
Evers did not specify how he would change the state’s tax code to provide the cut.
“For eight years Scott Walker has rewarded the wealthy and the special interests,” Evers said. “That’s not fair. It’s time the middle class gets a break.”
Walker’s campaign responded by noting he has a track record of cutting taxes as governor, while Evers is “actively campaigning on an agenda” of raising them.
Evers has been open to increasing the state gas tax to fund road improvements and wants to raise limits on how much school districts can increase their property tax levies.
“Hard-working families won’t be fooled by last-minute media stunts attempting to erase this fact,” Walker spokesman Austin Altenburg said.
Evers’ campaign said he’s open to giving the tax cut through a tax deduction or by cutting or changing tax rates. He would work with state revenue officials to determine the best way to implement it as part of his first budget proposal in early 2019, his campaign said.
Evers said the tax cut would be done “without adding to the deficit by cutting wasteful spending, ending duplicative programs, and phasing out Walker’s millionaire and corporate welfare giveaway.”
The latter refers to the manufacturing and agriculture tax credit, which — after being adopted in 2011 and phased in from 2013 to 2016 — has virtually eliminated income tax liability for manufacturers and agricultural producers that claim it. Eligible individuals and businesses may claim the nonrefundable credit for 7.5 percent of eligible income from manufacturing or agricultural production.
Evers’ plan calls for capping the credit at $300,000 in annual income. He has called the credit a “handout” for “wealthy corporate interests” while emphasizing nearly 80 percent of its benefit goes to filers, including individuals and businesses, making more than $1 million a year.
The nonpartisan Legislative Fiscal Bureau estimated last year the credit would reduce state tax revenues by $334 million in the 2018-19 fiscal year. Evers’ plan would eliminate nearly 90 percent of the credit’s cost to the state, reducing it to about $40 million a year, his campaign estimates.
According to previous Department of Revenue projections, 11 taxpayers who made $35 million or more were expected to reap $21.5 million total from the credit last year. Those earning more than $1 million were projected to get 77 percent of the credit’s benefit.
Walker has cast the credit as key to the state’s recent growth in manufacturing employment and said 88 percent of its beneficiaries are small businesses.
“If we were to wipe that out, we would be taking out a lot of the growth and prosperity in this state,” Walker told Wisconsin Manufacturers and Commerce at a recent event.