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Wisconsin Tax Burden Falls to Lowest Level Since Great Recession

By Wisconsin Taxpayers Alliance

Badger taxpayers have some good news this holiday season, according to the Wisconsin Taxpayers Alliance (WISTAX). In analyzing U.S. Census figures just released for 2013 (these data always lag two years), the nonpartisan research organization found state-local taxes here claimed 10.9 percent of income and ranked 15th, the lowest they’ve been since tax collections were depressed during the 2007-09 recession. If various government fees are added to taxes, the state’s rank was even lower at 18th.

WISTAX found that Wisconsin ranked lower than new federal data initially suggested. According to U.S. Census figures, Wisconsin taxes claimed 11.3 percent of income and ranked 11th highest, up one notch from 2012. However, since at least 2009, federal officials had been double-counting some property tax credits. Correcting for the technical error, WISTAX found the state ranked 15th in 2013, and not 11th.

The only individual tax affected was the property tax, which the Census thought claimed 4.4 percent of income and placed seventh, which would have been the highest ranking in more than a decade. In reality, after the WISTAX correction, the burden was actually 3.9 percent of income, and 10th among the states.

Besides the property tax, Wisconsin’s other high-ranking tax is the individual income tax, which claimed three percent of income and also ranked 10th. Both taxes were about 18 percent to 22 percent above national averages.

The state’s other two major taxes are on retail sales and corporate income. The sales tax burden was two percent of income and 34th highest. The corporate income tax claimed 0.4 percent and ranked 16th.

In its new Focus newsletter, “New Census Tax Figures: Wisconsin Tax Rank Lower Than Thought,” WISTAX points out that this imbalance in the state’s approach to financing public services explains high income and property taxes. Not only are sales taxes below average, the state also ranks relatively low in receipt of federal aid (36th) and user fees (26th), which puts added pressure on the state’s two main taxes.

A copy of the report, “New Census Tax Figures: Wisconsin Tax Rank Lower Than Thought,” is available at wistax.org or by emailing [email protected]; calling 608.241.9789; or writing WISTAX at 401 North Lawn Ave., Madison, Wis., 53704-5033.

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