MADISON, Wis. (AP) – The average taxpayer who owns a typical home would save $177 under Gov. Scott Walker’s property and income tax cut proposal, a new analysis of the plan released Tuesday by the nonpartisan Legislative Fiscal Bureau shows.
The memo comes as lawmakers continue to digest Walker’s $504 million tax cut plan, which he unveiled last week in his State of the State speech. The tax cut is made possible by a budget surplus that’s $912 million more than originally estimated.
Some Republicans in the Senate are questioning whether to go along entirely with Walker’s tax cut plan, because it would increase the state’s projected budget shortfall by about $100 million to $807 million.
Democrats, who don’t have the votes to stop it, also have criticized increasing the state’s structural deficit. They also have said the proposed tax cuts don’t go far enough to help middle-class and poor people, particularly those who don’t own homes or have no income tax liability.
The Legislature is expected to act on Walker’s plan in the coming weeks.
The Fiscal Bureau memo shows that the average income tax cut for all filers would be $46. The owner of a median-valued $151,000 home would save $131 under the plan.
Under current law, property taxes for the owner of a median-valued home are projected to increase by $31. Walker’s plan to replace a portion of the technical college tax levy with state dollars would result in a $100 drop in property taxes, resulting in the $131 savings.
Walker also has proposed cutting the lowest income tax bracket from 4.4 percent to 4 percent. That is applied to the first $14,540 in income for married couples filing jointly, or $10,910 for single people.
The effect would be an average savings of $46 for all tax filers, or $55 for a married couple filing jointly. Out of all income tax filers, 71.5 percent would see a tax decrease, the memo says. The average percentage decrease for all filers would be 1.3 percent, but that varies widely based on income.
Those who earn between $15,000 and $20,000 would see the biggest percentage decrease in their taxes, at 10.4 percent. The reduction for the wealthiest tax filers, those who make more than $300,000, would be the smallest, at .07 percent.
Walker also is updating income tax withholding tables to put more money into paychecks starting in April, rather than having more it come back as a refund next year. The typical family of four is estimated to see $58 more in their paychecks starting in April, based on estimates by the state Department of Revenue.
The department released updated withholding tables Tuesday. Taxpayers can have less withheld than the tables provide if they expect the amount of tax withheld will be greater than their net tax liability for the year.