Tim Michels proposes possible flat income tax in Baraboo ruling

BARABOO — GOP gubernatorial candidate Tim Michels told supporters in a crowded tavern on Tuesday that he was prepared to consider a flat income tax if elected this fall.

Michels, who faces Democratic Governor Tony Evers on November 8, attended the event at the Square Tavern to accept an endorsement from the powerful Tavern League of Wisconsin. Michels, the co-owner of Brownsville-based Michels Corp., said “inflation is spiraling out of control” and pledged to implement “massive tax reform” by lowering income taxes and eliminating the business property tax.

“I’m going to sit down with all the savvy tax people. We’re going to figure out how far we can get the income tax,” Michels said when asked if he would support a flat income tax. “Right now it looks like we can get it down to around 5%.”

While governors have little impact on inflation, Michels and Evers have proposed cutting taxes as a way to ease the burden of high costs on residents. Evers, who is seeking a second term this fall, renewed his call in August for the GOP-led Legislature to use part of the state’s projected budget surplus to cut taxes and reduce fuel prices by repealing the minimum state mark-up on gas, among other measures.

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Legislative leaders dismissed Evers’ proposal as “a tax gimmick.” Republicans aim to unseat Evers this fall, with plans to pass their own tax cuts in the next legislative session under a Republican governor.

Evers also signed the state’s 2021-23 biennial budget last summer, which included more than $2 billion in GOP-signed income tax cuts.

Some legislative Republicans, including Senator Roger Roth, a candidate for lieutenant governor, have called for the complete elimination of Wisconsin’s income tax, the nation’s oldest, to make Wisconsin more attractive to people. foreign talent.

A December report from the conservative Wisconsin Center for Economic Research, which has been hailed by Republicans including former Gov. Scott Walker and several business groups, raised the idea of ​​raising the sales tax 5% to 8% to cover the reduction. tax revenue caused by the abolition of income tax.

Democrats and groups such as the Wisconsin Budget Project have said eliminating the progressive state income tax while increasing the sales tax would shift the tax burden from the wealthy to those with low incomes and moderate.

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Wisconsin’s more than 170-year-old personal property tax, which businesses pay on furnishings, tools and equipment, has also been a common topic of discussion in the state.

Last summer, Evers vetoed a bipartisan bill to formally scrap the tax, noting in a veto message that he opposed the “unusual and haphazard” process that Republicans in the Legislative Assembly were using to eliminate the tax, which he said could have unintended consequences on railroad and utility taxes, as well as state credit for manufacturing and agriculture.

But Evers has withheld in the 2021-23 biennial budget more than $200 million in additional assistance to local governments that could be used to offset lost tax revenue if the personal property tax is removed at some point, and he provided the Republicans with a model for doing that.

Republicans in the Legislative Assembly have never embraced this model, however, with Sen. Duey Stroebel, R-Saukville, the lead author of the Evers bill vetoed last summer, accusing the governor of of having “added poison pill provisions to appease the left and serve as political cover for those who don’t pay attention.”

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