The Joint Committee on Finance hosted a public hearing Tuesday afternoon allowing legislatures on both sides of the aisle to address their concerns regarding a proposed middle class tax cut at the Capitol.
The Republican-authored bill intends to increase the standard deduction for those in the middle class to simplify the tax code and decrease withholding tables. The funding for this bill would come from a $588 million GOP surplus, which would be used to give tax returns to those who make up to $100,000 dollars per year.
“We are in a fiscal position that enables us to even be talking about this,” said co-author and JCF Chairperson Rep. Marklein, R-Spring Green. “If it weren’t for the surplus that has been accumulated, we wouldn't be here with anything.”
However, many Democratic representatives are weary of the legislation — questioning its long-term sustainability and independence from Gov. Tony Evers’ upcoming budget, which will be presented in about three weeks.
The latter concern was a large topic of conversation throughout the hearing since the governor himself has proposed a very similar bill. However, Gov. Evers’ middle class tax cut does not employ money from the GOP surplus; rather, it raises taxes on farmers and manufacturers across the state.
Rep. Peter Barca, D-Kenosha, defended Gov. Evers' version of the bill by stressing that although it would increase the taxes for those in agriculture and manufacturing, the first $300,000 dollars of income earned are exempt, which would yield little implications.
Due to the comparability, senators and representatives from both sides of the aisle showed interest in working together to create one bill, some believing this is what the taxpayers themselves want.
“The whole idea of this last election was that our constituents said, 'We want you to work together,' and I think that’s something we could certainly do,” stated Sen. Janis Ringhand, D-Evansville.
However, the chances of this happening seem slim, as neither side proposed a solution to combine the proposals.
Majority Assembly Leader Robin Vos, R-Rochester, stated he will put his foot down on “any bill that raises taxes at all, period.” Vos said he would like to see a bill that cuts taxes for everyone across the board but believes his middle class tax cut is still a win since it impacts the majority of filers.
“This bill delivers the tax cut Gov. Evers proposed without raising taxes on anyone, and instead utilizes the surplus created through the hard work of my colleagues and Gov. Walker,” stated Vos. “This tax cut is a win for taxpayers, a win for Governor Evers and, most importantly, a win for all of us in the legislature.”
Democratic representatives, including Sen. Chris Larson, D-Milwaukee, further challenged the GOP bill, questioning why the surplus would be used for tax returns, rather than to support government spending for expenses like infrastructure, early childhood education and the opioid crisis.
However, Vos defended this use, claiming one of the state’s biggest problem lies in overspending.
“I don’t think this bill spends anything; I think this bill returns money to the taxpayers that sent it to us in the first place,” stated Vos.
Overall, both Republicans and Democrats alike agreed on the value of giving relief to those within the middle class in order to benefit the state’s economy.
“Challenge me if I am off-base, but what made America and Wisconsin the economic envy of the world was having a strong and vibrant middle class … because by having that is what gives us the strong economic power to buy the goods and services to support small businesses,” stated Barca.
