Gov. Evers used his first veto on a Republican middle-class income tax cut bill Wednesday, rejecting the GOP plan to use money leftover in the budget.
Both Evers and Republicans want to cut income taxes for the middle class, but Evers turned down using the budget surplus to pay for it. Instead, he is expected to introduce his own income tax plan next week that would eliminate a manufacturing tax credit program to cover half the cost.
Speaker Robin Vos, R-Rochester, opposed Evers’ veto, saying he “expected more from someone whose first speech included a promise to work together.”
“Unfortunately, Governor Evers is starting to show his true colors,” Vos said in a press release. “Only a Madison liberal would believe the only way to cut taxes is to raise taxes on others.”
The GOP tax cut bill would rely on revenue growth in the future. Director of the Center for Research on the Wisconsin Economy Noah Williams worries that the current cash surplus will not remain in future years.
Williams said that the credit limitation would be severe to employment in the state, but said there is a tradeoff between both plans.
“It’s really a tradeoff of would these cash surpluses be sustainable versus having a current increase on business taxes,” Williams said.
Evers’ plan would increase the earned income tax credit, which would offer low-income families with more tax breaks. Senate Majority Leader Scott Fitzgerald, R-Juneau, challenged Evers’ elimination of the tax credit for manufacturers.
"Let me be clear with the governor: I will not support raising taxes on our state's job creators,” Fitzgerald said in a press release. “With our economy expanding and the state running a surplus, we shouldn't be introducing uncertainty into the industries fueling Wisconsin's comeback."
The state budget will be introduced next week. Vos said it’s “too early to tell” if legislators will try to override Evers’ veto.
