(The Center Square) – The top Republican in the Wisconsin Senate says moving to a flat tax will avoid having to raise other taxes in the state.
Senate Majority Leader Devin LeMahieu is driving a plan that would lower Wisconsin’s personal income tax rate to a flat, 3.25% by 2026.
On Thursday he told News Talk 1130 WISN’s Jay Weber that switching to a flat tax as opposed to eliminating Wisconsin’s income tax altogether will mean keeping other taxes flat as well.
“Moving to no income taxes might require raising the sales tax by a couple percentage points,” LeMahieu said.
Many conservatives in Wisconsin want to see the state erase its personal income tax to compete with states like Texas and Florida.
LeMahieu said Wisconsin’s tax base isn’t like Texas or Florida.
“[Other states] either have a higher sales tax, or they have some source of revenue like oil production or something like that that heavily subsidizes their state revenue,” LeMahieu explained.
Wisconsin is looking at a record $6.6 billion budget surplus this year. LeMahieu has consistently said that is more than enough money to cover the switch to the flat tax for at least the next two years.
After that, he expects the economy to continue to grow. On Thursday he said lowering the state’s income tax could mean more people for Wisconsin, which would mean more tax money.
“It gives us an opportunity to keep retirees here yearlong, have more people move into the state of Wisconsin,” LeMahieu explained. “In the modern economy people can work remotely, so it gives them an opportunity to live wherever they want.
Gov. Tony Evers has already promised to veto LeMahieu’s flat tax proposal. The governor says the 3.25% flat tax would be a boom for millionaires in Wisconsin, but wouldn’t provide tax cuts for lower-earning families.
LeMahieu said while there is broad support among the Republicans who control the legislature to do something about taxes, it’s too soon to tell just what the final tax cut package will look like.
“I’m not sure if this exact plan will end up on the governor’s desk. I felt it was important to start the conversation early in the session because I knew there would be criticism,” LeMahieu added. “I felt it was good to show that there actually is a way to get to a flat tax in Wisconsin. Map it out early. Start the discussion early. Get the assembly on-board.”
LeMahieu introduced his flat tax legislation this week. He’s not saying when it could come up for a vote.