Monday, April 18, 2011

Fiscal Bureau Confirms Tax Increases In Walker's Proposed Budget

Some of us have been saying for some time that Scott Walker's "no-tax-increase" 2011-2013 proposed state budget in fact raises incomes taxes on some lower-income taxpayers, and now the non-partisan Legislative Fiscal Bureau confirms it.

The information is towards the end of a Journal Sentinel budget story.

Note how neatly the Republicans say this tax increase is not a tax increase.

Walker's proposal would increase taxes by $49.4 million for low-income people, according to the fiscal bureau.
For years, the working poor who have children have qualified for a state income tax credit that is meant to boost their wages and offset Social Security taxes and other taxes they pay. Walker's proposal changes the formula so those workers would receive less in credits.
Those who qualify for the program can get money from the government even if they have no state income tax liability. According to the fiscal bureau, 77% of those who qualify for the credit do not owe any state income taxes and get a check from the state.
The remaining 23% owe state taxes and the credit lowers their liability. Under Walker's plan, they'll get less of a credit - and thus owe more in taxes.
[State Rep. Robin] Vos said he did not view that as a tax increase because it is a tax credit program, echoing past comments from the governor. Walker pledged during the campaign not to raise any taxes.

1 comment:

Anonymous said...

Hmmmmm... The EITC is redistribution because it takes money from other taxpayers and gives it to people who otherwise have no tax liability.

I just wonder when someone is going to point out to Rep. Vos and the Governor that if the EITC is wealth redistribution because it is a refundable credit, then so are the Enterprise Zone Jobs Tax Credit, the Jobs Tax Credit, and any number of other refundable corporate credits that have been passed in recent sessions.

It's an impressive list of credits passed in just the last couple of sessions. In addition to the two above, off the top of my head there are also:

Woody Biomass Harvesting and Processing Credit

Meat Processors Credit

Dairy Manufacturing Facility Credit

Dairy Cooperative Manufacturing Facility Credit

Food Processing and Warehousing Credit

Beginning Farmer and Farm Asset Credit