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Tax Cut Package Take Two 🎬
After the Governor vetoed a healthy portion of the tax cut package in the budget, Republicans have endorsed and released a second version for action this fall. The bill, AB 386, lead by Representative Steffen (R-Green Bay) and Senator Cabral-Guevara (R-Appleton) decreases income taxes for Wisconsin's third tax bracket from 5.3 to 4.4 percent starting in tax year 2023. This reduction impacts a large bracket of individuals making $27,630 to $304,170 in annual taxable income or joint filers making between $36,840 to $405,550. Republican's contend that the package impacts the middle class with inflationary relief. The $2.9 billion plan utilizes the state surplus to provide and average tax reduction of $772 per filer.
AB 386 increases and expands the individual state income tax subtraction for payments or distributions received from qualified retirement plans or certain individual retirement accounts beginning in tax year 2023 for those of 67 years of age. Under the Republican's plan up to $100,000 or $150,000 (for joint filers) of payments or distributions received may be subtracted annually from an individual's (or combined) taxable income. Representative Steffen, a lead author of the bill, stated that AB 386 will "help our fixed-income retirees retain more of their retirement savings and ultimately to give them the financial freedom to stay here in Wisconsin."
AB 386 was introduced on August 29th and received a public hearing in the Assembly Ways and Means Committee the next day. The bill is on a fast track this fall and will likely be on the floor in September.
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