State House Republican leaders said Tuesday they want to use the record budget surplus to enact “transformational, once-a-year tax changes,” including lowering the taxes on the wealthiest residents of the state.

But the proposal is likely a non-starter with Democratic Gov. Tony Evers, who signed the Republican-authored tax cuts last year but has his own ideas for tax cuts on the next budget.

The comments by House Speaker Robin Vos, R-Rochester, and Senate Majority Leader Devin LeMahieu, R-Oostburg, were the latest sign that the government has been divided for four years. from may be the same as in the last four where GOP legislators often. opposite Evers. They could also be a sign that when it comes to the next state budget, the money will cause more problems.

The Department of Administration Evers announced Monday that the state is expected to end the current two-year budget with a large surplus, $6.6 billion. That amount is on top of an additional $1.7 billion in the State Budget Stabilization Fund, often referred to as the rainy day fund. That means when Evers and lawmakers draft their next budget, they’ll start with money in the bank.

Speaking at the Wispolitics forum in Madison, LeMahieu was asked if he would use the surplus to move toward a flat tax, where taxpayers pay the same tax rate regardless of income. – money.

“Yes,” LeMahieu replied. “That way, all taxpayers get a discount. But we really need to lower the maximum rate.”

Vos said the House Republicans will focus on recovering money that was “excessively” from taxpayers.

“I think it’s fair to say that our priority is to reduce taxes as much as possible,” Vos said. “The second is to keep the money in the account. I prefer to keep it in the account that expands the size of the government.”

Vos said the third option would be a “loss” where nothing happens. If Evers and the Republicans do not agree to a new budget, the current budget will continue, and the surplus will not be used.

The move to a flat tax is a surprising step in Wisconsin, the state where the progressive tax was born.

Under Wisconsin’s income tax, people earning up to $12,760 are taxed at a rate of 3.54 percent, people with income between $12,760 and $25,520 are tax at a rate of 4.65 percent, and people earning between $25,520 and $280,950 pay a flat rate of 5.3 percent. . The wealthiest residents – people who earn more than $280,950 – pay a tax of 7.65 percent.

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While GOP lawmakers have worked to reduce the low rate, they have left the top tax rate untouched. LeMahieu said Tuesday is the time to change that.

“You know, we’re kind of an island with the highest tax rate here in Wisconsin,” LeMahieu said. “We need to drive it out.”

The discussion on how to manage the projected surplus is reminiscent of what happened before the last budget debate two years ago, but this time it is on a much larger scale.

In early 2021, as the impact of the pandemic began to subside and federal aid continued to flow to Wisconsin, the state’s budget surplus increased. GOP lawmakers reworked the budget to add the income tax that Evers approved, surprising many Capitol observers.

During his gubernatorial campaign this year, Evers called on lawmakers to return some of the money to taxpayers because of the projected increase in the budget surplus. Asked about LeMahieu’s comments Tuesday, a spokeswoman for Evers pointed to details of the governor’s plan released in October, which included a 10 percent tax cut for low-income earners. the $100,000 per year.

Evers’ office also pointed to the governor’s education budget released in September, which calls for a $2 billion increase in public schools. Vos said he could support an increase in public school funding but only if it is combined with an expansion of the private school program.

Evers has previously expressed skepticism about the move, saying last week that he could not consider signing a budget that would lower the state’s top tax rate.

Vos and LeMahieu said Evers has called them both since he won re-election, a gesture they said was positive.

“Gov. Evers and I talked for five minutes,” Vos said. “It’s great because it’s five minutes more than the last two years.”

Vos, who won re-election after a tumultuous first term that saw him deal repeatedly with former Republican President Donald Trump, was also asked Tuesday if he planned to run again in 2024. He said Evers’ defeat of Republican challenger Tim Michels was one factor.

“I’ll be honest and say that if Tim Michaels had won, I would have thought about walking off into the sunset,” Vos said. “Now we have Tony Evers. Obviously I’ll make a decision in the future. But I’m planning on it now.”



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