Wisconsin’s state and local taxes down again as share of income

For the eighth straight year, in 2019, Wisconsinites paid a smaller share of their income in state and local taxes, dropping this measure of tax burden to its lowest in half a century.

The reduction occurred at the same time state and local tax revenues increased by 4.5 percent in the fiscal year, ending June 30, 2019, the biggest percentage increase since 2011, and nearly double the rate of increase in 2018.

Yet the tax burden still fell, because Wisconsinites’ incomes grew more quickly. Total personal income, which includes wages and salaries, investment income and government benefits, rose 5.1 percent to nearly $300 billion in calendar year 2018, the most recent year available. This left residents paying 10.3 percent of income in state and local taxes last year, down from 10.4 percent in 2018.

This share has declined each year, since 2011, and has been on a largely downward trajectory since the mid-1990s. It now is at its lowest point in Forum records, going back to 1970.

In 1994, Wisconsinites paid 13.2 percent of their income in state and local taxes, meaning that in 2019, they paid about 22 percent less. If state and local taxes in 2019, accounted for the same share of personal income in Wisconsin as in 1994, those taxes would have been nearly $8.5 billion higher. However, that hypothetical number assumes that higher taxes and spending would not have affected Wisconsinites’ total income, which is highly unlikely.

In 2019, the growth in state and local taxes was mostly because of an increase in state collections, which rose by 6 percent overall. Corporate income tax revenues rose by nearly 50 percent, the biggest annual increase in decades, thanks, in part, to changes in federal tax law. Individual income taxes, the largest state tax, increased by 6.1 percent.

This information is a service of the Wisconsin Policy Forum, the state’s leading resource for non-partisan state, and local government research and civic education.

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The hardest of all is learning to be a well of affection and not a fountain; to show them we love them not when we feel like it, but when they do.

~ Nan Fairbrother

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