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Walker signs $541 million tax cut plan

Andrew Campnell , News Editor
April 8, 2014
Filed under News, Top Stories

In the wake of a recent economic report predicting a $1 billion surplus, Wis. Gov. Walker signed a $541 million tax cut plan March 24.

Under this bill, the average income tax filer would receive a $46 tax cut in April 2015 and the typical homeowner would save $131 on the current property tax bill, according to the Milwaukee Journal Sentinel.

Also, factory and farm owners’ taxes will lower by a little more than $36 million over the current budget and then $91 million over the next budget.

While many people would consider getting money back from taxes a good thing, some might be upset at the amount they’d be getting back.

Michael Kraft, professor emeritus of political science, said this will be a small cut for most people.

“As usually the case, the amount of the cut will be much more for those at high-income levels and lower at the low-income levels,” Kraft said.

Because of this, some argue the surplus would have been better suited going to other things, David Helpap, assistant professor of political science, said.

Mary Burke, Walker’s opponent in the upcoming election, argued the surplus should have gone to programs that were cut.

“I’m all for tax cuts, but not when they’re done in a fiscally irresponsible manner that jeopardizes the state’s finances,” Burke said in a statement. “Walker’s approach to spending the projected surplus is irresponsible.

Other places some have argued for include schools, higher education and debt reduction, Helpap said.

Aside from that, many democrats feel this surplus should be put back in the reserves until the state’s fiscal picture is clearer, Kraft said. Many republican reactions were the opposite.

“This tax cut is largely a Republican effort to impress the electorate with the econom

ic turn-around they argue that the Governor has brought to the state,” Kraft said.

Depending on what happens in the next few months or so, this tax cut could have a potential effect on Walker’s run for another term as governor, Helpap said.

“If you can tell your constituents and put on a commercial that you gave the citizens a tax cut, this is going to sit well with a lot of voters, right?” Helpap said. “Most people would be hard-pressed to argue against giving money back.”

The cut could play into Walker’s favor, at least until the election, Helpap said. If state finances change over the next fiscal year, this cut may not look as good as it initially did.

Kraft said the cut was more or less designed to raise his appeal to voters.

“People love tax cuts, even when they make little sense,” Kraft said.

Since taxpayers will be keeping more upfront money, this bill will result in lower tax refunds in April 2015, according to the Milwaukee Journal Sentinel.

While it seems signing it at a farm was a random move from Walker, Helpap said there may have been a reason behind that.

“It was kind of a ‘we’re giving back to the taxpayer that has contributed this whole time’,” Helpap said. “This included people that live in cities, in rural areas — all citizens of the state.”

The overall amount of the projected surplus depends on the state’s economy. If the economy worsens, the surplus would go away quickly.

But if it improves, the state may have even more money, Helpap said. At the moment, this $1 billion estimate is the best the state has.

“It doesn’t seem like it’ll change too much, given the consistent nature of the economy lately,” Helpap said.