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Thursday, December 17, 2009

Wisconsin Takes a Tumble in Tax Rankings

By Keith R. Schmitz

From today's BizTimes newsletter:

Wisconsin continues to fall from the ranks of the highest-taxed states, according to the latest report from the Wisconsin Taxpayers Alliance.

Over the past 15 years, Wisconsin’s tax ranking among the 50 states fell from third in 1993 to 14th in 2007, according to a new report, "Long-Term Tax and Spending Ranks," that the Alliance released today.

The nonpartisan research organization also said that, with state and local government revenues growing less here than elsewhere, the Badger State’s 50-state spending rank dropped from 13th to 26th.

Reasons given by the Alliance for the drop in both the tax and spending ranks included state income tax cuts in 1999-2001 and limits on school, municipal and county revenues in recent years. The study was based on Census Bureau figures from 1993 to 2007, the most recent year for which data are available.

Wisconsin’s rank dropped in nearly all major revenue categories during the 1993-2007 period. Wisconsin’s individual income tax was among the seven highest from 1993 through 2000. However, income tax changes, including an indexing of tax brackets and the standard deduction and a lowering of tax rates, helped push Wisconsin out of the top 10 after 2004. In 2007, state income taxes were 14th-highest nationally and claimed 3.2 percent of personal income, vs. 3.5 percent in 1993.

Although no major changes were made to the state corporate income tax over the years studied, Wisconsin’s national rank fell from 15th to 25th.

According to WISTAX researchers, the state’s property tax was consistently among the top 10 from 1993 through 1996, claiming between 4.7 percent and 4.9 percent of income. However, a $1 billion buydown of school property taxes in 1996-97 dropped the state’s ranking to 11th (4.2 percent of income). Since then, the state has limited school levy increases through revenue limits, and more recently slowed the growth of municipal and county property taxes with levy limits. As a result, the state property tax ranking has fluctuated between ninth and 11th nationally.
That's a nice level. Any lower and we become Mississippi.

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