Governor Walker weighs in on tax reform proposals in other state - WQOW TV: Eau Claire, WI NEWS18 News, Weather, and Sports

Governor Walker weighs in on tax reform proposals in other states


Eau Claire (WQOW)- As the tax season begins, we're asking whether tax reform proposals in other states could influence Wisconsin's future and affect your wallet.  On Wednesday, the IRS officially kicked off the tax filing season.  We all know the tax code is complicated and most agree some kind of reform is needed.

The $64,000 question is how?  On the state level, three Republican governors have plans that are getting a lot of attention right now and have us wondering what the future holds for Wisconsin.

"A higher sales tax has a much higher burden on the low income than on the high income," explains Dr. Chris Ferguson, who teaches economics at UW-Stout.

Tax reform changes proposed by Republican governors from Louisiana, Nebraska and Kansas are drawing headlines nationwide.  They would like to eliminate personal and corporate income taxes in favor of increasing sales taxes.

"Estimates that I saw for Louisiana was more like the bottom 80 percent would be hurt and people in the bottom half, their taxes would likely double," Ferguson says.

In lieu of corporate and personal income taxes, Louisiana's governor wants to hike the sales tax from 4 to 7 percent.  That means a $3 item, which would cost $3.12 with a four-percent sales tax would now cost someone $3.21.  Ferguson says he's concerned about the impact a tax overhaul would have on certain groups.

"Essentially what you are telling the retirees is you paid taxes while you were working and oh, by the way, you are going to have to pay them again now that you are living on your fixed savings that have already been taxed once," Ferguson points out.

"I've looked at what Bobby Jindal and what Dave Heineman have done.  It's intriguing to me," admits Governor Walker.  "That's something that I'm certainly, if I choose to run again, would choose to have a focal point of my next platform."

The governor was Eau Claire on Wednesday.  WQOW asked him about the tax reform proposals in those three states.

"I think we can be aggressive with that.  I'd like to see us go down that path," Walker says. 

Let's get out the calculator.  The Wisconsin Taxpayers Alliance says personal and corporate taxes generated $8 billion in revenue last year.  It says to close the gap, the Wisconsin sales tax would have to increase well beyond what Louisiana is proposing; from five percent to 15 percent.  Another school of thought is the state wouldn't have to increase the sales tax by that much because if you eliminate personal income taxes, people have more money to spend, which could boost sales and the economy.

"I think that is something that if you are going to make that dynamic of a change, it's something that you should campaign on and talk about with the voters as you seek a term," explains Governor Walker.

Next month, the governor will unveil his two-year budget plan. He says he's looking at an income tax cut that would amount to about $340 million over two years. That would mean about $200 for the average Wisconsin family. 

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