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<?xml version="1.0" encoding="UTF-8"?><rss version="2.0" xmlns:content="http://purl.org/rss/1.0/modules/content/" xmlns:wfw="http://wellformedweb.org/CommentAPI/" xmlns:dc="http://purl.org/dc/elements/1.1/" xmlns:atom="http://www.w3.org/2005/Atom" xmlns:sy="http://purl.org/rss/1.0/modules/syndication/" xmlns:slash="http://purl.org/rss/1.0/modules/slash/" xmlns:georss="http://www.georss.org/georss" xmlns:geo="http://www.w3.org/2003/01/geo/wgs84_pos#" > <channel> <title>Blog – Wisconsin Budget Project</title> <atom:link href="https://www.wisconsinbudgetproject.org/category/blog/feed" rel="self" type="application/rss+xml" /> <link>https://www.wisconsinbudgetproject.org</link> <description>An independent Madison-based research group that focuses on tax and budget policy.</description> <lastBuildDate>Tue, 03 May 2022 19:11:13 +0000</lastBuildDate> <language>en-US</language> <sy:updatePeriod> hourly </sy:updatePeriod> <sy:updateFrequency> 1 </sy:updateFrequency> <generator>https://wordpress.org/?v=5.9</generator> <image> <url>https://www.wisconsinbudgetproject.org/wp-content/uploads/2019/05/cropped-logo-32x32.gif</url> <title>Blog – Wisconsin Budget Project</title> <link>https://www.wisconsinbudgetproject.org</link> <width>32</width> <height>32</height></image> <item> <title>Eliminating Wisconsin’s Income Tax Would Give Huge Tax Cuts to the Wealthy and Powerful</title> <link>https://www.wisconsinbudgetproject.org/eliminating-wisconsins-income-tax-would-give-huge-tax-cuts-to-the-wealthy-and-powerful</link> <dc:creator><![CDATA[Tamarine Cornelius]]></dc:creator> <pubDate>Tue, 03 May 2022 17:59:13 +0000</pubDate> <category><![CDATA[Blog]]></category> <category><![CDATA[income taxes]]></category> <category><![CDATA[STATE TAXES]]></category> <guid isPermaLink="false">http://www.wisconsinbudgetproject.org/?p=10606</guid> <description><![CDATA[<p>Eliminating Wisconsin’s income tax would funnel enormous tax cuts into the pockets of the wealthy and powerful, potentially raise taxes on people with the lowest incomes, and make it nearly impossible for Wisconsin to make the kind of investments that … <a href="https://www.wisconsinbudgetproject.org/eliminating-wisconsins-income-tax-would-give-huge-tax-cuts-to-the-wealthy-and-powerful" class="read-more">Read more </a></p><p>The post <a rel="nofollow" href="https://www.wisconsinbudgetproject.org/eliminating-wisconsins-income-tax-would-give-huge-tax-cuts-to-the-wealthy-and-powerful">Eliminating Wisconsin’s Income Tax Would Give Huge Tax Cuts to the Wealthy and Powerful</a> appeared first on <a rel="nofollow" href="https://www.wisconsinbudgetproject.org">Wisconsin Budget Project</a>.</p>]]></description> <content:encoded><![CDATA[<p>Eliminating Wisconsin’s income tax would funnel enormous tax cuts into the pockets of the wealthy and powerful, potentially raise taxes on people with the lowest incomes, and make it nearly impossible for Wisconsin to make the kind of investments that make the state a good place to live, do business, and raise a family. It would also widen the already-large gaps in well-being among people of different races, a gap that continues to hamstring Wisconsin’s economy.</p> <p>All that hasn’t stopped an influential cabal of lobbyists and lawmakers from trying to do away with Wisconsin’s income tax and with it, the revenue that supports critical public services like education and health care.</p> <p>There have been <a href="http://www.wisconsinbudgetproject.org/tax-shift-would-hike-taxes-for-people-with-low-incomes-and-give-a-big-tax-cut-to-the-top-1">several </a><a href="https://madison.com/news/local/govt-and-politics/gop-bill-looks-to-phase-down-eventually-eliminate-state-income-tax/article_8e213b91-4645-54e9-9f2d-899aa8308724.html">proposals </a>this year targeting the individual income tax, and while they differ in some respects, they share the common goals of restructuring our state and local tax system to favor the rich even more than it already does, and to severely undercut services that Wisconsin families need to thrive. </p> <p>Eliminating Wisconsin’s income tax would give an enormous tax break to tax filers in the top 1% – a group with an average income of $1.7 million. The top 1% of households would get an average tax break of $85,500 if the income tax were eliminated, which is more than a typical Wisconsin family earns in an entire year. That’s also more than 60 times the size of the average tax cut that a middle-income taxpayer would get. (These figures and the other numbers in this analysis are from the <a href="https://itep.org/">Institute on Taxation and Economic Policy</a>.) </p> <p>While the wealthy and powerful reap big rewards from ending the income tax, taxes for working people with low incomes could actually <em>increase</em> if the income tax were eliminated. A household in the lowest 20% by income – a group with an average income of $15,000 – would pay $139 <em>more </em>on average if the income tax was ended. That’s because states that do not have an income tax typically do not have income tax credits, some of which can exceed the amount of a person’s income tax liability and help make the state’s tax system more equitable. </p> <p class="has-text-align-left">Even when taking relative income size into account, the wealthiest would get by far the largest tax cut of any income group. The top 1% would get a tax cut equivalent to 5.1% of their income on average, which is more than twice as large as middle-income tax filers would get. Households in the lowest income category would pay 0.9% <em>more </em>of their income in taxes if the income tax and credits were eliminated. </p> <div class="wp-block-image"><figure class="aligncenter size-large"><img src="https://lh5.googleusercontent.com/V7bXwTuZSPDmRX6ydRrgkwNna-pEEoILpjvqAEh6Q3VkMaen3L1siAD_QwRPumDyTeOSYahl6bXuTqUSzRkN3_ATeYNLKX0lDWob7q_sK65kSjTYvT3ydrKvxt1uZqBLsR2_2vDPefVk9yrfQQ" alt=""/></figure></div> <p>Analyzing the distribution of the total tax cut by income group is another way of demonstrating how ending the income tax would mostly benefit people with the highest incomes. The top 20% of tax filers by income would get 79% of the value of the total tax cut, leaving just 21% of the total tax cut for the remaining 80% of filers. </p> <div class="wp-block-image"><figure class="aligncenter"><img src="https://lh3.googleusercontent.com/RS_kiuVMu0Mmyo6KM2fkE8ZF5FF_-gx6_6ksoEg94Rj8DRF3byqoUjp0t6hOXpzdMPIyOaZbF4OH5D3_hSleAwHL4dpFBT7x-aU1OgoMecOfUnbuCoUYF2l7TR5zea6aWCEMRBZW63mJJpitGw" alt=""/></figure></div> <p>Wisconsin’s tax code is already a major driver of economic and racial inequality, and contributes to the increasing concentration of income and wealth in a few hands—hands that are most likely to be White, due to a long history of racial discrimination. Getting rid of the income tax would target the bulk of a mammoth tax cut to White households and make it harder for families of color to thrive. White households would see their share of income paid in taxes go down by 47%, compared to just 29% for Black households, 32% for Hispanic households, 36% for American Indian households, and 37% for Asian households. </p> <p>Ending Wisconsin’s income tax would radically skew Wisconsin’s state and local tax system to benefit the wealthy more than it already does, making it one of the most regressive tax systems in the country. That’s because the income tax is the only part of Wisconsin’s state and local tax system that is progressive, meaning that people with higher incomes pay a larger share of their income in tax than people with lower incomes. Eliminating the income tax would leave only the property tax and the sales tax, both of which are regressive in that they fall the heaviest on people with low incomes.</p> <p></p> <div class="wp-block-image"><figure class="aligncenter"><img src="https://lh5.googleusercontent.com/fYgqCi8Ot_gmcQFwWlFVpZ50ucsl40gC5Bb-1Jdp1ndksetXVH6yE9SZEhwSLnD0VXcy26IbKJ2NNatKMnlZHy3R2u8HMgq1RL1OAS32pZC4RaIfodpaXwSmxAFHvx4jdM7f8PU8rDD3Pk6-ug" alt=""/></figure></div> <p>In addition to favoring the wealthy and powerful, eliminating the income tax would strip billions of dollars from critical public infrastructure and services that Wisconsin businesses, families and communities need to succeed. Axing the income tax would reduce public revenue by about $9 billion a year. To put that in perspective, reducing revenue by that amount would require budget cuts equivalent to ending state support for K-12 education, closing every prison in the state, and doubling University of Wisconsin tuition costs – combined. </p> <p>One of the largest areas of state spending is property tax relief. The huge loss of revenue from ending or phasing out the income tax would probably force state policymakers to reduce spending for property tax relief, or at least freeze it. That would result in an even larger share of income being paid for taxes by low- and middle-income Wisconsinites than the previous graph indicates. </p> <p>For Wisconsin’s economy to work for everyone, we need a tax system that provides enough resources to fund investments in healthy communities and public infrastructure, while providing a level playing field for Wisconsin families and businesses. Our tax system should take an active role in expanding opportunity and undoing the legacy of racial discrimination that makes it difficult for many families of color to thrive. Eliminating the income tax would move us in the opposite direction, by doubling down on tax changes that have directed a disproportionate share of resources to White households, and by widening the economic divide between the top 1% and everyone else. </p><p>The post <a rel="nofollow" href="https://www.wisconsinbudgetproject.org/eliminating-wisconsins-income-tax-would-give-huge-tax-cuts-to-the-wealthy-and-powerful">Eliminating Wisconsin’s Income Tax Would Give Huge Tax Cuts to the Wealthy and Powerful</a> appeared first on <a rel="nofollow" href="https://www.wisconsinbudgetproject.org">Wisconsin Budget Project</a>.</p>]]></content:encoded> </item> <item> <title>Weakening Assistance for Families Would Weaken the Workforce</title> <link>https://www.wisconsinbudgetproject.org/weakening-assistance-for-families-would-weaken-the-workforce</link> <dc:creator><![CDATA[Jon Peacock]]></dc:creator> <pubDate>Fri, 11 Feb 2022 18:23:51 +0000</pubDate> <category><![CDATA[Blog]]></category> <guid isPermaLink="false">http://www.wisconsinbudgetproject.org/?p=10598</guid> <description><![CDATA[</p><p>The COVID pandemic and the recession it caused illustrated the tremendous importance of public benefit programs like BadgerCare, FoodShare, and Unemployment Insurance. Yet a number of Republican legislators are trying to hurriedly pass a package of bills that would weaken … <a href="https://www.wisconsinbudgetproject.org/weakening-assistance-for-families-would-weaken-the-workforce" class="read-more">Read more </a></p><p>The post <a rel="nofollow" href="https://www.wisconsinbudgetproject.org/weakening-assistance-for-families-would-weaken-the-workforce">Weakening Assistance for Families Would Weaken the Workforce</a> appeared first on <a rel="nofollow" href="https://www.wisconsinbudgetproject.org">Wisconsin Budget Project</a>.</p>]]></description> <content:encoded><![CDATA[<p></p> <p>The COVID pandemic and the recession it caused illustrated the tremendous importance of public benefit programs like BadgerCare, FoodShare, and Unemployment Insurance. Yet a number of Republican legislators are trying to hurriedly pass a package of bills that would weaken the sources of public assistance that have been so critical over the past two years in reducing the pandemic’s harm to workers, families and the economy.</p> <p>The package of bills is being promoted as a way of strengthening the workforce, but it is much more likely to have the opposite effect because it would weaken programs like BadgerCare and FoodShare that keep many workers healthy and well nourished. In addition, it fails to address the real reasons for the shortage of workers, such as the acute shortage of affordable child care.</p> <p>By weakening Wisconsin’s safety net programs, while turning a blind eye to the real impediments to work, the proposed bills will exacerbate <a href="http://www.wisconsinbudgetproject.org/growing-gap-between-rich-and-everyone-else-thwarts-economic-opportunity">the growing economic divide in our state</a>. That gap has particularly harmed Wisconsinites of color, who face substantial barriers to success and endure some of the most <a href="https://cows.org/publications/race-in-the-heartland-wisconsins-extreme-racial-disparity/">alarming racial disparities</a> in the nation. </p> <p>A couple of the proposed bills will significantly reduce access to unemployment insurance (UI) benefits. Proponents of those bills argue that Wisconsin’s unemployment assistance hurts the economic recovery by contributing to a shortage of workers. However, the fact of the matter is that Wisconsin is in the top ten nationally in the percentage of adults in the workforce, and our state’s current unemployed rate of just 2.8% is at an all-time low.</p> <p>One of the UI bills (SB 906) would drastically reduce the maximum number of weeks of UI benefits when the unemployment rate is low. The current ceiling of 26 weeks would only be allowed after the unemployed rate averages at least 9% for a quarter of a year. As that standard is written in the bill, the 26-week limit that has long been the maximum would have only been in place for 6 months since 1984.</p> <p>That change, like many of the other proposals, would not affect all Wisconsinites equally. A <a href="https://s27147.pcdn.co/wp-content/uploads/UI-Indexing-Policy-Brief-05-14-2021.pdf">report by the National Employment Law Project</a> explains why slashing the length of UI benefits disproportionately hurts workers of color.</p> <p>Another alarming aspect of SB 906 is that the number of weeks of potential benefits is not based on the current unemployment rate; it’s determined by the average rate up to nine months earlier. If that illogical change had been in place in 2020, someone who lost their job during the peak of the pandemic when the unemployment rate was 15% would have only been eligible for up to 14 weeks of state UI payments (based on the unemployment rate in the fall of 2019).</p> <p>Other bills in the fast-tracked package would also hurt families who are doing their best to make ends meet. For example, one bill would disqualify some adults from their BadgerCare coverage for six months if they turn down any offer for a full-time job, increase in hours, or wage increase – even if that job doesn’t offer health insurance that the worker can afford, has hours they can’t make work, or is totally unsuitable for their circumstances. Another bill creates costly and unnecessary red tape and hoops everyone will have to jump through to renew their BadgerCare coverage.</p> <p>These two bills would weaken the Wisconsin workforce because access to affordable health care keeps employees healthy and more productive, ensuring they have more time to spend on the job and take care of their families. Roughly three-fourths of adults with BadgerCare coverage are working, many in jobs that either do not offer health insurance or provide it at a price that is unaffordable for low-wage workers. We must protect BadgerCare so Wisconsinites who are eligible can access the care they need, and families have financial security to help them through tough times.</p> <p>You might have a feeling of déjà vu about this group of bills and the very abbreviated process for pushing them through the legislature. A very similar package was rushed into law by Republican legislators and Governor Walker four years ago. Although they hastily enacted nine bills during a special session, many of the policy changes did not go into effect because federal agencies and courts determined that they conflicted with federal law, and the same thing is likely to happen with several bills in the new package.</p> <p>It’s very difficult to believe that these proposals constitute a good faith effort to address the worker shortage because the authors of these bills have shown little interest in policy measures that would significantly boost the number of workers. If they truly want to accomplish that goal, they should listen to workers and potential workers about the barriers to work, and they should develop a nonpartisan agenda.</p> <p>Based on conversations with nonprofits that work with Wisconsinites who are facing barriers to health and economic security, here is our list of recommendations for how Wisconsin can expand the workforce in ways that will help workers, their families, and the state’s economy:</p> <ul><li>Because a sharp drop in child care slots has forced many parents to drop out of the workforce, policymakers need to increase access to child care by substantially boosting funding for the child care subsidy program and creating more flexibility in the program, so it serves parents with erratic work schedules.</li><li>Make adults without dependent children eligible for the state Earned Income Tax Credit (EITC), so low-wage jobs aren’t a poverty trap. Research shows that these credits do a great job of promoting work, but among the 30 states that have EITCs, only Wisconsin excludes workers who aren’t custodial parents.</li><li>Stop suspending driver’s licenses for low-income people who are unable to pay fines, if those fines are unrelated to driving.</li><li>Increase the minimum wage, which has been frozen at $7.25 per hour since 2009.</li><li>Provide paid sick leave and family leave. This would not only help families, but would also benefit our economy by increasing worker retention and creating a more stable workforce.</li></ul> <p>State lawmakers need to ensure that all Wisconsin residents have an equitable ability to succeed. There’s no reason why policymakers shouldn’t be able to build a bipartisan, common sense agenda that removes barriers to work, reduces the severe racial disparities holding back our state, and maintains the safety net programs that helped us get through the 2020-21 recession. However, the current proposals would exacerbate Wisconsin’s racial inequities, and do little to bolster the workforce. The process for building an equitable and effective agenda should involve impacted families and should be considered with careful deliberation, rather than being rushed through the legislature just a couple of weeks after the bills were introduced. </p> <p>Jon Peacock</p><p>The post <a rel="nofollow" href="https://www.wisconsinbudgetproject.org/weakening-assistance-for-families-would-weaken-the-workforce">Weakening Assistance for Families Would Weaken the Workforce</a> appeared first on <a rel="nofollow" href="https://www.wisconsinbudgetproject.org">Wisconsin Budget Project</a>.</p>]]></content:encoded> </item> <item> <title>Tax Shift Would Hike Taxes for People with Low Incomes and Give a Big Tax Cut to the Top 1%</title> <link>https://www.wisconsinbudgetproject.org/tax-shift-would-hike-taxes-for-people-with-low-incomes-and-give-a-big-tax-cut-to-the-top-1</link> <dc:creator><![CDATA[Tamarine Cornelius]]></dc:creator> <pubDate>Thu, 03 Feb 2022 15:53:10 +0000</pubDate> <category><![CDATA[Blog]]></category> <category><![CDATA[income taxes]]></category> <category><![CDATA[sales tax]]></category> <category><![CDATA[STATE TAXES]]></category> <guid isPermaLink="false">http://www.wisconsinbudgetproject.org/?p=10589</guid> <description><![CDATA[<p>A group of conservative business lobbyists have proposed a radical change that would raise taxes on people with the lowest incomes to cover part of the cost of giving huge tax cuts to the wealthy and powerful. The plan would … <a href="https://www.wisconsinbudgetproject.org/tax-shift-would-hike-taxes-for-people-with-low-incomes-and-give-a-big-tax-cut-to-the-top-1" class="read-more">Read more </a></p><p>The post <a rel="nofollow" href="https://www.wisconsinbudgetproject.org/tax-shift-would-hike-taxes-for-people-with-low-incomes-and-give-a-big-tax-cut-to-the-top-1">Tax Shift Would Hike Taxes for People with Low Incomes and Give a Big Tax Cut to the Top 1%</a> appeared first on <a rel="nofollow" href="https://www.wisconsinbudgetproject.org">Wisconsin Budget Project</a>.</p>]]></description> <content:encoded><![CDATA[<p>A group of conservative business lobbyists have proposed a radical change that would raise taxes on people with the lowest incomes to cover part of the cost of giving huge tax cuts to the wealthy and powerful. The plan would result in the largest tax cuts going to white households, with households of color receiving smaller tax cuts or having to pay more in taxes. The enormous cost of the proposal would make it difficult for the state to provide even basic public services that schools, businesses, and families need to thrive. </p> <p>Last month, an influential group of lobbyists <a href="https://reforminggovernment.org/tax-reform-coalition-eliminate-state-income-tax-for-massive-middle-class-and-small-business-tax-relief/">released a proposal</a> to raise Wisconsin’s sales tax to eight percent, making it the highest state sales tax in the country, and eliminate the state individual income tax, Wisconsin’s biggest source of revenue. </p> <p><strong>An extremely large tax cut for the wealthy and powerful</strong></p> <p>This change would give enormous tax cuts to the top 1% by income. Tax filers in the top 1% – a group with an average income of $1.7 million – would get a tax cut of $78,000 on average. That is more than a typical Wisconsin earns over the course of a year. In contrast, a tax filer in the middle 20% by income would get an average tax cut of just $357, or less than a dollar a day. Put another way, a filer in the top 1% would get a tax cut that is 219 times as large in dollar amounts as a tax filer in the middle group, on average. </p> <p>Filers with low incomes would actually pay <em>more </em>in taxes under this plan than before the change. A filer in the bottom 20% by income, a group with an average income of $15,000, would expect to pay $460 more a year in taxes on average. Filers in the second 20% by income would also have their taxes hiked, paying $250 more on average. Taxes could also increase for middle-income Wisconsinites if the large reduction in total tax revenue results in cuts to state property tax relief or keeps that relief from growing in proportion to property taxes. </p> <figure class="wp-block-image size-large"><img loading="lazy" width="554" height="526" src="http://www.wisconsinbudgetproject.org/wp-content/uploads/2022/02/image-2.png" alt="" class="wp-image-10592"/></figure> <p>This pattern of big tax cuts for people with the highest incomes, and tax increases or much smaller tax cuts for people with lower incomes also holds true if the tax change is measured as a share of income, instead of in dollar amounts. The lowest-income households would pay an additional 3.0% of their income in taxes from this change, on average. In contrast, the top 1% would receive the biggest tax cut measured as a share of income, at -4.7%. </p> <figure class="wp-block-image size-large"><img loading="lazy" width="574" height="525" src="http://www.wisconsinbudgetproject.org/wp-content/uploads/2022/02/image-1.png" alt="" class="wp-image-10591"/></figure> <p></p> <p>This distribution change is because the sales tax is regressive, meaning that people with lower incomes pay a higher share of their income in that tax, while Wisconsin’s income tax is somewhat progressive, meaning that people with higher incomes pay a higher share of their income in that tax. Because of these tax characteristics, increasing the sales tax while cutting the income tax, as this plan does, usually results in a tax shift to people with lower incomes. </p> <p>Even without the regressive change that has been proposed, Wisconsin’s tax system already requires people with low incomes to pay a higher share of their incomes in state and local taxes than people with much higher earnings. The lowest 20% of Wisconsin households by income currently pay 10.1% of their income in state and local taxes. In contrast, the top 1% of households by income pay only 7.7% of their income in state and local taxes. Passing this plan would further skew Wisconsin’s tax system in favor of the very wealthy, and widen the economic divide between the top 1% and everyone else. </p> <figure class="wp-block-image"><img src="https://lh3.googleusercontent.com/S_2ShQcwMg-3T3hNbVNjzYAmFDbxol9jEwkF-ukY30ee93pMD2izhZaY3ooIUpz2okQnAc50nMKV8XJgD368Kh0hx2wd1TY8NL7YHKEW7_dfslj7E0elKuCIZw7ZqzJEmTHODMQN" alt=""/></figure> <p><strong>White filers would get bigger tax cuts than filers of other races</strong></p> <p>Wisconsin’s tax code is a major driver of economic and racial inequality, and contributes to the increasing concentration of income and wealth in a few hands—hands that are most likely to be White, due to a long history of racial discrimination. By targeting the bulk of a mammoth tax cut to white households, this proposal would make it harder for families of color to thrive. </p> <p>The tax change would favor White filers over people of other races and ethnicities. White filers would get a tax cut ($2,394) more than three times as large in dollar amounts as Black filers ($741), on average. Latinx filers would have a tax <em>increase </em>of $282 on average. </p> <figure class="wp-block-image"><img src="https://lh6.googleusercontent.com/Uo3tAm8myQi_aBDNNAOI9K17osTILYAd6L0WTNRgeVZPqf7xqwl5X2doGcTf4HVhdpr3cwmKLvHNmmTFOJCj1qcIApoy-jILAtbPv0wXSYR7cT6QrVSbxG06IH_ucnOT0xkDMQA-" alt=""/></figure> <p>Measured as a share of income, the largest tax cuts again go to White filers, who would get a tax cut of 2.3% of their income, on average. Black filers would get a tax cut equivalent to only 1.0% of their income. Latinx filers would have a tax increase of 0.5% of their income on average.</p> <p><strong>Likely outcome: Loss of critical services</strong></p> <p>This change would result in a massive revenue loss that would make it much more difficult for Wisconsin to make investments in families, schools, communities, and public infrastructure. The state would lose an estimated $5.3 billion in tax revenue a year, forcing the harmful elimination of entire categories of services that make Wisconsin an attractive place to live, work, and do business. To put the tax cut in perspective, it would require budget cuts equivalent to ending the state support for BadgerCare, the program that provides health care for people with low incomes; closing every prison in the state; and ending state support for Wisconsin’s technical college system, all combined. </p> <p>Increasing the sales tax to make up for a cut in income taxes moves the responsibility for paying taxes away from the rich and powerful, and onto the backs of people with low and moderate incomes. It would funnel larger tax cuts into the pockets of white filers while shorting households of color or even requiring them to pay more. This tax shift is paired with an enormous tax cut, one that would strip billions from kids’ classrooms, our health care system and public infrastructure — the very things that Wisconsin businesses and families need to succeed. We can’t create broad-based prosperity for Wisconsin by raising taxes on the families who can least afford it, just to pay for tax cuts for the rich, while making it impossible for Wisconsin to afford to support its families and communities. </p> <p><em>Methodology</em></p> <p><em>The <a href="https://itep.org/">Institute for Taxation and Economic Policy</a> provided the analysis of distribution changes. This analysis assumes Wisconsin’s Earned Income Tax Credit and the Homestead Credit, two refundable income tax credits, would be eliminated along with the state’s individual income tax. Of the nine states that lack an income tax, none currently have an Earned Income Tax Credit, although one state has an EITC planned for the future. Only one state of the nine has a property tax circuit breaker credit similar to Wisconsin’s Homestead Credit, albeit with much more limited eligibility. If the refundable credits were included in the analysis, the amounts of the tax changes for low and moderate income groups would change slightly but the results would still be strongly skewed towards filers in the top 1%. </em></p><p>The post <a rel="nofollow" href="https://www.wisconsinbudgetproject.org/tax-shift-would-hike-taxes-for-people-with-low-incomes-and-give-a-big-tax-cut-to-the-top-1">Tax Shift Would Hike Taxes for People with Low Incomes and Give a Big Tax Cut to the Top 1%</a> appeared first on <a rel="nofollow" href="https://www.wisconsinbudgetproject.org">Wisconsin Budget Project</a>.</p>]]></content:encoded> </item> <item> <title>With No Action From Congress, Wisconsin Families Miss Out on Benefits from Improved Child Tax Credit</title> <link>https://www.wisconsinbudgetproject.org/with-no-action-from-congress-wisconsin-families-miss-out-on-benefits-from-improved-child-tax-credit</link> <dc:creator><![CDATA[Tamarine Cornelius]]></dc:creator> <pubDate>Thu, 13 Jan 2022 20:17:31 +0000</pubDate> <category><![CDATA[Blog]]></category> <category><![CDATA[FEDERAL BUDGET & TAXES]]></category> <guid isPermaLink="false">http://www.wisconsinbudgetproject.org/?p=10582</guid> <description><![CDATA[<p>The failure of the Senate to pass the Build Back Better act means that the families of more than a million Wisconsin children are going to miss out on the advance Child Tax Credit payments and other improvements to the … <a href="https://www.wisconsinbudgetproject.org/with-no-action-from-congress-wisconsin-families-miss-out-on-benefits-from-improved-child-tax-credit" class="read-more">Read more </a></p><p>The post <a rel="nofollow" href="https://www.wisconsinbudgetproject.org/with-no-action-from-congress-wisconsin-families-miss-out-on-benefits-from-improved-child-tax-credit">With No Action From Congress, Wisconsin Families Miss Out on Benefits from Improved Child Tax Credit</a> appeared first on <a rel="nofollow" href="https://www.wisconsinbudgetproject.org">Wisconsin Budget Project</a>.</p>]]></description> <content:encoded><![CDATA[<p>The failure of the Senate to pass the Build Back Better act means that the families of more than a million Wisconsin children are going to miss out on the advance Child Tax Credit payments and other improvements to the credit that helped parents make ends meet in the second half of last year. These improvements helped close gaps in child well-being between White children and children of color – gaps that are rooted in historical and present-day racial discrimination in Wisconsin’s schools, health care system, housing and job market. January 15 will mark the first time in six months that families have not gotten the payment.</p> <p>Raising children is hard work, and it’s even harder when families don’t have enough money to make ends meet. The temporary improvements to the Child Tax Credit made by the American Rescue Plan Act made a significant difference for families and kids by making it easier to afford basic household expenses. More than half of families with low incomes spent their Child Tax Credit on food or on utilities, and many also used their credit to pay for necessities like rent and clothing, as shown in the chart below. </p> <figure class="wp-block-image"><img src="https://lh3.googleusercontent.com/zb7fBBM_Q0p63tyrKipCw-erxm5pe5u29xVghVhUHnSqDwXCZB1KkKm_6dAiLMt65UXBwqlrYBH6IoUHv4HSoKPGv71b-iJbG4zQUziOOSDewWhUeSt7bTlKtRWNjXYBpdmNsnWP" alt=""/></figure> <p>Improvements to the CTC in the Build Back Better act would support families as they raise their children. Those improvements include:</p> <p><strong>Receiving part of the credit in advance in the form of monthly payments</strong>, instead of in a lump sum at the end of the year. This allows parents additional flexibility in using the credit to pay for ongoing expenses, like groceries. This temporary improvement was included in the American Recovery Plan that passed last year, and has now expired. </p> <p><strong>Increasing the maximum credit amount</strong>, from $2,000 to $3,600 for children under age six, and to $3,000 for children age six to 17 (including 17-year olds for the first time). This temporary improvement has also expired.</p> <p><strong>Removing a provision that blocked parents with low incomes or no incomes from getting the credit</strong>. This change meant the parents of 366,000 Wisconsin children got the full credit who previously did not. This number includes parents of 73,000 Black children, 75,000 Latinx children, 13,000 Asian children, and 34,000 children of another race or multiple races. </p> <p>Allowing the parents with the lowest incomes to get the full amount of the credit makes an especially significant reduction in poverty for families of color. The chart below, which refers to this provision as “full refundability,” shows how this change reduced child poverty rates and narrowed racial and ethnic gaps in child poverty. For Black families, increasing the maximum credit amount and extending eligibility to 17 year olds slightly decreased the share of children in poverty from 22% to 21%, but adding full refundability decreased it much more, to 13%. </p> <p>As with the advance payments and larger maximum credit amount, this temporary improvement has now expired, meaning that families with the lowest incomes are no longer eligible to receive the credit. The failure to continue this improvement will impose hardship on parents who are already struggling to provide for their children. </p> <figure class="wp-block-image"><img src="https://lh6.googleusercontent.com/eOfaVzFYHj-FwCbnWDHf-ZLRVhAsmWmkLTOr7LpwLXsXoNflXslySHWn8h2sjBN_2PVWpDU0NZzYbWR1O0M-JRsYDQOpmOABpPB2R4Gr2kHudAOfQsgnbtOklzwJgSUT6ESwS6Tk" alt=""/></figure> <p></p> <p><strong>Restoring eligibility for the credit to children who can’t get a Social Security number because of their immigration status</strong>. Trump’s 2017 tax package blocked these children from getting the credit. </p> <p>The improvements to the Child Tax Credit included in the Build Back Better act would make it easier for parents to afford housing, food, clothing, child care and health care. Improving the Child Tax credit would especially help families who are having trouble making ends meet because they work at low-wage jobs or are affected by racial discrimination in the job market. By acting to pass Build Back Better or make other improvements to the Child Tax Credit, Congress would be investing in children, families, and our future. </p><p>The post <a rel="nofollow" href="https://www.wisconsinbudgetproject.org/with-no-action-from-congress-wisconsin-families-miss-out-on-benefits-from-improved-child-tax-credit">With No Action From Congress, Wisconsin Families Miss Out on Benefits from Improved Child Tax Credit</a> appeared first on <a rel="nofollow" href="https://www.wisconsinbudgetproject.org">Wisconsin Budget Project</a>.</p>]]></content:encoded> </item> <item> <title>At the Start of the New Year, Minimum Wages Went up in 21 States. Wisconsin Wasn’t One of Them.</title> <link>https://www.wisconsinbudgetproject.org/at-the-start-of-the-new-year-minimum-wages-went-up-in-21-states-wisconsin-wasnt-one-of-them</link> <dc:creator><![CDATA[Tamarine Cornelius]]></dc:creator> <pubDate>Tue, 04 Jan 2022 15:50:19 +0000</pubDate> <category><![CDATA[Blog]]></category> <category><![CDATA[ECONOMIC SECURITY]]></category> <category><![CDATA[minimum wage]]></category> <guid isPermaLink="false">http://www.wisconsinbudgetproject.org/?p=10574</guid> <description><![CDATA[<p>Low-paid workers across the country are getting raises because 21 states and 35 cities and counties increased their minimum wages around the beginning of the year. Those raises will lift workers out of poverty, help struggling families make ends meet, … <a href="https://www.wisconsinbudgetproject.org/at-the-start-of-the-new-year-minimum-wages-went-up-in-21-states-wisconsin-wasnt-one-of-them" class="read-more">Read more </a></p><p>The post <a rel="nofollow" href="https://www.wisconsinbudgetproject.org/at-the-start-of-the-new-year-minimum-wages-went-up-in-21-states-wisconsin-wasnt-one-of-them">At the Start of the New Year, Minimum Wages Went up in 21 States. Wisconsin Wasn’t One of Them.</a> appeared first on <a rel="nofollow" href="https://www.wisconsinbudgetproject.org">Wisconsin Budget Project</a>.</p>]]></description> <content:encoded><![CDATA[<p>Low-paid workers across the country are getting raises because 21 states and 35 cities and counties increased their minimum wages around the beginning of the year. Those raises will lift workers out of poverty, help struggling families make ends meet, and make it easier for workers to achieve financial security. A minimum wage increase gives a particular boost to workers of color, for whom a long history of wage discrimination has depressed wages.</p> <p>Unfortunately, Wisconsin workers won’t get any of those benefits, as Wisconsin lawmakers have refused to increase the state’s minimum wage for more than a decade. It’s still stuck at $7.25, far below the $15 that some states now set as the minimum. Wisconsin’s minimum wage was last raised in 2009 and has lost a quarter of its purchasing power since then. Thirty states have higher minimum wages. </p> <p>In Wisconsin, increasing the minimum wage to $15 would lift the wages of three out of ten workers, and it would especially help Black and Brown workers. Half of Black workers and over half of Hispanic workers in Wisconsin would get a raise, as well as one-third of Asian workers. It would lift the wages of one-quarter of White workers. Six out of ten workers who would get a raise are age 25 or older. Full-time workers who get a raise would earn an additional $3,500 a year on average. </p> <p>The minimum wage increase in other states will lift the earnings of a significant chunk of the workforce and put millions more in wages into workers’ pockets. The large number and variety of states with increases in the minimum wage shows that this issue cuts across partisan lines. Several thoroughly “red” states that have legislatures and governor’s seats controlled by Republicans upped their minimum wage at the beginning of this year, including Arizona, where the minimum increased to $12.80, and Missouri where the minimum increased to $11.15. </p> <p>In some states, the minimum wage automatically goes up at the beginning of the year because lawmakers have set a process to ensure that the wage floor keeps pace with inflation. In other states, the increases that took place this month are part of increases that are gradually phased in over several years, set in motion either by successful ballot measures or legislation.</p> <p>In 2022, millions of workers in other states will reap the benefits of a higher minimum wage, and will be better able to support their families. Wisconsin workers should as well. </p><p>The post <a rel="nofollow" href="https://www.wisconsinbudgetproject.org/at-the-start-of-the-new-year-minimum-wages-went-up-in-21-states-wisconsin-wasnt-one-of-them">At the Start of the New Year, Minimum Wages Went up in 21 States. Wisconsin Wasn’t One of Them.</a> appeared first on <a rel="nofollow" href="https://www.wisconsinbudgetproject.org">Wisconsin Budget Project</a>.</p>]]></content:encoded> </item> <item> <title>Four Charts that Show the Harm of Racial Disparities in Wisconsin’s Prisons</title> <link>https://www.wisconsinbudgetproject.org/four-charts-that-show-the-harm-of-racial-disparities-in-wisconsins-prisons</link> <dc:creator><![CDATA[Tamarine Cornelius]]></dc:creator> <pubDate>Tue, 16 Nov 2021 19:53:25 +0000</pubDate> <category><![CDATA[Blog]]></category> <guid isPermaLink="false">http://www.wisconsinbudgetproject.org/?p=10562</guid> <description><![CDATA[<p>Wisconsin’s use of incarceration to lock up a staggering share of its population of color inflicts serious harm on individuals and communities. New figures show that the racial disparities in Wisconsin’s incarceration rates far exceed disparities at the national level, … <a href="https://www.wisconsinbudgetproject.org/four-charts-that-show-the-harm-of-racial-disparities-in-wisconsins-prisons" class="read-more">Read more </a></p><p>The post <a rel="nofollow" href="https://www.wisconsinbudgetproject.org/four-charts-that-show-the-harm-of-racial-disparities-in-wisconsins-prisons">Four Charts that Show the Harm of Racial Disparities in Wisconsin’s Prisons</a> appeared first on <a rel="nofollow" href="https://www.wisconsinbudgetproject.org">Wisconsin Budget Project</a>.</p>]]></description> <content:encoded><![CDATA[<p>Wisconsin’s use of incarceration to lock up a staggering share of its population of color inflicts serious harm on individuals and communities. New figures show that the racial disparities in Wisconsin’s incarceration rates far exceed disparities at the national level, which themselves are stark. The result is a system that deepens the divide between Whites and people of color, and uses public resources to do so.</p> <p>Some drivers of the disparities in incarceration rates have their roots in historical and present-day racial discrimination in Wisconsin’s housing, health care system, schools, and job market. These structural disadvantages can limit opportunity for people of color before they ever interact with the legal system.</p> <p>These disparities are further exacerbated by a criminal justice system that over-polices communities of color, differentially charges Black people, especially Black men, for the same crimes as whites and then too often mandates harsher and longer sentencing.</p> <p>This systemic racism, which is deeply embedded within the decision-making process, continues to impact people and communities of color even after the period of incarceration is over. The consequences of incarceration are long-lasting when it comes to finding housing and employment.</p> <p>These disparities in incarceration are not new. They have been long been significant in Wisconsin. </p> <p>Here are four charts that show the enormous cost of Wisconsin’s incarceration policies. The figures on incarceration rates are from a report by The Sentencing Project, <a href="https://www.sentencingproject.org/publications/color-of-justice-racial-and-ethnic-disparity-in-state-prisons/">The Color of Justice: Racial and Ethnic Disparity in State Prisons</a>. </p> <ol><li><strong>Wisconsin’s imprisonment rate for Black residents far exceeds the national average</strong>. In contrast, Wisconsin locks up a smaller share of its White population than most other states. </li></ol> <p>In Wisconsin, 2,742 out of every 100,000 Black residents are imprisoned, 2.2 times the national rate for Black residents. That means a Black resident of Wisconsin is more than twice as likely to be locked up as a Black person in the rest of the country as a whole. </p> <p>Wisconsin imprisons Latinx residents at a rate of 475 per 1000,000, or 1.4 times the national rate.</p> <p>In contrast to the Black and Latinx imprisonment rates, Wisconsin locks up a smaller share of its White population than the national average. Wisconsin imprisons 230 White residents per 100,000, only about 0.9 times the national average. This means a White resident of Wisconsin is about 10% less likely to be locked up than a White person in the rest of the country as a whole. </p> <figure class="wp-block-image size-large"><img loading="lazy" width="571" height="351" src="http://www.wisconsinbudgetproject.org/wp-content/uploads/2021/11/image.png" alt="" class="wp-image-10563"/></figure> <ol start="2"><li><strong>Wisconsin locks up a higher share of our Black residents than any other state.</strong> Only six states have higher Latinx imprisonment rates than Wisconsin does. </li></ol> <p>Wisconsin ranks among the states with the highest incarceration rates for people of color: 1st for Black imprisonment rates and 7th for Latinx rates. In contrast, Wisconsin ranked 30th — in the bottom half of states — for White imprisonment rates.</p> <div class="wp-block-image"><figure class="aligncenter"><img src="https://lh4.googleusercontent.com/10pRhrN5vk-8WNT7aI5V9jTWitJsWdnpkV318qz62CRlpjUr51LVn23_G0QsaDGrSG7CF0WEcr6l_GoJhFcDO5_w_iYvLGoHk3qnL7lwvz4ZjB5oI81BnXghE1NChVGFEblQVLG1" alt=""/></figure></div> <ol start="3"><li><strong>Wisconsin has the second-highest Black/White incarceration differential of any state.</strong></li></ol> <p>Nationally, the Black incarceration rate is 4.8 times higher than the White rate. In Wisconsin, it’s even higher, with Black residents 11.9 times as likely to be locked up than White residents. Only New Jersey has a higher Black/White differential, in part because New Jersey’s White incarceration rate is much lower than the national average. </p> <div class="wp-block-image"><figure class="aligncenter"><img src="https://lh4.googleusercontent.com/4h42wlIPl_4NsdG8_TlwAs6ZQQUAP15RS6tMlQ9HHh0RdRWkjV6Upd5fYOIzKnTW-UK1QUgVQgGWIueC0inOVSTTpIswl1mxIUgf1hyVfetGpm5HORv9EsJOzuxyCesNrvRDSrKQ" alt=""/></figure></div> <ol start="4"><li><strong>Wisconsin’s corrections costs have long been high compared to other states. </strong></li></ol> <p>The human cost of Wisconsin’s gravely unjust system is incalculable. The monetary cost is also substantial. For years, Wisconsin state and local governments have spent more than the national average on corrections, measured as a share of personal income. In 2018, Wisconsin governments spent $5.31 for every $1,000 in personal income on corrections, compared to $4.74 for the national average. Measured this way, Wisconsin spends 10.7% more on corrections than the national average. </p> <div class="wp-block-image"><figure class="aligncenter"><img src="https://lh3.googleusercontent.com/eTrMW2HsLYv4T3m6VPnnYogt09mzLPaI9erqwSLBsenC1ZiiD1nx3yOzFpJ1edppZGAOw2AyLr2VRLHP9pZojiVM9se2J1saBfI1aJHQcepr6-f38jLJvPqk9K8lNOXTF2bCXZrK" alt=""/></figure></div> <p>Wisconsin’s inequitable incarceration policies are a result of decisions made by state and local policymakers, and there are steps policymakers can take to move Wisconsin towards more equitable outcomes. Here are three steps that The Sentencing Project recommends Wisconsin and other states take to address disparities:</p> <ul><li>Return 17 year olds to the juvenile justice system. Only two states other than Wisconsin require all 17 year olds to be tried as adults, which increases sentence length and imposes especially harsh sentences on youth of color. <a href="https://raisetheagewi.org/">Read more</a>.</li><li>Require racial impact statements for all criminal statutes. Policymakers should know the effects of laws that they are passing. It’s important to evaluate the effect of both new laws and already-existing laws and policies, to maximize the impact of these statements. </li><li>Decriminalize low-level drug offenses. Prior convictions can accumulate and pull people further into the criminal legal system. In Wisconsin, Black residents are <a href="https://www.wpr.org/report-black-wisconsinites-4-3-times-more-likely-be-convicted-possession-marijuana">more than four times as likely as Whites to be convicted for possession of marijuana</a>, despite research that shows that usage is equal across racial and ethnic groups.</li></ul><p>The post <a rel="nofollow" href="https://www.wisconsinbudgetproject.org/four-charts-that-show-the-harm-of-racial-disparities-in-wisconsins-prisons">Four Charts that Show the Harm of Racial Disparities in Wisconsin’s Prisons</a> appeared first on <a rel="nofollow" href="https://www.wisconsinbudgetproject.org">Wisconsin Budget Project</a>.</p>]]></content:encoded> </item> <item> <title>Wisconsin’s Billion-Dollar Tax Cut Leaves out a Huge Chunk of Households</title> <link>https://www.wisconsinbudgetproject.org/wisconsins-billion-dollar-tax-cut-leaves-out-a-huge-chunk-of-households</link> <dc:creator><![CDATA[Tamarine Cornelius]]></dc:creator> <pubDate>Thu, 09 Sep 2021 16:40:14 +0000</pubDate> <category><![CDATA[Blog]]></category> <category><![CDATA[income taxes]]></category> <category><![CDATA[STATE TAXES]]></category> <guid isPermaLink="false">http://www.wisconsinbudgetproject.org/?p=10536</guid> <description><![CDATA[<p>Wisconsin lawmakers passed an enormous income tax cut in the 2021-23 state budget that further tilts our tax system in favor of the wealthy. The tax cut almost completely leaves out households with low incomes, and gives White households larger … <a href="https://www.wisconsinbudgetproject.org/wisconsins-billion-dollar-tax-cut-leaves-out-a-huge-chunk-of-households" class="read-more">Read more </a></p><p>The post <a rel="nofollow" href="https://www.wisconsinbudgetproject.org/wisconsins-billion-dollar-tax-cut-leaves-out-a-huge-chunk-of-households">Wisconsin’s Billion-Dollar Tax Cut Leaves out a Huge Chunk of Households</a> appeared first on <a rel="nofollow" href="https://www.wisconsinbudgetproject.org">Wisconsin Budget Project</a>.</p>]]></description> <content:encoded><![CDATA[<p>Wisconsin lawmakers passed an enormous income tax cut in the 2021-23 state budget that further tilts our tax system in favor of the wealthy. The tax cut almost completely leaves out households with low incomes, and gives White households larger tax cuts than Black or Latinx households. </p> <p>The tax cut, <a href="http://www.wisconsinbudgetproject.org/wisconsin-lawmakers-directed-far-more-resources-to-an-income-tax-cut-than-other-critical-priorities">which costs a billion dollars a year</a>, reduces the tax rate for the second-highest income bracket from 6.27% to 5.3%, while leaving the rates for lower brackets unchanged. This approach slants the tax cut in favor of households with higher incomes and leaves out many with low incomes. </p> <p>This huge tax cut widens the economic divide in our state and makes it harder to invest in critical public services. Almost half—49%—of all tax filers will receive no portion of the $1 billion per year tax cut, because their incomes are too low, according to an analysis by <a href="https://docs.legis.wisconsin.gov/misc/lfb/budget/2021_23_biennial_budget/505_distributional_information_on_proposed_individual_income_tax_modifications_in_the_governor_s_2021_23_biennial_budget_bill_3_25_21.pdf">Wisconsin’s Legislative Fiscal Bureau</a>. </p> <div class="wp-block-image"><figure class="aligncenter"><img src="https://lh5.googleusercontent.com/5w6KpK0fcusboRfCJp7DUYJB3Sl1rs68OkW8jA4TOG-a_xD_aVxULxkEufKU_f9YWRvjCbPoDn89wJuXD8kmEEhX0get5OVDsaNLf3ON5tq6egT0qWHv0RHITrSnnlIqh2bRClNk=s0" alt=""/></figure></div> <p>Low-income households that do get a tax cut will get only a very small one. More than 6 out of 10 filers in Wisconsin earn under $50,000 a year. Yet these filers will get just 3% of the total value of the tax cut. This means that families that are struggling to make ends meet will get little or nothing in the way of a tax cut, while the majority of the tax cut is delivered to higher-income households. Filers earning under $50,000 a year get about 34¢ a week from this tax cut, or about $18 per year. In contrast, filers earning more than $300,000 per year get an average income tax cut of $2,785. </p> <div class="wp-block-image"><figure class="aligncenter size-large"><img loading="lazy" width="593" height="544" src="http://www.wisconsinbudgetproject.org/wp-content/uploads/2021/09/image-2.png" alt="" class="wp-image-10538"/></figure></div> <p></p> <p>Shutting low-income families out of the tax cut will further skew Wisconsin’s tax system, which already requires people with low incomes to pay a higher share of their incomes in state and local taxes than people with much higher earnings. The lowest 20% of Wisconsin households by income, in which households earn less than $22,000 per year, pay 10.1% of their income in state and local taxes, according to an analysis by the<a href="https://itep.org/whopays/wisconsin/"> Institute for Taxation and Economic Policy</a>. In contrast, the top 1% of households by income—a group with incomes of $513,000 and above—pay only 7.7% of their income in state and local taxes. </p> <div class="wp-block-image"><figure class="aligncenter"><img src="https://lh3.googleusercontent.com/P-54kO_P6u8j78Qkkuo1RsP-YzoYDXDeXbWZoh9FF63tYzl-RcvhBAPQhk2_BPlghl31kWLfznSsynlRKzUIKTIqoGk_S11TiEvEAEN1avspFTdDF-sdY8L27QKq7QrcUymKcUF0=s0" alt=""/></figure></div> <p>The tax cut also will widen racial disparities in the economic well-being of Wisconsin households. White households get a significantly larger tax cut on average than Black or Latinx households. Historical and present-day racial discrimination in Wisconsin’s schools, health care system, and job market have lowered the wages of Black and Latinx households, making them more likely to be among the low-income households that are excluded from receiving a portion of this tax cut. As a result, White households will get an average tax cut of $377, twice as large as the average tax cut received by a Black household ($157) or a Latinx household ($191), according to ITEP.</p> <div class="wp-block-image"><figure class="aligncenter"><img src="https://lh4.googleusercontent.com/mUXSF-aiEllI3mcBzkF5oIlfMUU4bFkoHA4UfDEHgndHLsNXj4bXddvosD1q7xsThyYVClT5RL9e7QdfMTM9IOm03MrORXvqOyy8NW7HZtrzLZfRdX6nPML7t3o25OOPj_3JEhi5=s0" alt=""/></figure></div> <p>Even when comparing the size of the tax cuts relative to income, White households get a far larger tax cut than Black or Latinx households. The tax cut amounts to 0.39% of White households’ income, compared to 0.29% of Black households, and 0.31% of Latinx households. </p> <div class="wp-block-image"><figure class="aligncenter"><img src="https://lh6.googleusercontent.com/ILb_Z44H3xpAgnozAER44hDS01GykVsHH6XorNMbs9xsHaIEn0EQohmlfVKxsbe0iV9ECnYPD9te-C1jDUJ4WhWTRrtA_51MI0V0kXZP0Sq1ur0mDftH4gYPhFg9JZrz229GIT8w=s0" alt=""/></figure></div> <p>In its current state, Wisconsin’s tax code is a major driver of economic inequality, and contributes to the increasing concentration of income and wealth in a few hands—hands that are most likely to be white, due to a long history of racial discrimination. By directing the bulk of a mammoth tax cut to households with high incomes, state lawmakers are making this problem worse. Instead of looking for new ways to cut taxes for White households with the highest incomes, state lawmakers should turn their attention to making investments that help Wisconsin communities and families thrive.</p><p>The post <a rel="nofollow" href="https://www.wisconsinbudgetproject.org/wisconsins-billion-dollar-tax-cut-leaves-out-a-huge-chunk-of-households">Wisconsin’s Billion-Dollar Tax Cut Leaves out a Huge Chunk of Households</a> appeared first on <a rel="nofollow" href="https://www.wisconsinbudgetproject.org">Wisconsin Budget Project</a>.</p>]]></content:encoded> </item> <item> <title>TANF at 25: Failing to Meet the Needs of WI Families</title> <link>https://www.wisconsinbudgetproject.org/tanf-at-25-failing-to-meet-the-needs-of-wi-families</link> <dc:creator><![CDATA[Jon Peacock]]></dc:creator> <pubDate>Thu, 19 Aug 2021 19:07:37 +0000</pubDate> <category><![CDATA[Blog]]></category> <category><![CDATA[ECONOMIC SECURITY]]></category> <category><![CDATA[federal issues]]></category> <category><![CDATA[TANF]]></category> <category><![CDATA[W-2]]></category> <guid isPermaLink="false">http://www.wisconsinbudgetproject.org/?p=10523</guid> <description><![CDATA[<p>On August 22 of this year, the law creating the Temporary Assistance to Needy Families program (TANF) turns 25 years old, and that’s not a cause for celebration. At the national level and here in Wisconsin, TANF is serving only … <a href="https://www.wisconsinbudgetproject.org/tanf-at-25-failing-to-meet-the-needs-of-wi-families" class="read-more">Read more </a></p><p>The post <a rel="nofollow" href="https://www.wisconsinbudgetproject.org/tanf-at-25-failing-to-meet-the-needs-of-wi-families">TANF at 25: Failing to Meet the Needs of WI Families</a> appeared first on <a rel="nofollow" href="https://www.wisconsinbudgetproject.org">Wisconsin Budget Project</a>.</p>]]></description> <content:encoded><![CDATA[<p>On August 22 of this year, the law creating the Temporary Assistance to Needy Families program (TANF) turns 25 years old, and that’s not a cause for celebration. At the national level and here in Wisconsin, TANF is serving only a small fraction of the families who are living in poverty and are eligible for assistance.</p> <p>The TANF law created a block grant to states that replaced the Aid to Families with Dependent Children program (AFDC). Wisconsin uses a portion of those block grant funds to finance cash assistance tied to work through the Wisconsin Works program, known as W-2.</p> <p>Unfortunately, the amount of TANF funding used for direct financial assistance to families, including those who participate in work and training programs, has been shrinking in Wisconsin and many other states. According to <a href="https://www.cbpp.org/research/family-income-support/temporary-assistance-for-needy-families-tanf-at-25">an analysis by the Center on Budget and Policy Priorities</a>, the portion of total federal and state TANF funding spent for “basic assistance” was just 21 percent nationally in 2019 and only 12 percent in Wisconsin. Thirty-four other states provide a larger share of their TANF funding for basic assistance.</p> <p>W-2 is administered in most parts of Wisconsin by for-profit businesses that profit by suppressing the number of families they serve and by minimizing the service they provide. Because most participants find the program unhelpful, demeaning and overly bureaucratic, few economically distressed families apply for W-2.</p> <figure class="wp-block-image size-large"><img loading="lazy" width="922" height="488" src="http://www.wisconsinbudgetproject.org/wp-content/uploads/2021/08/image-1.png" alt="" class="wp-image-10525" srcset="https://www.wisconsinbudgetproject.org/wp-content/uploads/2021/08/image-1.png 922w, https://www.wisconsinbudgetproject.org/wp-content/uploads/2021/08/image-1-768x406.png 768w" sizes="(max-width: 922px) 100vw, 922px" /></figure> <p>The severe shortcomings of W-2 are illustrated by its failure to grow during the most recent recession caused by the Covid pandemic. In 2020 and 2021 – during the deepest recession in almost a century – the number of Wisconsin families receiving W-2 cash assistance barely increased. The total number of cash assistance cases (i.e., W-2 cases plus “child-only” cases) was up just 6 percent compared to 2019, and it was a staggering 80 percent below the number receiving cash assistance in 1991, under the AFDC program.</p> <p>State and federal lawmakers’ decisions to reduce direct financial assistance for people trying to escape poverty is one of the reasons for the growing economic divide that is holding back our state. That divide is particularly harmful to people furthest from opportunity – those in rural parts of the state and people of color.</p> <p>The failure of W-2 to help more families during the very deep recession last year can be attributed in part to not creating a broad exception to the work requirement for receiving assistance. That requirement is especially problematic during a deadly pandemic. However, there are also more fundamental problems in the design and implementation of TANF, <a href="https://www.cbpp.org/research/family-income-support/tanf-policies-reflect-racist-legacy-of-cash-assistance">growing out of the racist ideology and false assumptions that led to TANF’s adoption</a>.</p> <p>The following policy choices have contributed to the failure of W-2 and TANF to serve very many of the eligible families:</p> <ul><li>The funding level has been frozen since TANF was created, and the fixed appropriation level has lost 40 percent of its value over the past 25 years.</li><li>Much of the funding in Wisconsin is being spent on administrative costs, and the state’s contracts with the private entities that administer W-2 enable them to increase their profits by finding ways to deny assistance to families.</li><li>States are using federal TANF funds in ways that replace money the state had previously spent from its own coffers, as illustrated by Wisconsin’s use of federal TANF funds to substantially <a href="http://www.wisconsinbudgetproject.org/going-going-gone-how-the-budget-eliminates-the-tanf-balance-and-shortchanges-low-income-families">reduce the state share of funding for the Earned Income Tax Credit</a>.</li><li>The Wisconsin legislature has chipped away at W-2 benefits, and has created additional barriers to accessing public assistance.</li></ul> <p>Financial assistance for families should be a key part of TANF, not only to help cover parents’ and children’s basic needs today, but also to help create the stability necessary for children to thrive in the future. TANF funding can also provide valuable training and employment skills for parents by enabling them to participate in effective job programs, such as <a href="https://ppi.communityadvocates.net/policy-projects/milwaukee-transitional-jobs-project.html">the Transitional Jobs program</a> (in contrast to the demeaning and ineffective programs offered by many W-2 agencies). However, fewer and fewer families are getting these forms of assistance from state expenditures of TANF funds.</p> <p>Federal lawmakers should change the structure of TANF to require that more of the funding is used to serve families who need the cash assistance that TANF can provide to improve their current circumstances. However, even with the current federal law, Wisconsin policymakers can and should make fundamental changes that help the lowest income parents across Wisconsin as they strive to support themselves and their children:</p> <ul><li>State policymakers should scrap W-2 or at least fundamentally restructure the program so the private corporations that implement it are held accountable for providing the services needed by low-income families, rather than enabling those corporations to turn families away and maximize the profits from their contracts with the state.</li><li>The state should increase the TANF funding allocated for the Transitional Jobs program, which has been shown to be an effective jobs training program.</li><li>State policymakers should also increase the share of TANF funding available to provide emergency assistance to families with children, in order to help them with emergencies like car repairs, or help with rent to avoid an eviction.</li><li>Lastly, state policy makers should consider doing a racial equity impact assessment to determine how public assistance programs can be redesigned to reduce the extreme racial disparities in Wisconsin.</li></ul> <p><a href="https://www.cbpp.org/research/poverty-and-inequality/economic-security-programs-help-low-income-children-succeed-over">According to numerous studies</a>, having access to a stable income can improve children’s well-being and also their educational and economic outcomes. After 25 years of experience with TANF and the dwindling assistance provided by W-2, it’s time for state and federal lawmakers to make fundamental changes that enable these programs to be far more effective in providing financial assistance, stability and opportunity for low-income families.</p> <p>Jon Peacock</p> <p></p> <hr class="wp-block-separator"/> <p></p> <p></p><p>The post <a rel="nofollow" href="https://www.wisconsinbudgetproject.org/tanf-at-25-failing-to-meet-the-needs-of-wi-families">TANF at 25: Failing to Meet the Needs of WI Families</a> appeared first on <a rel="nofollow" href="https://www.wisconsinbudgetproject.org">Wisconsin Budget Project</a>.</p>]]></content:encoded> </item> <item> <title>Wisconsin Lawmakers Directed Far More Resources to an Income Tax Cut than Other Critical Priorities</title> <link>https://www.wisconsinbudgetproject.org/wisconsin-lawmakers-directed-far-more-resources-to-an-income-tax-cut-than-other-critical-priorities</link> <dc:creator><![CDATA[Tamarine Cornelius]]></dc:creator> <pubDate>Mon, 09 Aug 2021 16:19:09 +0000</pubDate> <category><![CDATA[Blog]]></category> <category><![CDATA[income taxes]]></category> <category><![CDATA[STATE TAXES]]></category> <guid isPermaLink="false">http://www.wisconsinbudgetproject.org/?p=10517</guid> <description><![CDATA[<p>The huge tax cut that Wisconsin lawmakers passed in the state budget far outstrips the minimal investments they made in critical priorities like education, health, and workforce development. The size of the tax cut will make it harder for schools, … <a href="https://www.wisconsinbudgetproject.org/wisconsin-lawmakers-directed-far-more-resources-to-an-income-tax-cut-than-other-critical-priorities" class="read-more">Read more </a></p><p>The post <a rel="nofollow" href="https://www.wisconsinbudgetproject.org/wisconsin-lawmakers-directed-far-more-resources-to-an-income-tax-cut-than-other-critical-priorities">Wisconsin Lawmakers Directed Far More Resources to an Income Tax Cut than Other Critical Priorities</a> appeared first on <a rel="nofollow" href="https://www.wisconsinbudgetproject.org">Wisconsin Budget Project</a>.</p>]]></description> <content:encoded><![CDATA[<p>The huge tax cut that Wisconsin lawmakers passed in the state budget far outstrips the minimal investments they made in critical priorities like education, health, and workforce development. The size of the tax cut will make it harder for schools, communities, and families with low incomes to get the resources they need to thrive. Diverting billions of dollars to a tax cut that leaves out people with low incomes will also make it more difficult for the state to address the racial disparities that hold back Wisconsin. </p> <p>In the budget, lawmakers reduced income tax rates for some taxpayers, although they left out taxpayers with the lowest incomes. The cost of the income tax cut adds up to more than $2 billion over the two-year budget period, representing a very large loss of revenue that the state could have better put to use strengthening Wisconsin businesses, protecting Wisconsin families, and building up Wisconsin communities.</p> <p>In contrast to the huge income tax cut, the legislature provided only $105 million in new resources from state tax dollars that K-12 schools can put to use educating Wisconsin children over the next two years. Put another way, lawmakers invested about 1/20th the amount of new resources in school classrooms as they allocated to this tax cut. </p> <p>Another comparison: lawmakers put only $7 million in new state tax dollars into the entire University of Wisconsin System over the next two years, an amount that is roughly 1/300th the size of the tax cut. And to make an even more dramatic comparison, the amount of new tax money that lawmakers put into making Wisconsin a better place for both workers and employers through the Department of Workforce Development was just 1/2500th the size of the tax cut.</p> <p>In fact, the amount of dollars lost to the income tax cut is more than <em>ten times</em> the increase in new state tax dollars that were allocated to K-12 classrooms, health, children and families, the UW System, and workforce development…combined!</p> <figure class="wp-block-image"><img src="https://lh3.googleusercontent.com/oMdXojOY4cskPXMIUugeYlMjjKPJVl60lLdIGcz8luQ1vn-ebZySocEpYb_BSTWUvPRQqLlX5WXIHxdnkb2SwHCX7xRCgcr4tGRdKyFy16fy6irgMkx0hXyfAwdCIEYQJkyssjS7" alt=""/></figure> <p>The fact that lawmakers chose to not invest in Wisconsin residents is just one of the problems with this huge tax cut. The other is that the tax cut almost completely leaves out households with low incomes, instead funneling money into the pockets of the households that need it less. Over the course of a year, families with incomes under $30,000 will receive an average of just $3.33 from this tax cut. Most low-income families will get nothing at all.</p> <figure class="wp-block-image size-large"><a href="https://youtu.be/EA6QcZM5jBU"><img loading="lazy" width="1367" height="711" src="http://www.wisconsinbudgetproject.org/wp-content/uploads/2021/08/image.png" alt="" class="wp-image-10518" srcset="https://www.wisconsinbudgetproject.org/wp-content/uploads/2021/08/image.png 1367w, https://www.wisconsinbudgetproject.org/wp-content/uploads/2021/08/image-768x399.png 768w" sizes="(max-width: 1367px) 100vw, 1367px" /></a></figure> <p>For Wisconsin’s economy to work for everyone, our state needs to invest in healthy and well-educated workers and communities, public infrastructure, and working families. Our state must also invest in its communities of color and help eradicate systemic barriers to shared prosperity. By passing a very large tax cut and refusing to invest in crucial priorities our communities need, state lawmakers are turning away from the chance to ensure that every person in the state has full access to opportunity. </p><p>The post <a rel="nofollow" href="https://www.wisconsinbudgetproject.org/wisconsin-lawmakers-directed-far-more-resources-to-an-income-tax-cut-than-other-critical-priorities">Wisconsin Lawmakers Directed Far More Resources to an Income Tax Cut than Other Critical Priorities</a> appeared first on <a rel="nofollow" href="https://www.wisconsinbudgetproject.org">Wisconsin Budget Project</a>.</p>]]></content:encoded> </item> <item> <title>Wisconsin Legislature Shows Budget Priorities by Voting Against Expanding Health Care, and For a Tax Cut for the Wealthy</title> <link>https://www.wisconsinbudgetproject.org/wisconsin-legislature-shows-budget-priorities-by-voting-against-expanding-health-care-and-for-a-tax-cut-for-the-wealthy</link> <dc:creator><![CDATA[Tamarine Cornelius]]></dc:creator> <pubDate>Thu, 13 May 2021 17:01:58 +0000</pubDate> <category><![CDATA[BadgerCare Plus]]></category> <category><![CDATA[Blog]]></category> <category><![CDATA[HEALTH & HUMAN SERVICES]]></category> <category><![CDATA[STATE BUDGET]]></category> <category><![CDATA[STATE TAXES]]></category> <guid isPermaLink="false">http://www.wisconsinbudgetproject.org/?p=10455</guid> <description><![CDATA[<p>The Legislature is making it more difficult for people with low incomes to meet their basic needs, while refusing to accept proposed changes that would require big corporations and the top 1% to pay their fair share. </p><p>The post <a rel="nofollow" href="https://www.wisconsinbudgetproject.org/wisconsin-legislature-shows-budget-priorities-by-voting-against-expanding-health-care-and-for-a-tax-cut-for-the-wealthy">Wisconsin Legislature Shows Budget Priorities by Voting Against Expanding Health Care, and For a Tax Cut for the Wealthy</a> appeared first on <a rel="nofollow" href="https://www.wisconsinbudgetproject.org">Wisconsin Budget Project</a>.</p>]]></description> <content:encoded><![CDATA[<p>Last week the budget committee of the Wisconsin legislature removed a provision from the state budget that would have provided health insurance to almost 100,000 Wisconsin residents with low incomes, while saving the state more than a billion dollars in tax revenue over the next two years. On the same day, the committee preserved a tax cut that funnels millions of dollars into the pockets of a small group of the extremely wealthy who have rigged the system for their own benefit. This combination of actions demonstrates the legislature’s priorities so far in the budget process: making it more difficult for people with low incomes to meet their basic needs, while refusing to accept proposed changes that would require big corporations and the top 1% to pay their fair share. </p> <p>In his 2021-23 state budget — a budget designed to address inequities facing Wisconsin’s rural families and families of color — Governor Evers proposed that Wisconsin expand BadgerCare, a health care coverage program for low-income Wisconsin residents. Expanding BadgerCare would allow 91,000 additional adults with low incomes to get coverage. Right now a single parent who works full time and has one child earns too much to get BadgerCare if they make $8.38 an hour. More than half the people who would get covered by expansion are currently uninsured, and many of the rest are enduring significant financial hardship to afford insurance.</p> <p>The coverage gains alone should make expanding BadgerCare an open-and-shut case. But there is also a strong financial case for BadgerCare expansion, including:</p> <ul><li>More than $300 million in state savings for BadgerCare every year, due to increased federal cost-sharing;</li><li>An upfront bonus of more than $1 billion, due to a provision in the American Rescue Plan that provides a new financial incentive for states to expand health care coverage; and </li><li>$100 million per year for hospitals that serve BadgerCare participants, due to increased federal cost-sharing. </li></ul> <p>(Read our blog post,<a href="http://www.wisconsinbudgetproject.org/badgercare-expansion-wont-go-away-its-too-good-a-deal"> BadgerCare Expansion Won’t Go Away — It’s Too Good a Deal</a>, for more about the compelling financial case for expansion.) </p> <p>On the same day that the budget committee refused the Governor’s recommendation to expand BadgerCare, it also turned down the Governor’s proposal to rein in a tax credit that gives enormous tax cuts to the very highest earners and shuts out virtually everyone else. The Governor’s proposal would save the state about $240 million a year. The Manufacturing Credit is so slanted that most of the credit that is paid through the individual income tax goes to millionaires. In 2017, there were 11 tax filers among those who claimed the credit, each of whom had incomes of $30 million or more. Those 11 tax filers got an average tax cut of $2 million each.</p> <p>All businesses and families in Wisconsin need the same things in order to thrive: safe communities, a solid transportation network, excellent public schools, accessible health care, and affordable higher education. These priorities require the investment of public resources. But this tax credit allows manufacturers to pay little or nothing in income taxes towards these costs. Instead, other businesses and residents pick up the tab.</p> <p>Companies do not need to create new jobs to claim the credit. Even manufacturers that lay off workers, send jobs overseas, and close factories can get this tax break. (Our blog post, <a href="http://www.wisconsinbudgetproject.org/six-reasons-to-eliminate-wisconsins-costly-ineffective-manufacturing-tax-credit">Six Reasons to Eliminate Wisconsin’s Costly, Ineffective Manufacturing Tax Credit</a> has more information about this wasteful, costly loophole.) </p> <p>Wisconsin needs a budget that invests in the fundamental building blocks for growth and future prosperity: our children, families, schools, health, and equitable communities. By voting down BadgerCare expansion, Wisconsin lawmakers made it harder for people to see a doctor when they need one, and to provide for their families. By voting down limits on a tax cut for the ultra-wealthy, lawmakers continued to provide special benefits for a tiny group of high earners, making it harder for the state to make meaningful investments in infrastructure, education, and communities. These votes threaten to further perpetuate Wisconsin’s status as having among the worst economic and racial disparities in the nation. And by voting down those changes on the same day, lawmakers on the budget committee sent a message that their goal is to reinforce an economy that systematically marginalizes Wisconsin residents with low incomes, and uses resources to enrich only a few. </p><p>The post <a rel="nofollow" href="https://www.wisconsinbudgetproject.org/wisconsin-legislature-shows-budget-priorities-by-voting-against-expanding-health-care-and-for-a-tax-cut-for-the-wealthy">Wisconsin Legislature Shows Budget Priorities by Voting Against Expanding Health Care, and For a Tax Cut for the Wealthy</a> appeared first on <a rel="nofollow" href="https://www.wisconsinbudgetproject.org">Wisconsin Budget Project</a>.</p>]]></content:encoded> </item> </channel></rss> If you would like to create a banner that links to this page (i.e. this validation result), do the following:
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