Among the more than 50 research briefs and reports we publish each year, the Wisconsin Policy Forum always includes at least one analyzing the overall tax levels in our state. For more than a half century, the Forum and one of our two predecessor organizations, the Wisconsin Taxpayers Alliance, have worked to compile and publish data on every single state and local tax here.
This year, that work led to a remarkable finding. Using figures from the U.S. Census Bureau for 2022 – the latest year available – the Forum found that state and local taxes had fallen to just 9.9% of personal income in the state. This ratio – commonly known as the state’s tax burden – has never been lower in our decades of records. Wisconsin’s tax burden is now well below the U.S. average of 11.1% and our ranking among states has fallen from third-highest nationally in 2000 to 35th highest in 2022. That is the lowest ranking on record for Wisconsin and the drop in the state’s tax burden over this period is also the largest of any U.S. state.
Though many will welcome this trend toward lower tax levels, the Forum is also careful to point out the tradeoffs that have come with it. For example, the state’s ranking on K-12 spending has also fallen substantially, dropping from eighth-highest nationally in 2000 to #31 in 2022. Spending on public safety has also fallen, with the state’s rank on fire protection spending now tied for the lowest on record at 39th.
Elected leaders from across the political spectrum were quick to cite these striking findings, from Democrats like Gov. Tony Evers and state Sen. Chris Larson of Milwaukee to Republicans such as Senate Majority Leader Devin LeMahieu and Assembly Speaker Robin Vos. The Wisconsin Department of Revenue – an agency that the Forum frequently cites in our work – also called attention to the findings. Not surprisingly, elected officials didn’t agree in every respect about what the trends mean or who should receive the most credit for the drop in taxes. Both Evers and lawmakers have noted, for example, that the state approved a $1 billion income tax cut in 2021 that was added to the budget by GOP legislators and then signed by the governor.
Ultimately, this example helps to show the value of the Forum’s research and service to our state. We seek to document the essential facts and context about what’s happening with state and local government in Wisconsin while still leaving room for elected officials and ordinary citizens to make up their own minds about these trends. It’s a critical mission and, as 2024 comes to a close and 2025 begins, we are grateful to our members for their support of our work!
-Jason Stein