State and local taxes totaled $27.9 billion in 2015, up 1.4% from last year. As a share of personal income, the state-local tax burden fell from 11.2% of income in 2014 to 11.0% in 2015. Local taxes, which fell from 4.1% to 3.9% of income, drove the decline. The state tax burden was unchanged at 7.1% of income. By comparison, federal tax collections rose to an estimated $52.1 billion and claimed 20.5% of income.
Wisconsinites paid an estimated $80 billion to federal, state, and local governments in 2015. Although federal payments accounted for two-thirds of that total, the focus here is on the taxes that are imposed within our borders.
State-local taxes totaled $27.9 billion in 2015, up 1.4% from last year and 13.0% since 2010. State taxes are mostly on individual and corporate incomes, sales, fuel, and wages (unemployment insurance). Local taxes comprised the remainder, with property taxes accounting for 95% of all local taxes.
Personal income, which includes wage and salaries, as well as investment income and government benefits, rose faster (3.7%) than tax collections (1.4%) last year. As a result, the state-local tax burden fell from 11.2% of income in 2014 to 11.0% in 2015. Local taxes, which fell from 4.1% to 3.9% of income, drove the decline. The state tax burden was unchanged at 7.1% of income.
Wisconsin’s tax burden relative to income has been both up and down over the past decade. Tax collections fell during the 2007-09 recession, causing the state-local burden to fall to 11.0% of income in 2009. Collections rebounded as the economy improved and taxes were raised on businesses and high-income individuals, pushing the tax burden up to 11.8% by 2011. Due to income tax cuts in 2013 and 2014, as well as tightening of state property tax limits, the tax burden fell in each successive year. Wisconsin’s major state and local taxes are reviewed below and in the table on page three.