Wisconsin 2023-2024 Regular Session

Wisconsin Senate Bill SB977

Introduced
1/30/24  
Refer
1/30/24  
Report Pass
2/7/24  

Caption

Expansion of the second individual income tax bracket. (FE)

Impact

The proposed amendments to the tax brackets will result in significant changes to how income tax is calculated for many Wisconsin taxpayers starting from 2023. For instance, the second tax bracket for single individuals which currently applies to income exceeding $14,320 will now cover income exceeding $14,320 but not exceeding $112,500. For married couples filing jointly, the threshold increases to $150,000. This adjustment is seen as an effort to offset inflationary pressures and provide fiscal relief to the middle class and those on the cusp of higher tax liabilities.

Summary

Senate Bill 977, titled the 'Expansion of the Second Individual Income Tax Bracket,' seeks to amend existing tax laws in Wisconsin regarding the individual income tax rates for certain categories of taxpayers. Specifically, the bill proposes new tax brackets that will adjust the income ranges for the second tax rate of 4.40% for single individuals, fiduciaries, heads of households, and married couples filing jointly and separately. This change aims to bring about relief for middle-income earners by effectively raising the threshold for taxable income under this bracket, thereby allowing more income to be taxed at the lower rate.

Contention

However, the bill has generated some debate among legislators and stakeholders. Proponents argue that this adjustment is necessary to support workers and families who may have been disproportionately affected by rising costs in recent years. Conversely, opponents may view this as a potential revenue loss for the state, raising concerns about long-term fiscal sustainability. The differing opinions highlight the ongoing challenge of balancing tax fairness with the need for state funding, particularly in light of competing priorities in state budgets.

Additional_info

Furthermore, SB977 reintroduces certain provisions related to tax indexation based on the Consumer Price Index, which will ensure that tax brackets will continue to adjust in response to inflation in the future. This is an important aspect of the bill intended to keep tax policies responsive and equitable over time. As the state continues to navigate its fiscal responsibilities, the implications of SB977 on taxpayers and public services will remain a pertinent topic of discussion in upcoming legislative sessions.

Companion Bills

No companion bills found.

Previously Filed As

WI AB1020

Expansion of the second individual income tax bracket. (FE)

WI AB262

Phase-in changes to individual income tax rates and brackets. (FE)

WI AB386

Lowering the individual income tax rates in the third bracket and increasing and expanding the retirement income subtraction. (FE)

WI SB435

Lowering the individual income tax rates in the third bracket and increasing and expanding the retirement income subtraction. (FE)

WI AB1

Establishing a flat individual income tax rate. (FE)

WI SB1

Establishing a flat individual income tax rate. (FE)

WI AB438

Baseball park district administration and funding for improvement of professional baseball park facilities. (FE)

WI HB2268

Income tax, state; individual tax brackets, deductions, and exemptions.

WI HB2561

Revenue and taxation; income tax; individuals; rates; brackets; effective date.

WI HB1788

Revenue and taxation; individual income tax; rates; brackets; standard deduction amounts; effective date.

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