The state government provides financial support to local governments, but the amount of Shared Revenue–the largest and most flexible source of state support for counties and municipalities–has fallen by nearly half over the last twenty-five years. Our communities are the lifeblood of Wisconsin, and we need to make sure they have the resources they need to remain economically vibrant. How would a flat tax affect communities across the state? Wisconsin’s current graduated income tax rates means the wealthiest households are more likely to pay what they owe, providing resources that could be used to fund programs that benefit kids and families and combat wealth and income inequality. Without this basic foundation, many Wisconsinites will be left further behind, particularly children and families of color and those furthest from opportunity. How would a flat tax affect children and families in Wisconsin?Ī flat income tax could dramatically reduce state revenue, which would restrict resources available to invest in public services and supports that kids and families need to thrive. This could mean that some Wisconsinites with low incomes would see their income taxes, while wealthy residents would pay less. If state leaders were to adopt a flat income tax there would be just one bracket with the same tax rate for everyone. Those with low incomes pay a lower income tax rate than higher-income Wisconsinites (see table below). Currently, Wisconsin has a graduated income tax system with four tax brackets. What is a flat income tax?Ī flat income tax is a system where everyone pays the same tax rate, regardless of income. This Q&A examines how a flat income tax could harm children and families in Wisconsin and provides alternatives to ensure that every kid, every family, and every community in Wisconsin can thrive.
This is particularly harmful for families across the state who have been blocked from opportunity, including children and families of color, those with low incomes, and families in rural communities. When state leaders cut taxes, it often benefits wealthy individuals and corporations and restricts the resources available to support children and families.
Public resources should be invested in a way that broadly benefits everyone in Wisconsin, ensuring that families can make ends meet, and access affordable health care, strong schools and child care.
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