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Monday, Jul. 3, 2023

Is Wisconsin’s income tax rate highest in the Midwest for residents with the highest incomes?

Tom Kertscher, Wisconsin Watch
no

Among Midwestern states, Minnesota has the highest income tax rate in the highest-income tax bracket — 9.85% for an individual with annual income over $183,340.

Wisconsin is next, at 7.65%, for individuals earning over $304,170.

Illinois and Michigan both have flat tax rates of 4.95% and 4.25%, respectively. Iowa currently has a 6% top tax bracket but is phasing in a 3.9% flat rate by tax year 2026.

The Wisconsin Legislature approved a 2023-25 state budget, awaiting action by Gov. Tony Evers, that would eliminate one of the four tax brackets and reduce all income tax rates.

Wisconsin's top rate would drop to 6.5%. Residents earning $1 million or more would save an average $30,286.

A Wisconsin 3.25% flat tax would raise gross state product 4.5% and after-tax household income 5.27% and drop tax revenue 16.8%, the University of Wisconsin-Madison Center for Research on the Wisconsin Economy said in a February 2023 report.

See a full discussion of this at Wisconsin Watch

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