Wisconsin Gov. Scott Walker (R) said earlier this week that his administration will consider ending the personal income tax as part of a major review of the state’s tax structure.
In comments first reported by WisPolitics.com, Walker told reporters at a stop in Pembine that some states without personal income taxes are in better economic shape and are better equipped to compete for jobs.
“There are many states that do very well, better than most states in the country, that have no income taxes,” Walker said, according to WisPolitics. “That’s one thing for us to look at. Is that feasible? What would that mean in terms of an economic boost? That’s not only for individuals, but small businesses in this state.”
Two top officials in the Walker administration, Lt. Gov. Rebecca Kleefisch and Revenue Secretary Rick Chandler, are holding roundtable discussions across the state to solicit input on tax reform. They held their first gathering last week.
“Gov. Walker’s goal is to lower the overall tax burden every year he is in office,” Tom Evenson, Walker’s press secretary, said in an e-mail.
But whether completely eliminating the state income tax is actually feasible is another question. Wisconsin relied on personal income taxes for almost 42 percent of its total tax revenue in 2012, according to the Census Bureau, or almost $6.8 billion of the nearly $16 billion it collected. The state took in an additional $4.3 billion in general sales taxes, the only other revenue stream that produced anywhere near what the income tax does.
States that rely most heavily on income tax revenue:
(Sources: The Tax Foundation, U.S. Census Bureau)
States that rely most heavily on sales tax revenue:
(Source: The Tax Foundation, U.S. Census Bureau)
Still, cutting taxes could be a strong foundation from which to run for president, and Walker reportedly has his eye on a 2016 bid. He’ll have to win reelection first, and Democrats are making him a top target in 2014, but polls show the first-term Republican is running narrowly ahead of his likely Democratic rival.