Assembly Speaker Robin Vos announced plans last week to reintroduce a proposal in January aimed at eliminating state taxes on retirement income, according to an article from the Wisconsin State Journal.
The move by legislative Republicans comes after previous attempts to enact broader income tax cuts were either vetoed or faced a guaranteed veto from Democratic Gov. Tony Evers.
While Vos has maintained his desire for more comprehensive tax cuts, he expressed optimism about finding consensus on the retirement tax exemption proposal. In September, Republicans introduced a bill that sought to exempt up to $100,000 in retirement income, including funds from 401(k) accounts and pension funds, for individuals aged 67 or older. This provision was attached to a broader proposal to reduce the tax rate from 5.3% to 4.4% for the state’s third income tax bracket, covering individuals earning between $27,630 and $304,000, as well as married filers earning between $36,840 and $405,000.
While the bill successfully passed the Assembly, it did not receive a Senate vote due to Evers’ pledge to veto the proposal, citing concerns that it would lead Wisconsin down a path to financial instability. Two other proposals aiming to cut the tax rate for the same taxpayer group were also vetoed by Evers.
Vos did not provide specific details about the upcoming bill but mentioned that it would exclude the proposed income tax cut for the third bracket.
Discussing tax cuts more broadly, Senate Minority Leader Dianne Hesselbein expressed her willingness to collaborate with Republicans to provide tax breaks for middle-class workers. Senate Majority Leader Devin LeMahieu also indicated in early December that he would be open to working with Evers on tax reform if the governor showed a similar willingness.
