Month: November 2017

For years, Republicans have argued that federal taxes and spending levels are too high. Now, with a Republican president and majorities in the House and Senate, it’s time to back those words with action. On Thursday, Congress released its plan for the first major tax code overhaul since 1986.

The Tax Cuts and Jobs plan would reduce the number of federal tax brackets from seven to four, and cut tax rates in almost every bracket. It would nearly double the standard deduction and eliminate most other deductions, including the personal exemption. Individuals earning up to $90,000 annually would now be taxed at a rate of 12 percent – down from 25 percent today.

The corporate tax rate would drop from 35 percent – the world’s highest – to 20 percent.

It also creates a new special tax rate for S-corps, sole proprietorships, and pass-throughs at 25%. That’s meant to protect small businesses from paying the higher individual income tax rates. Pass-through entities are now the most common business form in the country, and more than half of Wisconsin’s workforce is employed by a pass-through business.

Under current law, the earnings of businesses organized as pass-throughs are taxed under the individual income tax code, rather than the corporate code. As a result, many individuals see their business earnings taxed under the highest-possible 39.6 percent rate.

Besides the significant tax rate reductions, the plan would eliminate many itemized deductions.The authors estimate that the number of taxpayers itemizing their deductions would fall to fewer than 10 percent, from about one-third today. That’ll add up to significant savings from simplification alone. Perhaps most significantly, federal taxes will be so simple that Americans can file them on a form the size of a postcard.

The estate tax, also known as the death tax, would be repealed in six years. For now, the size of the exemption would double.

The plan would eliminate the federal alternative minimum tax, also known as the AMT. Most other deductions, including those for medical expenses, student loan interest, and state or local income or sales tax, would be eliminated.

All told, the proposal would amount to a $1.51 trillion net tax cut over ten years. If passed, the major changes would generally be effective for tax years beginning after 2017.

Speaker Robin Vos (R-Rochester) is announcing the restructuring of the Assembly Committee on Ways and Means. The committee has been tasked with undertaking comprehensive tax reform.

“Wisconsin taxpayers and businesses have suffered for far too long under an overly burdensome tax code that doesn’t work for families, retirees and job creators,” said Speaker Vos. “This restructured committee will tackle real reform in a transparent process that will give the public ample input in developing a new tax code that is fair and simple with lower rates.”

I have appointed three new Republican members to the committee: Reps. Rob Hutton, Bob Kulp and Shannon Zimmerman. Rep. Mark Spreitzer is joining the committee on the minority side.

“Since 2011, Republicans have provided more than $8 billion in tax relief in Wisconsin, and eliminated several taxes and entire tax brackets,” said Speaker Vos. “However, our work is far from over, and I’m pleased that Rep. Macco and his committee can continue this important effort for Wisconsin taxpayers.”

Speaker Vos has asked the committee to take its time with the massive task and make recommendations before the end of next year in order to be considered in the next biennial budget.

Yesterday, the Wisconsin Department of Transportation (WisDOT) applied for the U.S. Department of Transportation 2017-18 Infrastructure For Rebuilding America (INFRA) grant. WisDOT is seeking a grant to support the construction of a vital portion of the I-94 North-South expansion project that encompasses Foxconn’s manufacturing development and some of Wisconsin’s other fast-growing employers. The

“The I-94 North-South corridor plays a key role in the local and regional economy of southeast Wisconsin,” said Dave Ross, secretary for the Wisconsin Department of Transportation. “With new businesses investing in this region such as Foxconn, Amazon, Uline and Northwestern Mutual, WisDOT is looking to ensure that the transportation of goods and passengers throughout this region meets business and individual needs.”

The I-94 North-South expansion project stretches 36 miles from the city of Milwaukee past the Wisconsin/Illinois state line. Manufacturers and shippers move more than $90 billion in goods to and from businesses in this corridor to major national and international markets. The surrounding economic area in southeast Wisconsin is a major contributor to the state’s manufacturing sector, which is home to the second highest percentage of manufacturing employment among all U.S. states.

WisDOT is seeking an INFRA grant, which would allow for the completion of the I-94 North-South project by 2021, rather than 2032, to support the large-scale development that will have very positive impacts on region and state economies. The final phase is needed to complete the remaining project, improve safety, and to facilitate existing and projected traffic. The completed North-South project will provide safe and efficient travel to help facilitate new job and economic development opportunities for the region.