TUE AM News: Forward Analytics report spotlights $7B in state tax relief over past decade; Advocates in Wisconsin raising concerns about proposed cuts to Medicaid

February 18, 2025

— Individual income tax cuts in Wisconsin have resulted in more than $7 billion in tax relief over the past decade or so, according to a new Forward Analytics report.

The research group, part of the Wisconsin Counties Association, yesterday released an analysis of changes to state income taxes from 2012 to 2023. Rates were lowered several times during the study period, leading to lower tax rates across all of the state’s income tax brackets.

But the report shows the largest cuts by percentage went to single filers with income below $48,000 and married-joint filers with incomes below $68,000, both of whose tax rates were reduced by 24-26%.

Authors wrote that “savings generally declined” at higher incomes, as single filers with incomes between $400,000 and $600,000 and married-joint files with incomes between $530,000 and $800,000 had their tax rates lowered by 10-15%. And those with incomes above $1 million had their rates lowered by 8% or less.

“While the impact of the tax rate cuts was significant for nearly all filers, many may have experienced, in real life, a lesser decline due to rising incomes,” report authors wrote.

Wisconsin had five income tax brackets in 2012, but that has since been changed to four. Five tax cuts during the study period have led to lower rates in the current four brackets, the report shows.

In the lowest income tax bracket, rates have dropped from 4.6% to 3.5%. In the second-lowest, rates have gone from 6.15% to 4.4%. The third bracket — which was created by merging two brackets in 2013 — went from 6.5% and 6.75% to 5.3%. And the fourth, or top bracket, saw the smallest change, from 7.75% to 7.65%.

The report also includes an assessment of the state’s income tax competitiveness, with authors noting cuts have generally improved Wisconsin’s ranking across various measures. But as other states have enacted tax cuts of their own, improvements have been “not as large as might be expected,” authors wrote.

Ultimately, changes in Wisconsin and in other states resulted in “an improvement in Wisconsin’s competitiveness in its bottom rate and a slight worsening” of its rate for top earners.

The state’s bottom rate has moved from fourth-highest among 35 comparable states in 2012 to eighth-highest in 2025 among states with graduated income tax. Meanwhile, its top rate has moved from the 11th or 10th-highest — depending on which states are included in the comparison — to ninth-highest among 27 comparable states.

See the report and release.

— Advocates in Wisconsin are ringing the alarm bell about proposed cuts to federal Medicaid funding, warning any reductions would have serious consequences in the state.

Lisa Davidson, president and CEO of long-term care network LeadingAge Wisconsin, yesterday said “it’s really important that we find a way for that funding to be solvent for the future,” given the state’s aging population. She noted Medicaid is the only program that pays for long-term care services and supports.

“Having one of those funding streams being taken away, the downstream implications would be extremely significant across all sectors of Wisconsin,” she said.

Davidson was a featured guest on WisconsinEye’s latest “Newsmakers” program, which also featured Tami Jackson, public policy analyst with the Wisconsin Board for People with Developmental Disabilities. Both speakers argued against proposals to cut federal dollars for Medicaid or impose new restrictions on the program.

Jackson noted many Medicaid-funded programs support children with disabilities through school-based services, while others help older adults live independently despite needing additional support.

“Medicaid is really a part of people with disabilities’ lives, because it provides care that they cannot get anywhere else, that they need to live their lives, through their whole lifespan,” she said.

Program host Lisa Pugh noted more than 1.32 million people in Wisconsin were enrolled in Medicaid programs as of December 2024, or about one fifth of the state’s population. Funding from the federal program goes to at least 28 different programs in the state. It covers four out of every seven nursing home residents, one in six Medicare beneficiaries and a third of all people with disabilities in Wisconsin.

Jackson referenced a half-dozen proposals that have been floated in recent months to alter the Medicaid program, though she said any of them would mean “dramatically less money” going to state programs.

“Some of them would be changes that would make very deep cuts initially, and then those cuts would continue and deepen over time,” she said. “And other proposals would really shift costs that states don’t cover now to states … the reality is, the outcome of all of them is very, very deep cuts to Medicaid.”

Watch the video.

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— Kurt Bauer, president and CEO of WMC, says there will be “some unknown consequences” with President Trump’s proposed tariffs, the impact in Wisconsin, and the fast-changing developments coming from the White House.

“In 14 years of doing this, I’ve never seen anything like it,” Bauer told WISN’s “UpFront,” which is produced in partnership with WisPolitics. “Each day, it seems like there’s another development, and we have to try and figure out what’s going to happen and how it’s going to impact our members. It’s really drinking from a fire hose right now, and we’re not exactly sure what it all means.”

A recent Wisconsin Manufacturers & Commerce survey found 56% of Wisconsin business leaders said they oppose tariffs on Canada and Mexico.

“The biggest concern is that Canada and Mexico are our two largest trading partners,” Bauer said. “So we have a positive trade balance with Canada, we want to continue that. We have a long-standing relationship. We are a manufacturing state. We’re an agricultural state. We make things. We grow things. We process them. We want to sell them around the world.”

Within that same survey, about 50% of business leaders said increasing tariffs would have a negative effect on their business, 26% said positive.

“On the one hand, steel manufacturers and aluminum manufacturers in Wisconsin may benefit, but that could have an impact on automotive manufacturing and construction,” Bauer said. “It could be broad-ranging. There will be some winners. There will be some losers.”

Bauer said the reigning sentiment and potential impact at the moment is uncertain, both for business leaders and consumers.

“It’s a moving target, we’re just not sure,” Bauer said. “It’s going to be several months before we truly understand. There will be some unknown consequences, to be sure. I think that by and large, our members are supportive of what the president is trying to accomplish to create a free, fair and reciprocal trade with other nations.”

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