GOP governor candidate Tim Michels says he is open to a flat income tax for Wisconsin

Republican candidate for governor Tim Michels greets supporters at the Square Tavern in downtown Baraboo on Tuesday, Oct. 4.
Republican candidate for governor Tim Michels greets supporters at the Square Tavern in downtown Baraboo on Tuesday, Oct. 4.
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BARABOO - Republican candidate for governor Tim Michels is signaling he is open to enacting a flat income tax in Wisconsin but would not pursue a plan if it raised taxes on the residents with the lowest incomes.

"I'm going to sit down with all the smart tax people, we're going to figure out how low we can get the income tax," Michels said. "Right now, it looks like we could get it somewhere just below 5%. If you had a flat tax at that number, the tax level would actually come up for those on the lowest income bracket. I do not want to raise the taxes on anyone."

Michels, a wealthy construction executive who co-owns Michels Corp., made his comments to reporters Tuesday at the Square Tavern in downtown Baraboo where he held a campaign event to celebrate receiving the endorsement of the powerful Tavern League of Wisconsin.

Paul Salzwedel, owner of Tall Paul's in Ripon, said the group was endorsing Michels, after previously endorsing Michels' primary opponent Rebecca Kleefisch, because of Democratic incumbent Gov. Tony Evers' stay-at-home order that largely shuttered bars throughout the state for two months in spring 2020 to curb the spread of the coronavirus pandemic.

"I'm here to tell you that this is the right guy at the right moment," Salzwedel said at the event.

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Wisconsin’s income tax rates start at 3.54% and rise to 7.65%. Republicans who control the state Legislature over the past decade have focused their income tax rates on the middle brackets but largely left in place the top rate, which is levied on individuals for income of $267,000 and up.

Evers has backed progressive income taxes, as have his fellow Democrats who argue those who make more should pay a larger share of their income to the state.

As governor, Evers has signed two rounds of Republican-authored income tax cuts. He has touted the tax cuts after pledging during his 2018 run to cut income taxes for the middle class by at least 10%.

"Governor Tony Evers is focused on lowering costs for working families and helping them keep more of their hard-earned money in their pockets. That’s why he signed a 15% income tax cut for most Wisconsinites, and has pledged to cut income taxes by another 10% in his second term," Evers campaign spokeswoman Kayla Anderson said in a statement.

"Tim Michels doesn’t have a serious plan, he’s just looking for excuses to pass massive tax cuts for himself, while leaving working families behind."

Michels’ tax records from 2020 show he owed $3.7 million in state income taxes — an amount that suggests he reported income of tens of millions of dollars that year. Evers earns around $152,000 per year as governor. In 2020, Evers owed $11,900 in income taxes.

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Wisconsin was the first state to impose a workable income tax in 1911. The federal government adopted its current income tax system two years later.

Thirty-two states have progressive income taxes, according to the Tax Foundation. Eleven states have flat income taxes and seven have no income taxes.

Minnesota’s income tax rates start at 5.35% and go up to 9.85%. Illinois has a flat income tax rate of 4.95% and Michigan has a flat income tax rate of 4.25%.

Iowa’s income tax rates start at 0.33% and rise to 8.53%. Republican Gov. Kim Reynolds recently signed a law that will give the state a flat tax of 3.9% in 2026.

Michels has pledged "massive tax reform" if elected governor but has not released details of his positions or answered questions about what policies he would pursue aside from eliminating the personal property tax, which is levied on businesses for their equipment and furniture.

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Republicans who control the Legislature and Evers have both proposed plans to end the personal property tax but could not agree in 2021 how to do so.

Michels said Tuesday he would "sit down and we'll figure out what the best tax reform is for Wisconsin."

"Wisconsin will become more competitive with other states, more young people are going to want to stay here, more businesses are going to want to relocate here," he said.

Contact Molly Beck at molly.beck@jrn.com. Follow her on Twitter at @MollyBeck.

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This article originally appeared on Milwaukee Journal Sentinel: Tim Michels says he is open to a flat income tax for Wisconsin