The Tax Foundation

Research Areas

Wisconsin

The Facts on Wisconsin's Tax Climate

Here are some basic facts on Wisconsin’s tax system and how it compares to other states:

Tax Freedom Day Arrives on April 24 in Wisconsin
Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2008, Wisconsin taxpayers had to work until April 24 to pay their total tax bill, ranking it 14th highest in the nation. This is one day after national Tax Freedom Day (April 23). The Tax Freedom Days of neighboring states were; Iowa, April 16 (ranked 34th) Minnesota, April 27 (ranked 8th) Michigan, April 16 (ranked 31st) and Illinois, April 23 (ranked 16th).

Tax Freedom Day has been projected using the most up-to-date economic and budget projections from official government agencies. However, Tax Foundation estimates of average state and local tax rates for 2008 will not be released until later this spring as we await more up-to-date data from various government agencies.
Full study of Tax Freedom Day, nationwide and in each state

Wisconsin's State/Local Tax Burden Among Nation's Highest in 2007
During the past three decades Wisconsin's state and local tax burden has consistently ranked among the nation's highest. Estimated at 12.3% of income, Wisconsin’s state and local tax burden percentage ranks 7th highest nationally, well above the national average of 11.0%. Wisconsin taxpayers pay $4,736 per capita in state and local taxes, and per capita state income is $38,639.
Wisconsin's State-Local Tax Burden, 1970-Present

Wisconsin's 2008 Business Tax Climate Ranks 39th
Wisconsin ranks 39th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: Iowa (45th), Minnesota (42nd), Michigan (29th) and Illinois (28th).
50-State Comparison of Business Tax Climates (data only)
2008 State Business Tax Climate Index, Fifth Edition (full study)

Wisconsin's Individual Income Tax System
Wisconsin passed the nation's first personal income tax in 1911. Now its personal income tax system consists of four brackets with top rate of 6.75%, kicking in at an income level of $142,650. This top rate ranks the state 18th highest among states levying personal income taxes. Wisconsin's 2005 individual income tax collections were $989 per person, which ranked 12th highest nationally.
50-State Table of Individual Income Tax Rates
50-State Table of State Individual Income Tax Collections
50-State Table of State and Local Individual Income Tax Collections Per Capita

Wisconsin's Corporate Income Tax System
Wisconsin's corporate tax structure consists of a flat rate of 7.9% on all corporate income. Among states levying corporate income taxes, Wisconsin's rate ranks 18th highest nationally. In 2006, state-level corporate tax collections (excluding local taxes) were $145.45 per capita, which ranked 24th highest nationally.
50-State Table of Corporate Income Tax Rates, 2000-2008
50-State Table of State and Local Corporate Income Tax Collections Per Capita and Per Household, 2005
50-State Table of State Corporate Income Tax Collections Per Capita, 2006

Wisconsin Levies Sales Tax below National Median; Gasoline Tax among Highest in the Nation
Wisconsin levies a 5% general sales or use tax on consumers, which is slightly below the national median of 5.4%. State and local governments combined collect $$1,102 per capita in general sales taxes, which ranks 36th highest nationally. Wisconsin's gasoline tax is variable and stands at 32.9 cents per gallon, which is the nation's 8th highest. Wisconsin's cigarette tax stands at $1.77  per pack of twenty and ranks 12th highest nationally. The sales tax was adopted in 1961, the gasoline tax in 1925 and the cigarette tax in 1939.
50-State Table of Sales and Excise Tax Rates
50-State Table of State and Local General Sales and Gross Receipts Tax Collections Per Household and Per Capita, Fiscal Year 2005

Wisconsin Property Taxes: Among the Nation's Highest
Wisconsin is one of the 37 states that collect property taxes at both the state and local levels. As in most states, local governments collect far more. Wisconsin's localities collected $7,324,843,000 in property taxes in fiscal year 2004, which is the latest year the Census Bureau published state-by-state property tax collections. At the state level, Wisconsin collected $104,158,000 in property taxes during FY 2004, making its combined state/local property taxes $7,429,001,000. That brings its per capita collection to $1,350, which ranks 11th highest nationally.
State property tax collections per capita by state

Federal Tax Burdens and Expenditures: Wisconsin is a Donor State
Wisconsin taxpayers receive less federal funding per dollar of federal taxes paid than the average state. Per dollar of federal tax collected in 2005, Wisconsin citizens received approximately $0.86 in the way of federal spending. This ranks the state 39th highest nationally and represents an increase from 1995, when Wisconsin also received $0.80 per dollar of taxes in federal spending (ranked 43rd nationally). Neighboring states and the federal spending received per dollar of federal taxes collected were: Iowa ($1.10), Minnesota ($0.72), Michigan ($0.92), and Illinois ($0.75).
Comparing the amount of federal taxes sent to Washington with the amount of federal spending coming back to the state

Articles from the Tax Foundation