Walker, state officials differ on income tax withholding

Tax cuts, withholding, school funding all on the table
Walker, state officials differ on income tax withholding
Gov. Scott Walker

VIDEO Walker, state officials differ on income tax withholding

With recent talk coming from governor’s office about an expected budget surplus, lawmakers and interest groups are squabbling over how that money should be spent — or saved.

Gov. Scott Walker said recently he wanted to “return the money to the taxpayers” over the next two years. The nearly $1 billion surplus is expected to put the state back in the black by mid-2015.

“If history predicts, the next thing they do is they rush to spend it,” said Wisconsin Taxpayers Alliance President Todd Berry. The alliance argues the better course of action is to adjust income tax with holdings, which aren’t the same as the tax cut plan generally favored by Republicans.   

“You’re not going to have dramatic initiatives after the 2014 election if you rush to commit yourself to a lot of things now, “Berry said. “You can choose drama and headlines now or you can choose real substantive reform a year from now.”

State Democrats are advocating to infuse the money into the public school system or medical assistance programs. But, political scientists said talking about cutting and returning taxes is always a strategic decision, especially in an election year.

“The good politics is almost always giving money back to the voters through a tax cut and claiming credit for it rather than doing the fiscally responsible thing or the best policy thing,” said Marquette law professor Charles Franklin.

Withholding taxes is something Walker has said is a possibility and would require no action from the legislative floor. Cutting property taxes would have to be passed by lawmakers who have said they’re looking at a property tax cut to be decided on by the end of the session in March.