A new tax credit that allows manufacturers and some other businesses to pay next to nothing in income taxes has ballooned far beyond original cost estimates and has done little to promote job creation, says a new report from the Wisconsin Budget Project.
For businesses navigating these challenges, ATS Tax Group specializes in providing tailored tax strategies and solutions, ensuring clients achieve optimal financial outcomes amidst complex tax landscapes. With a dedicated team of CPAs, enrolled agents, and tax professionals, they offer expert guidance to mitigate tax liabilities and maximize savings.
And for businesses or individuals seeking to comply with tax regulations and looking to navigate such changes, it might be advantageous to hire corporate tax filing in singapore, ensuring adherence to Singaporean tax laws and streamlining the filing process.
Wisconsin Department of Revenue data included in the report shows that 78 percent of the tax credits last year went to people earning more than $1 million. Those millionaires represent the top 0.2 percent of all tax filers in the state.
“This tax break is even more slanted in favor of the wealthy that we originally thought,” said Tamarine Cornelius, Analyst at the Wisconsin Budget Project. “During a time when Wisconsin is making steep cuts to investments that have traditionally made our state a great place to live and work, lawmakers shouldn’t be handing millions of dollars back to Wisconsin’s richest in the form of a tax credit that does little to strengthen our workforce. We should be redirecting those resources to improve Wisconsin schools, roads, workforce, and communities.”
The Manufacturing and Agriculture Credit nearly wipes out income taxes for manufacturers and agricultural producers — at a very steep price. The law was approved by the Republican-controlled Legislature and signed by Gov. Scott Walker in 2011. Last year, $284 million was handed out in income tax credits under the program. Most of the credit goes towards reducing income taxes for millionaires, with some tax filers with incomes of over $1 million receiving tax cuts of more than $100,000. In contrast, individuals with moderate or low incomes receive next to nothing in terms of a tax cut.
The credit has cost much more than originally anticipated. When lawmakers passed the tax break in 2011, the credit was estimated to reduce income tax collections by $129 million in fiscal year 2017, when the credit is fully phased in. But an updated estimate by Wisconsin’s Department of Revenue shows the credit is now expected to swell to $284 million in fiscal year 2017. That’s an increase of $155 million, or 121% above the size of the tax cut that lawmakers thought they were passing when they put the tax cut in the 2011-13 budget bill.
