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Tax Issues Policy Recommendations

Achieve an Equitable Tax System to Meet Families’ Needs

Achieve an equitable tax system and revenue growth that meets the needs of children and families in good economic times and bad and evolves with economic change. 

Limit corporate tax avoidance by supporting changes such as combined reporting to ensure that businesses pay their fair share of taxes and contribute sufficient revenue to promote economic growth in Wisconsin. Large, multistate corporations are becoming increasingly sophisticated in using subsidiaries located in other states to shelter their income and avoid states’ corporate income taxes.  Wisconsin could remedy that problem and make the corporate tax system much more equitable by following the lead of the growing number of states that use “combined reporting,” which requires a corporation and its subsidiaries to file a combined report of their income and expenses.

Increase the Homestead Tax Credit and index it for inflation.
The Homestead tax credit provides well-targeted property tax relief for low-income homeowners and renters, but unlike other parts of the tax code it is not indexed for inflation.  As a result, the value of the credit has been substantially reduced by inflation over the last 17 years, and it assists fewer taxpayers.  The maximum credit should be increased and the formula for calculating the credit should be indexed for inflation.  For more information on this policy change, see "Ending the Erosion of the Homestead Credit."