Wisconsin and Minnesota are part of one region. Both states have a great quality of life, outstanding workers and excellent education systems. We both have great recreational opportunities, and we both do well on health indicators, poverty rate indicators and environmental quality. At the same time, both states historically have had high taxes.
Wisconsin wants to create more jobs and raise incomes. While many factors affect a state’s business climate, we know that relatively high taxes have hurt our growth, so we’re working on reducing them and reforming our tax system. We’re keeping in mind the advice I recently got from a major multinational company with many employees in Wisconsin: “Don’t price yourself out of the market.”
We’ve passed several major tax reforms since Gov. Scott Walker took office, reducing taxes by $1.4 billion. We’ve cut individual income taxes, with rate cuts for all brackets and the biggest reductions for middle-class taxpayers. We’ve passed major new business tax incentives, most notably a powerful manufacturing and agriculture tax credit.
Minnesota and Wisconsin are now taking very different approaches to taxes. While Wisconsin is cutting taxes for individuals and businesses, Minnesota is unapologetically raising taxes. Wisconsin is controlling spending and using budget surpluses for tax relief, while Minnesota is raising taxes to fuel more spending. Because of our budget reforms and growing economy, Wisconsin is well-positioned for future tax cuts.
The differences between Minnesota and Wisconsin are dramatic. For individual income taxes, Wisconsin has a lower top rate, a lower middle-class rate and a lower entry-level rate. Wisconsin has a capital gains exemption of up to 100 percent for five-year investments in Wisconsin businesses, while Minnesota has no capital gains exemption. Wisconsin eliminated its estate tax; Minnesota still has one, plus a new gift tax. Wisconsin has the new manufacturing and agriculture tax credit, plus a research and development credit. Minnesota has imposed sales taxes on warehousing and commercial and farm equipment repair; Wisconsin does not tax those services.
Businesses and individuals in Minnesota should look at Wisconsin. They’ll find a great quality of life with a more competitive tax system. Wisconsin is open for business.
Richard G. Chandler is secretary of the Wisconsin Department of Revenue.