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Experts Weigh In on Possible State Income Tax Cut

As President Barack Obama begins his second term on Monday, taxes and the economy are sure to be key issues. At the end of the year the country dodged the so-called “fiscal cliff.” But another round debt ceiling talks looms in the near future.

This national debate over taxes and spending echoes loudly here in Wisconsin as well. Governor Scott Walker is touring the state this week, in part, to garner support for a middle-class income tax cut. This comes after he laid the groundwork for his taxation plans during his State of the State address Tuesday.

To help us understand the latest tax issues, UWM economist Scott Drewianka and Marquette University political scientist John McAdams joined Lake Effect’s Amy Kiley. Drewianka started by explaining whether state income tax reductions might encourage household spending and help Wisconsin’s economy.

"Scott Walker does appear to have put Wisconsin in pretty decent financial shape. Something like a more or less real balanced budget. Now where’s he going to find the money for any kind of significant tax reduction? I don’t know. We’d have to see the details."