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Don't ask Wisconsin for your tax cut right away

Jon Byman

Don't ask Wisconsin for your tax cut right away

CREATED Jul. 12, 2013

MADISON - Wisconsin just cut your taxes as part of the state budget, but don't ask for your money right away.

As it stands now, the amount of money your employer withholds from your paycheck for state taxes won't change.  That's because the state hasn't changed withholding tables, the map employers use to determine how much to take out of your check for taxes.

Unless the state updates the tables, you won't see the effect of the tax cut until you get your refund in 2014.

It's actually a problem that predates the most recent tax cut.  "The withholding tables, even before this income tax cut, were significantly out of date and really need to be updated to reflect current tax policy," said Wisconsin Taxpayer's Alliance economist Dale Knapp.

Knapp points out that nearly everyone in the state gets a tax refund every year.

When it comes to the tax cut, there are two schools of thought.

On one side, if you believe putting money into people's hands will spur the economy, the argument is that you should do that as quickly as possible.

But, Knapp points out, the size of the tax cut means that spreading it out over a year's worth of paychecks means many people would barely notice the difference.  Giving it to people in one lump sum might make it more noticeable, and spur those people to spend the money.

 

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