WISCONSIN — Wisconsin’s state and local tax burden — the ratio of what residents pay in taxes and receive in income — fell to its lowest level in more than half a century, a new report by Wisconsin Policy Forum finds.

What You Need To Know

  • Wisconsin’s state and local tax burden — the ratio of what residents pay in taxes and receive in income — fell to its lowest level in more than half a century, dropped from 9.92% in 2023 to 9.62% in 2024

  • Wisconsin Policy Forum officials say this happened because of a growth in incomes combined with efforts by the state to control local property taxes

  • Though sales tax collections had the slowest year-over-year growth since 2010 last year, rising by 1.8%, it makes up a larger share of the overall state and local collections

  • The report also said it will be hard to maintain the downward tax burden trend, with personal income growth in the state lagging behind nationwide trends, a lack of control over economy growth and a reliance on a reserve of state funding that could eventually run out

It dropped from 9.92% in 2023 to 9.62% in 2024. That percentage has declined by nearly a quarter since 2000 and a third since 1970.

Wisconsin Policy Forum officials say this happened because of a growth in incomes combined with efforts by the state to control local property taxes.

Revenues from state and local taxes slowed “substantially,” rising by 1.9% from 2023 to 2024, the smallest annual increase since 2017. This growth rate was less than inflation rate and less than half the rate of personal income growth in the state, which grew by 5.2% in the latest figures.

“Because this latest increase in income easily outstripped the growth in tax collections in 2024, the overall tax burden was driven down,” the Policy Forum report reads.

The latest report findings aren’t surprising given a report released in November of last year by the Wisconsin Policy Forum that found the amount Wisconsinites pay in taxes had fallen to its lowest level on record.

Total state taxes in 2024 saw a modest 1.6% increase, rising to $24.65 billion, according to Wisconsin Policy Forum. That was up from $24.27 billion in the year prior. The three largest state taxes, individual income, sales and corporate profits, showed slow growth.

Local tax collections also grew by more than 2% for the fifth straight year, with a 2.7% increase in 2024.

Federal taxes paid by Wisconsinites are also estimated to have climbed. Though the numbers haven’t been finalized, it’s projected to have increased 5.4% in 2024.

There are things that have helped hold down collections in certain areas, such as in individual income taxes and property taxes.

Individual income tax collection rose by 3.2%, which is just slightly above the 20-year average growth rate — 3%. Wisconsin Policy Forum officials say tax cuts in the recent 2021-23 and 2023-25 state budgets have helped keep this steady.

Gross local property taxes increased at a rate that was the highest since 2008. In 2024, that increase was 4.6%. However, the amount in taxes actually paid by home and business owners was held down by state property tax credits, and net property taxes only grew by 2.6% in 2024.

One area that hasn’t had many cuts or changes in recent decades is sales taxes.

Though sales tax collections had the slowest year-over-year growth since 2010 last year, rising by 1.8%, it makes up a larger share of the overall state and local collections. In 1970, it made up a little under 12% of the revenue. Now, it has risen to 22.4%, the highest on record, according to Wisconsin Policy Forum.

Officials have allowed these numbers to rise, according to the report, which points to the approval of a 0.5% county sales tax and additional ones in Milwaukee and Milwaukee County.

Wisconsin Policy Forum said this means “some taxpayers can end up shouldering a larger share of the tax burden even as it shrinks overall.”

In particular, those with lower incomes tend to spend more of their money on necessities that are subject to sales taxes. Income taxes tend to be paid by those with greater incomes, meaning sales tax can fall disproportionately on those with less income.

“As a result, Wisconsin’s tax system has become less progressive than it otherwise would have been, or more favorable toward those with greater incomes and more real estate properties,” the report cautions.

The report also said it will be hard to maintain the downward tax burden trend, with personal income growth in the state lagging behind nationwide trends, a lack of control over economy growth and a reliance on a reserve of state funding that could eventually run out.

Officials said “economic expansion” and “a more efficient government” will be needed to keep state and local taxes affordable while also keeping good quality public services.

Correction: A previous version of this story listed in the headline the incorrect amount of time that the tax burden has been at its lowest level. This error has been corrected. (Jan. 15, 2025)

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