23 Jan Kanavas outlines new Invest Wisconsin agenda
Madison, Wis. – State income tax cuts are among the proposals introduced as part of the Invest Wisconsin 2.0 package endorsed by a group of lawmakers headed by State Sen. Ted Kanavas, R-Brookfield.
The legislative package, which also includes a “NanoSTEM” initiative, nanotechnology tax credits, and other proposals to stimulate investment, seeks to change the state’s marginal income rates starting in the 2007 tax year. Under the measure, all income tax payers would see a one percent reduction in their marginal income tax rates, which would reduce the overall income tax burden by $65 million in the first year, according to the Legislative Fiscal Bureau.
Kanavas said the proposals are designed to stimulate the economy, give businesses the tools they need to succeed, and build on legislation passed as part of the first Invest Wisconsin package. That package included laws to promote rural broadband development and improve the state’s investment climate.
Given the new composition of the Legislature, where Democrats now control the Senate, Kanavas acknowledged the tax rate cuts face an uphill climb.
“I’m not convinced the Democrats are interested in cutting taxes, especially given the governor’s proposal for a [cigarette] tax increase,” he said.
Gov. Jim Doyle, who will outline his budget proposals in the coming weeks, has proposed a $1.25 per pack increase in the state cigarette tax as part of a statewide smoking ban.
Under the tax piece of the new Invest Wisconsin package, income tax rates in four tax brackets would be reduced as follows:
• 4.60 percent to 4.554 percent.
• 6.15 percent to 6.089 percent.
• 6.5 percent to 6.435 percent.
• 6.75 percent to 6.683 percent.
It is the first tax rate cut proposal to surface since John Jazwiec, the outspoken chief executive of RedPrairie Corp., a software developer for supply chain logistics, called for a 50 percent cut in state income taxes. Jazwiec made the proposal last September in an address to the Independent Business Association of Wisconsin.
Under a proposal endorsed by Kanavas, Sen. Sheila Harsdorf, R-River Falls, and State Reps. Terry Moulton, R-Chippewa Falls, and John Murtha, R-Baldwin, the state would appropriate $3 to $4 million to the University of Wisconsin Eau Claire, UW-Stout, and Chippewa Valley Technical College. The funding would jump-start a cooperative agreement between these institutions to promote nanotechnology research. It would pay for new faculty member researchers and equipment and laboratory materials.
The same quartet of lawmakers plan to introduce a separate bill to establish a nanotechnology tax credit. It provides $2.5 million in tax credits during the 2007-09 biennium as an incentive to invest in nanotechnology. Under the bill, the credits may be claimed and carried over for expenses associated with sales and the use of equipment in nanotech research, development, and manufacturing.
Tax credits also may be claimed for payments made to a Wisconsin higher education facility or group of facilities to offset the cost of product development and the use of research facilities.
Other bills that are part of the Invest Wisconsin package seek to provide $25 million in additional investment tax credits under Wisconsin Act 255, provide education tax credits for the continuing education of employees, establish a capital gains exemption on capital gains that are re-invested into certified Wisconsin businesses, and provide an innovation tax credit.
The innovation tax credit would provide up to $10 million in tax credits annually to encourage research and development, product testing, and quality control efforts in Wisconsin companies. The maximum credit would be $250,000.
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