There will be a temptation on the part of Republican candidates for governor in 2026 to play up their standard GOP line that Wisconsin is a tax hell. That may have been true 25 years ago when the state was in the Big Ten for tax rankings.
But that perception no longer holds water.
Back then, when I was involved in the Wisconsin Taxpayers Alliance, now deceased, our mantra was: “Get Out of the Big Ten!” (The Big Ten conference now includes teams from 18 universities.)
Wisconsin ranked fourth highest in 1999-2000 in the combination of state and local taxes as a percentage of personal income at 13%.
Earlier, we had been above 14%, partly because of our generous history of spending on education and roads.
That particular metric is not readily available, but the highly reliable Tax Foundation has put Wisconsin at 28th for total state and local taxes in 2025. That’s a huge drop in our historical position.
Per the Foundation, collections at the state and local levels are now $5,953 per capita. That compares to an average across 50 states of $7,109. We are happily well below average.
We all know retirees who have moved to Florida and Arizona partly for tax reasons. But their savings in those two states are not so great any more. Florida comes in at $4,914, and Arizona is at $5,232. These days, the “Snowbirds” must be leaving more for the weather than to find a tax haven.
It should come as no surprise that New York has the highest combination of state and local taxes at $12,685 per capita, followed by California at $10,319 and Connecticut at $9,718.
Also not surprising is that the three lowest states are down south: Alabama at 50th at $4,722; Tennessee 49 at $4,731; and Mississippi 48 at $4,767.
The 2025 Tax Foundation report comes at a poignant time for the Wisconsin gubernatorial race that is just getting underway. The state has a surplus estimated at $4.3 billion, some of which could be used for further tax reductions.
Not so unimportantly, our state ranks better on taxes than all our neighboring states, except for Michigan.
Republicans have already made it clear that any compromise they make with Democratic Gov. Tony Evers will have to include a significant tax cut for the 2025-2027 biennium.
Nonetheless, the game has changed in terms of competition with other states. We are now in the middle of the pack on taxes. That means that citizens and their politicians can consider other dimensions of life in Wisconsin. There is room for investment in these sectors:
- Education at all levels, a long-standing strategy for the state.
- Infrastructure, such as roads, bridges, ports and airports, and broadband – all essential to a modern, productive economy.
- The environment, which faces never-ending challenges as we humans tap into our natural resources. The Great Lakes, for example, are a tremendous resource for Wisconsin, as are our rivers and inland lakes. They all face threats that require investment to cure.
- Entrepreneurship, the major source of new jobs and reinvention of an ever-changing economy.
Note, however, Wisconsin is still below average in economic growth. It’s 30th in private sector job growth and 29th in wage growth. That suggests more work needs to be done reducing regulatory burdens, controlling health care costs, and better connecting higher education with business needs.
It is a good thing that our political candidates can address qualitative issues beyond tax competitiveness. A further drop in our tax rankings would be welcome and stimulative for economic growth, but the other dimensions of our society and economy also underpin our prosperity.
One final note: we need to bring back the statewide metrics that Wisconsin Taxpayers Alliance once researched and authored. A time-honored business principle is that you achieve what you measure.
Those metrics could be developed by the Wisconsin Economic Development Corporation (WEDC) and should include measurements of public health as well as economic health. Or by CROWE, the center for research on the Wisconsin economy. More on that later.
(Torinus is a former chairman of Wisconsin Taxpayers Alliance)
