Shoppers in Wisconsin would be free from paying the state's 5 percent sales tax for one weekend in August and parents would see more money in their pockets before the new school year under a proposal backed by Republican lawmakers and Gov. Scott Walker.
Republicans in the state Assembly modified an idea Walker proposed in his State of the State address last month, which would have introduced a recurring $100-per-child tax credit for parents in the state.
Walker and Assembly Republicans are instead proposing a one-time tax credit of $100 per child and a one-time sales tax holiday for purchases of $100 or less. Senate Majority Leader Scott Fitzgerald, R-Juneau, said it's unclear whether Senate Republicans will support it, and Democrats panned it as an election-year gimmick.
Assembly Speaker Robin Vos, R-Rochester, said the modified proposal is the result of working "to see if there are ways to get the biggest bang for the buck for Wisconsin families and Wisconsin citizens in general."
Families with children living at home who were under age 18 at the end of 2017 could apply online to receive the credit, which would arrive in mid-to-late July. There are no income qualifications for the credit, which is estimated to cost the state $122 million.
Any shoppers, regardless of income or family status, would have the state's sales tax taken off at the cash register for purchases up to $100 during the first weekend of August. The cost of the sales tax holiday is estimated at $50 million, and it would not cover taxable services, prepared food, motor vehicles, motor vehicle parts, tangible or intangible property used to access telecommunications services, tangible or intangible property provided by a utility, or alcohol and tobacco products.
“As I promised, when we have a surplus, we will give it back to you. It’s your money,” Walker said in a statement.
Both tax breaks would show up just before the start of the school year — and not long before the August primary and November general elections.
Vos said the proposals aren't influenced by politics, arguing that he and other lawmakers supported Walker's effort to include a sales tax holiday in the most recent budget. The proposal was ultimately scrapped.
"This is giving us an opportunity to return excess taxes, about $180 million or so, back to the taxpayers," said Rep. John Macco, R-De Pere, who authored the bill with Rep. Kevin Petersen, R-Waupaca.
Vos said lawmakers could consider bringing back the one-time tax breaks in the future, but for now Republicans want to "maximize the ability for us to have long-term, comprehensive tax reform in the next budget."
Similar proposals have previously drawn criticism from Democrats, who argue they would rather see tax breaks targeted at low-income families, and from some Republicans who say they are gimmicks designed to drum up support before elections.
Assembly Minority Leader Gordon Hintz, D-Oshkosh, called the proposal an "election year bribe." Senate Minority Leader Jennifer Shilling, D-La Crosse, said it "reeks of desperation."
"Frankly, I am OK with any opportunity that we have to reduce the taxes that people pay in Wisconsin because we are overtaxed, period," Vos said. "I think this is a creative way to stimulate the economy."
The Assembly plans to approve the plan by the end of the month.
Sen. Alberta Darling, R-River Hills, a co-chair of the Legislature's Joint Finance Committee, said Senate Republicans have not yet agreed to the proposal. They plan to discuss it when they meet as a caucus next week, she said.
"We like to involve our caucus in discussions," Darling told reporters.
Fitzgerald said he "didn't feel comfortable walking out of the governor's office (after a Wednesday meeting with Walker and Vos) and saying 'count the Senate in.'" He noted that some Republican senators have opposed the sales tax holiday in the past, and said he doesn't know if their attitudes have changed.
"It's a good argument to be having: How do you give out revenue to taxpayers?" Fitzgerald said.