Even with a $5 billion budget surplus, Republicans could force borrowers to pay hundreds in state taxes—leaving Wisconsin as one of only 13 states to count forgiven student loans as taxable income.
Republicans who control the Wisconsin Legislature have the power to waive state income taxes on the education debt relief coming to hundreds of thousands of Wisconsinites—but one GOP lawmaker says this would be the first time he’d oppose a tax break.
That would leave Wisconsin as one of only 13 states to treat forgiven student loan debt as taxable income—and force some borrowers to pay hundreds of dollars in state taxes even as Republicans sit on a record budget surplus of $5 billion.
Rep. Adam Neylon (R-Pewaukee) told TMJ4 in Milwaukee about his unhappiness about President Joe Biden’s announcement this week that could lead to more than 200,000 borrowers in Wisconsin having their debts completely forgiven—money likely to be put into local economies rather than government or bank coffers.
“I’m a Republican,” Neylon said, “but this might be the first tax break that I would oppose.”
If the Legislature doesn’t change the law, according to a tax accountant interviewed in the report, borrowers who have $10,000 forgiven would likely have to fork over $530 in state income taxes.
“When you’re talking about relieving debt for people that willingly took and participated in, I think this is almost a double benefit in some ways,” Neylon said.
There are no indications Neylon expressed similar feelings about the many PPP loans that were forgiven—such as the one for Assembly Speaker Robin Vos of nearly $300,000.
Gov. Tony Evers this week unveiled a plan to invest the surplus in a mix of tax cuts, tax credits, lower gasoline prices, and price caps on insulin. Republicans—who put the Legislature on a 10-month paid break for the rest of 2022—are not likely to come back into session.
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