New report finds ending state tax on tips and overtime would cost Wisconsin $2.76B

New report finds ending state tax on tips and overtime would cost Wisconsin $2.76B

(WLUK) -- Eliminating state tax on tips and overtime cost Wisconsin $2.76 billion over a decade according to new analysis by Forward Analytics -- a non-partisan Wisconsin research organization.

The study finds no tax on tips and overtime would essentially be a double-edged sword.

"This is a cost to state revenue, but at the same time is putting money back into the pockets of Wisconsinites to either spend or save as they see fit," Forward Analytics Research Analyst Jacob Anderson said.

The amount was calculated by estimating how much income tax workers who earn tips and overtime would save over 10 years.

No tax on tips has been a discussion in the Wisconsin Legislature for awhile.

A retired UW-Madison economics professor said eliminating tax on tips and over time is unfair and is not sensible tax policy.

"Because it leaves other individuals with the same levels of income, but who don't happen to have over time or don't happen to have income from tips but just from normal salary, they don't get a tax break," UW-Madison Emeritus Prof. of Applied Economics Andrew Reschovsky said.

Reschovsky said if the o...