MADISON—In 2001, Milwaukee families had among the highest property taxes in the nation. For most families, income taxes there were in the top half of 50 major cities studied, though sales and automobile taxes were relatively low. When these four major taxes were combined, a Milwaukee family earning $50,000 annually had the 9th highest taxes nationwide, according to a new report from the Wisconsin Taxpayers Alliance (WISTAX).

WISTAX researchers found property tax rates in Milwaukee, at $26.50 per $1,000 of property value, were sixth highest nationally. Bridgeport, Conn., had the highest rate ($45.50), followed by Des Moines ($40.00), Providence ($35.90) and Manchester, N.H. ($30.70).

However, the value of Milwaukee residents’ homes compared to income was relatively modest, and thus the property tax burden (5.6% of income) ranked 11th. In Milwaukee, the median housing value was 2.12 times median income, or 32nd highest. Bridgeport (13.5%), Newark (12.1%) and Providence (11.4%) had the highest property tax burdens.

The WISTAX report "Major U.S. City Tax Comparisons" details the tax burdens faced by families at various income levels in the largest city in each state. It is based on information from the Washington D.C. Office of Research and Analysis. WISTAX is a nonprofit, nonpartisan research and citizen-education organization serving Wisconsin’s citizens for more than 70 years.

The new study found Wisconsin’s income tax to be one of the most progressive in the nation. A hypothetical family of four living in Milwaukee with an income of $25,000 paid no income tax in 2001. Wisconsin was one of eight "income-tax states" with no tax on families at this income. At $50,000, Milwaukee families paid income taxes that were 3.3% of income. The percentage increased as incomes rose: $75,000 (4.2%); $100,000 (4.6%); and $150,000 (5.0%).

WISTAX researchers found Milwaukee’s income tax rankings were affected significantly by the income tax reductions passed in the 1999-2001 state budget. Effective with tax year 2000, tax rates were reduced and standard deductions were increased. Further reductions were effective in 2001. The effects of the tax cuts were to lower Milwaukee’s income tax rankings for: a $50,000 family from 7th in 1999 to 24th in 2001; a $75,000 family from 9th to 21st; a $100,000 family from 11th to 19th; and a $150,000 family from 13th to 18th.

The sales tax rate in Milwaukee (5.6%) was the 35th highest among the 50 cities studied. The sales tax in New Orleans (9.0%) was highest, followed by Seattle and Chicago (both 8.8%) and Oklahoma City (8.4%). WISTAX researchers noted that spending decisions and exemptions can have a big impact on the sales tax burden. Accounting for those factors, WISTAX said a $50,000 Milwaukee family had a sales tax burden of 1.5%, or 26th highest.

The report also analyzes automobile-related taxes and fees. Wisconsin was one of 27 states with a flat-rate registration fee in 2001 and had the second-highest state gas tax (27.3¢) in the nation. Because some cities had a local gas tax, Milwaukee fell to fourth in gas taxes behind Las Vegas (33.0¢), Honolulu (32.5¢) and Providence (28.0¢). Fourteen of the cities studied subjected the automobile to personal property taxes, and 10 imposed excise or other local taxes on automobile owners. At a family income of $25,000, Milwaukee was 18th in total auto-related taxes and fees ($210). Due to Wisconsin’s flat registration fee, Milwaukee’s rank fell as incomes rose. At $50,000 and $75,000, the Badger State’s largest city ranked 22nd nationally. At $150,000, Milwaukee was 29th.

In addition to ranking each of these major taxes individually, the study also examined the "total tax burden" of these four taxes combined. At the $25,000 income level, Milwaukee was 18th in "total taxes" at 7.6% of income. For middle-income families—those with incomes of $50,000 or $75,000—Milwaukee had the 9th (10.4% of income) and 11th (11.4%) highest taxes, respectively. At family incomes of $100,000 and $150,000, Milwaukee remained outside the top 10 at 11.5% of income (ranked 11th and 12th, respectively).

WISTAX researchers also examined several other taxes. Wisconsin’s cigarette tax, at 77¢ per pack, was 9th highest in the nation. The lowest cigarette tax states were typically in the South, where most tobacco is grown. The lowest taxes were in Virginia (2.5¢), Kentucky (3¢), North Carolina (5¢), South Carolina (7¢) and Georgia (12¢). Wyoming, in the West, also imposed a tax of 12¢ per pack.

The Badger State’s beer tax (6¢ per gallon in 2001) was tied with Missouri for the second lowest in the nation. Wyoming was lowest at 2¢ per gallon. Three of the states with the lowest beer tax were homes to major brewers: Anheuser-Busch in Missouri; Coors in Colorado (8¢ per gallon); and Miller in Wisconsin.

In 2001, Wisconsin’s tax on light wine (alcohol content of 12%) was 25¢ per gallon, or 5th lowest among non-monopoly states. For hard liquor, 18 states had local control boards. Of the remaining 32 states, Wisconsin’s tax was 15th lowest at $3.25 per gallon.