Most older adults want to stay in their homes as they age. But owning a home is getting more expensive as property taxes surge.
Wisconsin homeowners last December saw the largest school property tax increase in more than three decades, according to the Wisconsin Policy Forum.
Property tax increases disproportionately affect older adults who rely on fixed incomes through pensions, savings and Social Security.
At a Northwoods Senior Breakfast this spring in Merrill, one group of attendees asked: How can older adults get help paying property taxes? Wisconsin Watch passed that question along to three experts:
Nicole Heckman, vice president of financial wellbeing at AARP Foundation.
Bekki Schmitt, director of Milwaukee’s Aging and Disabilities Resource Center.
Jenny Fasula, executive director of the Foundation for Rural Housing.
Here’s what we learned:
Where to start
The AARP Foundation offers an online tool to check eligibility for available assistance programs. Eligibility for assistance is often broader than people assume, Heckman said.
Aging and disability resource centers, or ADRCs, can provide information about local assistance programs and other savings opportunities. The Wisconsin Department of Health Services lists ADRCs by county online.
The Wisconsin Department of Revenue’s website lists the latest information on property tax assistance programs and eligibility requirements. Municipalities may also offer local aid.
“There are no great options for people who get behind on property taxes,” Fasula said. She wants to see the state expand assistance. Here are four existing Wisconsin programs to help offset or delay high property tax bills.
Homestead credit: This tax credit helps low-income homeowners and renters. People can get help claiming the credit through Volunteer Income Tax Assistance sites or AARP Foundation tax assistance programs. Inflation has reduced the value of the credit in recent years, as Wisconsin Watch has reported.
School property tax credit: Homeowners and renters can claim this nonrefundable tax credit along with the Homestead credit through their income tax return.
Property tax deferral loan program: Homeowners 65 and older can delay paying property taxes through the Wisconsin Housing and Economic Development Authority. Borrowers repay the loan, plus interest, once the home is sold or transfers ownership.
Lottery and gaming credit: Eligible homeowners can apply online or through their county treasurer to receive a credit toward their property tax bills.
Q&Aging
Did we miss a helpful resource? Do you have a question about aging?
A vote in the state Senate last month tanked a deal to use Wisconsin’s budget surplus for tax refunds, special education funding and more. Now, the top Republican in the State Assembly wants to bring some kind of deal back to the table.
Public school advocates were euphoric about the deal Gov. Tony Evers and Republican legislative leaders announced to boost special education funding and cut property taxes — until they read the details, and then the whole thing collapsed. (Getty Images)
“It really blew up our world,” public schools advocate Heather DuBois Bourenane says of the failed school funding and tax-cut deal that Republican legislative leaders and Gov. Tony Evers trumpeted as a “blockbuster” before it fizzled in the state Senate, ending in finger-pointing and recriminations.
“It was the first time the carrot had been dangled so close to public schools,” DuBois Bourenane says, describing the “moment of utter euphoria” when her group, the Wisconsin Public Education Network, made up of parents, teachers and school officials from every corner of Wisconsin, first heard about the deal. “It seemed like what we’d been fighting so hard for for so long was finally about to happen.”
But then DuBois Bourenane and the other members of her organization got the details.
The funding for special education was not locked in at 50% in the second year of the plan as they’d hoped. Instead of a “sum-sufficient” or guaranteed allocation to cover a set percentage of costs, the 50% was an estimate. If costs go up, that percentage would go down. As for the $300 million increase in general aid to schools, as a Legislative Fiscal Bureau analysis explains: “the additional aid would provide property tax relief but not additional resources for school districts.”
Tax cuts made up the lion’s share of the deal — about 80% of the total $1.8 billion. Those included property tax cuts, interest earnings reductions, no tax on tips and overtime and, biggest of all, an $870 million income tax rebate that would have put $300 checks in the mail to people who earned enough money to qualify. The Legislative Fiscal Bureau projected that the deal would leave the state with a nearly $3 billion deficit.
Most of that deficit would be caused not by school spending, but by what Dubois Bourenane describes as a wasteful tax giveaway. “What the heck?” she says. “You’re wasting the surplus while pretending to fix the thing [school funding] you broke the worst!”
School funding in Wisconsin was broken by former Republican Gov. Scott Walker’s historic budget cuts. The damage has compounded each year for more than a decade and a half as school budgets haven’t kept pace with inflation. In such dire circumstances there were, DuBois Bourenane acknowledges, public school advocates who felt anything was better than nothing. But the two-year stopgap deal Evers and Republican leaders reached did not come close to fixing the long-term problem.
On the bright side, says Dubois Bourenane, at least politicians in both parties have stopped pretending the last several budgets actually funded schools sufficiently. The need to address the funding crisis in Wisconsin public schools has become a bipartisan talking point. Even Republican gubernatorial candidate Tom Tiffany (who, as a legislator, voted for former Walker’s massive cut to schools) lists it as a top priority.
A recent Marquette poll showed that 80% of Wisconsinites who were contacted about the rushed deal right after it failed, with little time for discussion or analysis, and asked if they would like to receive $300 in the mail from the state, said yes. But voters deserve a full, public discussion of their options, and whether tax rebates worth $278 to most individual Wisconsin tax filers and $574 to most married joint filers, according to the Legislative Fiscal Bureau, are worth putting the state in a $3 billion hole with no long-term fix for the school funding crisis.
DuBois-Bourenane wishes the Legislature would take up a bill introduced in March that would guarantee a 60% special ed reimbursement from the state, easing the burden on local property taxpayers, who have been filling the hole by passing local referendum requests at record rates, raising their own taxes as the state reneges on its obligation to fund schools.
But couldn’t committing the state to once again cover the real costs of public education put us in a deficit? Maybe, says DuBois Bournenane. “We’d have to cut money in other ways. But we would stop balancing the budget on the backs of children” — instead of acting as though the state can always avoid paying its biggest bill.
“There’s not really a surplus here,” she adds. “There’s just a pool of money that used to be used to fund public schools that now is not used at all.”
That’s the pool of money Walker “saved” by cutting funding for schools, and Evers and Republican leaders wanted to dole out over the next two years — 80% of it in the form of tax cuts and 20% to schools.
She finds Evers’ public expressions of frustration with Democrats for not supporting his deal mystifying. “It seems to me it’s a predictable problem he could have solved in advance by consulting with his colleagues on the deal before moving forward.”
But most of all, for public schools, kids and communities across Wisconsin, the whole thing was “incredibly cruel,” she says.
“If we were being led by adults they’d laugh it off and get back to the table and get a new deal,” she says. Instead, the long-term problems threatening public education in Wisconsin continue, with no real fix in sight.
“I know it doesn’t look like it from a distance, but it’s not about the money,” DuBois Bourenane says. “It’s about are the kids OK? Can we meet their needs?”
The answer, coming from districts that are facing steep cuts, growing class sizes, fewer extra curricular activities and school consolidations and closures, is no. The kids are not OK.
Compounding the damage is a looming crisis that was not part of the budget deal discussion at all. In 2026 all caps come off Wisconsin’s school voucher program. An unlimited number of families will be able to send their kids to private schools at taxpayer expense, and the funding for that program, under a law signed by Walker and supported by Tiffany, comes off the top of state funds. As school voucher programs have steadily grown in Wisconsin, most new students enrolled come from families that already had their kids in private school. The potential explosion in new families joining that group will put the current school funding crisis in a long shadow.
Still, DuBois Bourenane is optimistic Wisconsin can fix the problem. Her group is part of a lawsuit charging the state with failing its obligation to provide a “free, adequate public education” to all Wisconsin children.
She believes the problem could be solved right now, and that “it’s irresponsible to walk away from the table” after the budget deal disaster. And that the pride and anger of the politicians who don’t want to keep trying is hurting Wisconsin kids.
But she also sees a huge opportunity for voters to put pressure on the politicians running for office this fall to change the attitude in the statehouse and “elect people with more energy to do things for our communities.”
“I don’t think all is lost. We will fix it in the long run. But we could fix it now,” she says. “And we’re choosing not to.”
A new poll shows four out of five Wisconsinites think it was wrong to oppose the tax cut and education funding deal that failed in the Legislature earlier this month.
A deal between Democratic Gov. Tony Evers and Republican legislative leaders to give Wisconsin income tax filers a rebate would have excluded about 30% of filers.
That’s because the deal provided rebates up to $300 for individuals and $600 for married joint filers only to residents who paid state income taxes for 2024.
The deal, which failed to pass in the state Senate, also reduced property taxes, increased funding for schools and ended taxes on tips and some overtime pay.
According to the Legislative Fiscal Bureau, about 2.1 million residents would have received the rebates. Based on that and the U.S. Census estimates, 55% of adults would not be eligible for tax rebates based on not having owed taxes or because they did not file a return. Of those who filed, about 26% were not eligible for a rebate, LFB estimated.
This fact brief is responsive to conversations such as this one.
Gov. Tony Evers spoke to reporters during a visit to Barneveld middle and high schools Monday, where he spoke to students and staff about their mental health initiatives and announced a deal with Republican legislative leaders on school funding and tax cuts. (Photo by Baylor Spears/Wisconsin Examiner)
Gov. Tony Evers, Assembly Speaker Robin Vos (R-Rochester) and Senate Majority Leader Devin LeMahieu (R-Oostburg) — Wisconsin’s three leaders all of whom are set to retire this year — announced a $1.8 billion deal Monday to provide additional funding to Wisconsin schools for general aid and special education and tax relief in the form of rebate checks, property tax cuts and the elimination of taxes on tips and overtime.
The deal is the culmination of months of negotiations on how to use the state’s projected surplus to provide additional funding to schools and tax relief to Wisconsinites.
Negotiations kicked off at the beginning of this year after the general fund surplus was projected to be $2.37 billion at the end of the biennium, June 30, 2027 — about $1.5 billion higher than expected. However, they fell apart as Evers and Senate and Assembly leaders argued over the form that a proposal should take and a deal was not reached before the end of the regular legislative session.
According to a Department of Administration and Department of Revenue memo released Monday, the state’s general fund tax collections are tracking between $300 million and $350 million above the January estimates.
Evers said the school funding was the biggest win in the bipartisan agreement. The deal includes $300 million for special education funding and $300 million for school general aids.
“I think money for schools, that’s obviously the most important thing for me, but again, we’re in a position to actually compromise and have Republicans and Democrats, at least in the leadership level, getting something done,” Evers said.
Evers spoke to reporters during a visit to Barneveld middle and high schools where he spoke to students and staff about their mental health initiatives on Monday morning. He was there to highlight investments that have been made in schools. He noted that Barneveld is a good school district and said the deal reached by him and lawmakers would “make them an even better” one.
About $85 million will be used to guarantee schools get 42% of their special education costs reimbursed for the 2025-26 school year and the remaining funds will be used to guarantee a 50% reimbursement rate in 2026-27.
The 2025-27 state budget promised a 42% special ed reimbursement rate in the first year of the budget and a 45% rate in the second year, but the funds set aside were not adequate to meet those rates.
The state’s special education reimbursement is currently a “sum certain” appropriation, meaning that there is a fixed pot of money available for the costs. If schools’ costs exceed the amount set aside, then the rate of reimbursement is lower. A change to a sum sufficient appropriation would ensure that the amount available is enough to cover the promised rates.
Evers said negotiations couldn’t get to a sum sufficient appropriation for special education funding, but that negotiators used figures that should get the state to the promised rates.
“Next budget people have to ensure that it is sum sufficient, but we did not get across that bridge, unfortunately,” Evers said. “Look, we know what the numbers are, so it’s going to be 50[%].”
The deal will also increase funding for pupils participating in the choice, charter, special needs scholarship and open enrollment programs by $16 million.
The investment into general school aids comes after lawmakers declined to provide any new funding in the 2025-27 state budget and property taxpayers across the state saw increases in December. The $300 million is intended to help buy down school property tax levies, although the amount will not completely cover the $325 per pupil in additional school revenue limit authority that school districts have as a result of a previous Evers budget veto.
The agreement also includes $50 million meant to serve as property tax relief aid for the Wisconsin Technical College System beginning in 2026-27.
The Wisconsin Association of School Boards said in a statement that it was encouraged by the deal’s investments in special education and general aids, but cautioned that it would not completely fix schools’ financial issues.
“While these resources are important for public schools struggling with a declining level of state investment, it will not solve the longer-term problem,” WASB said. “The state has shifted away from providing inflationary increases in spendable resources for schools for 17 years. One state surplus deal cannot reverse that trend by itself.”
Evers spoke with students at Barneveld middle and high schools about mental health initiatives, including the cell phone ban he signed in 2025. (Photo by Baylor Spears/Wisconsin Examiner)
The Joint Finance Committee is scheduled to take up the proposal on Tuesday, and it’s expected that the full Assembly and Senate will take up the proposal on Wednesday in a special session. Ever signed an executive order for the session Monday afternoon.
Vos said in a statement that legislators would be sending the surplus “back to help families with the pressure of increasing costs, reward hard work, and to continue investing in schools to help stabilize rising property taxes.”
LeMahieu said Repiblicans’ top priority was to send the surplus back to “hardworking taxpayers across the state.”
“This deal will provide immediate relief with $600 in surplus refund payments and provide permanent property and income tax relief for Wisconsin families,” LeMahieu said.
The deal will also provide $300 tax refunds for individuals and $600 refunds for married joint filers. Tax relief in this form was originally a Senate Republican proposal, though they had proposed rebates of $1,000 for married joint filers and $500 for individuals.
The deal also includes the elimination of taxes on tips and overtime — two proposals that Evers initially vetoed. The proposal will align state with federal law, though the state proposals differ as they are permanent changes rather than having a sunset date in 2028.
Evers expressed confidence that there are enough votes to get the deal through both houses and to his desk.
“I need a majority of each house, and whether that’s all Democrats, all Republicans or a mix, I don’t care,” Evers said. “I think it would be hard for anyone to say I’m not in favor of this…[when] as a result, my local school district gets screwed. I think that’s going to be a hard position for people to take.”
It’s already clear that not every member is on board as Democratic and Republican Senate lawmakers express concerns and opposition to the deal in statements.
Senate Minority Leader Dianne Hesselbein (D-Middleton) said in a statement that from her perspective there is no deal. She said her caucus needs to see the full details of the “expensive proposal” before they say more.
“Three men who will not be in elected office next year have come up with this proposal which Senate Dems will be reviewing,” Hesselbein said. “Any proposal must pass both houses of the legislature and no one knows if Republicans have the votes to pass it.”
Assembly Minority Leader Greta Neubauer (D-Racine) has not responded to a request for comment.
Sen. Steve Nass (R-Whitewater), who is also retiring this year, said in a statement that he “can’t support another bad deal cut by leaders that will never face the voters again.”
With an open race for governor and control of the state Legislature up in the air, some expressed concerns about leaders deciding to spend down the surplus when they won’t be around to deal with the consequences next year.
Democratic candidates for governor, Sen. Kelda Roys (D-Madison) and former Department of Administration Secretary Joel Brennan criticized the way lawmakers negotiated the deal and the contents of the deal.
“Budgets are difficult to negotiate and demand tough decisions, and that’s why I believe they must be done in public with input from Wisconsinites. It’s very disappointing that this one wasn’t, and we should expect all candidates for governor to commit to an open process,” Brennan said. “I’m all for putting money back in people’s pockets, giving our schools a much-needed boost, and providing some property tax relief, but this deal misses the mark in many other ways. It does nothing to address the cost-of-living crisis that is still crushing Wisconsin families on things like child care, health care, and gas and utility prices.”
Roys said the leaders had come to a “backroom” deal.
“This latest deal is the height of fiscal irresponsibility,” Roys said. “It spends a projected ‘surplus’ before it’s in the bank, even though that projection was estimated before Trump’s attack on Iran that disrupted our economy and caused gas prices to skyrocket. It gives a little one time money to public schools while permanently cementing unfairness in our tax structure. Worst of all, it blows nearly a billion dollars on an election year gimmick to send out rebates, squandering the ability of a new Democratic majority to make the long-overdue investments in our kids that they deserve.”
The critique on the transparency in the negotiation process comes after Lt. Gov. Sara Rodriguez, who is also campaigning for the nomination, was recorded saying she would craft the state’s next budget “behind a curtain.”
Evers told reporters that the negotiations with lawmakers was typical process.
“Well, sometimes you do things behind the curtain,” Evers said. “Leadership both from my staff and others on the other side met on a regular basis, and we kept others informed about that. Now, if… [Roys is] angry because we didn’t involve every legislator prior to, that doesn’t happen with a regular budget, too. So if she’s going to be governor, she needs to get used to it.”
He continued: “If she’s not going to support it, my question would be, ‘How do you run for governor of the state of Wisconsin and say to your schools, well, you know, this money of 42% and 50% for special education, I’m against that?’ That’s a tough one to run against.”
Labor unions and other supporters of an income tax on millionaire earners rallied at the Washington state Capitol in Olympia in February. A growing number of liberal states are considering raising taxes on their wealthiest residents. (Photo by Bill Lucia/Washington State Standard)
While the idea of a special tax on millionaires is hotly debated across the country, Maine state Rep. Cheryl Golek characterized her state’s new tax as a modest and reasonable step toward fairness.
That’s because, she said, working- and middle-class households in Maine — including teachers, firefighters and nurses — are paying effective state income tax rates similar to or higher than those of the highest earners.
“Those who benefit the most from our economy do so because of the people, infrastructure and communities that support that success,” said Golek, a Democrat. “Asking for a small additional contribution from the wealthiest in our state is a reasonable and widely supported step toward a fairer system.”
The legislation signed by Democratic Gov. Janet Mills this month will add a 2% tax to households whose income exceeds $1 million per year.
Maine and Washington, which enacted its own law last month, are among the latest Democratic-led states to ask for more tax dollars from the rich as national wealth inequality widens and states face heightened budget pressures. They follow the lead of other states including New Jersey and Massachusetts that have implemented specific taxes for the rich.
The idea is gaining traction as lawmakers in at least a dozen states, including Illinois, Minnesota, Rhode Island and Virginia, have proposed new taxes for the wealthiest taxpayers. In California, advocates this week announced they gathered enough signatures for a ballot initiative that would impose a one-time tax on billionaires. But these proposals often stir yearslong battles.
The taxes can take different forms — taxing annual incomes above a certain threshold or taxing capital assets, including high-value stocks and real estate. Earlier this month, New York Mayor Zohran Mamdani and Gov. Kathy Hochul, both Democrats, proposed a new pied-à-terre tax for homes valued above $5 million when owners have a separate primary residence outside of New York City.
In neighboring New Jersey, those earning over $1 million per year face an income tax top rate of 10.75% in addition to a so-called mansion tax on the sales of high-value homes.
Proponents say these moves can help balance state tax structures that are tilted against lower earners. The left-leaning Institute on Taxation and Economic Policy says the tax systems of 40 states favor the wealthiest earners. But opponents argue that these measures levy new taxes on business owners, dissuading local investment and encouraging rich residents to move away — especially risky during a time when many other states are slashing taxes.
“When the outlook of our population growth is stagnant and we should be attracting people to Maine, it puts a disincentive to people to call Maine home,” Patrick Woodcock, president and CEO of the Maine State Chamber of Commerce, said during a news conference ahead of the state House vote on the tax.
The rising push to tax the wealthy in liberal states comes as some red states are moving to more regressive tax systems, which put a higher burden on lower earners.
“You increasingly have two poles where you have a larger number of states with fairly low income taxes and a smaller but still significant number of states that have doubled down on high rates, particularly high rates on high earners,” said Jared Walczak, senior fellow at the conservative-leaning Tax Foundation.
He said increasing income taxes pushes wealthy people and employers to low-tax states. Even if individuals don’t directly move because of taxes, they follow businesses to other states, he said.
And some progressives are wary of going too far: California Democratic Gov. Gavin Newsom is opposing the ballot initiative that would impose a one-time 5% tax on those whose net worth exceeds $1 billion. Hochul, who pushed for the new tax on second homes in New York City, has warned that more tax increases on the millionaires and billionaires could hollow out a crucial portion of the state’s tax base.
Walczak said only a handful of in-demand places can afford to impose higher taxes for the same reason that people pay higher rents.
“It’s worth it to a lot of people,” he said. “People are willing to pay very high rent, but there’s a limit. In the same way, they’re willing to pay higher taxes to live in New York, but there is a limit.”
Rising wealth inequality
The gap between the rich and poor has been widening for decades.
Wealth for the bottom fifth of American households has barely moved in recent decades, while the top 0.1% have seen their wealth increase by nearly $40 million each, according to an analysis by the anti-poverty nonprofit Oxfam America.
Between 1980 and 2022, the share of national income going to the top 1% doubled, while the share going to the bottom 50% fell by a third, Oxfam reported.
Recent federal policy changes have only exacerbated the need for progressive state tax changes, said Amber Wallin, executive director of the State Revenue Alliance, which is lobbying for higher taxes for the wealthy across multiple states.
President Donald Trump’s major tax and spending bill, often called the One Big Beautiful Bill Act, slashed funds for safety net programs including food stamps and Medicaid. At the same time, it provided tax cuts that largely benefit the wealthy.
“So we know millions will lose access to healthcare, millions will lose food assistance, and states all across the country will see funding cuts for key programs,” she said. “We know that people power a strong economy, not tax cuts for the wealthy, and when the rich pay their fair share of taxes, we all benefit.”
Since Massachusetts voters in 2022 approved a 4% surtax on annual incomes above $1 million, that Fair Share Amendment has provided the commonwealth with $6 billion in transportation and education funding.
But Jim Stergios, executive director at the libertarian-leaning Pioneer Institute, said it’s not just the ultra-wealthy who are paying that tax. People who record a one-time sale of a business or a home can face the tax even if they’re not earning over $1 million every year, he said.
He said the tax is pushing residents out of the state and dampening business investment. Federal data from the U.S. Census Bureau shows Massachusetts lost more than 33,000 residents to other states last year, though Democratic Gov. Maura Healy noted the overall population did increase because of foreign immigration. Stergios noted lawmakers are still facing challenges balancing the state budget even with the new revenue.
“So over the long term, it’s not going to have a salutary effect,” he said. “We’re going to continue to have budget problems. We do have budget problems even with this.”
Proponents and opponents of the state’s millionaire’s tax have touted recent IRS data in their arguments: Residents leaving Massachusetts took a total of $4.2 billion in adjusted gross income with them in 2023, the first year of the new tax, Bloomberg reported. Yet the number of residents moving out of Massachusetts who reported income of $200,000 or more fell after the tax was implemented.
“There’s no real evidence of millionaire out-migration. I’m sure there’s some isolated anecdotes, but the actual data don’t show it,” said Phineas Baxandall, director of research and policy analysis at the left-leaning Massachusetts Budget and Policy Center.
He said one piece of evidence that the wealthy remain in Massachusetts are the proceeds of the tax itself, which are funding major priorities including free community college and expanding childcare subsidies for thousands.
“Massachusetts is rightfully fearful of the federal cuts that are happening,” Baxandall said, “but we’ve been able to still move forward with real, transformational investments.”
Multiyear efforts
Though interest in raising taxes on the rich is growing across the country, the idea faces considerable skepticism and often requires years of organizing.
In March, Michigan advocates announced they would suspend their campaign to put on the statewide ballot a 5% tax on individual incomes over $500,000 and joint incomes over $1 million.
“We always knew that we were going to face strong headwinds from billionaires who don’t want to pay their fair share,” Rachelle Crow-Hercher, president of the Invest in MI Kids steering committee, said in a statement to Michigan Advance. That coalition plans to eye the 2028 election cycle instead, she said.
Last week, Illinois House Speaker Emanuel “Chris” Welch announced he would drop a push for a new millionaire’s tax as Democrats came up short of the necessary supermajority needed to put the issue on this fall’s ballot.
Welch believes the issue will come before lawmakers again, but after missing a key legislative deadline it won’t be eligible for a statewide vote until 2028. He said it remains popular among voters. Lawmakers proposed using proceeds of a new tax for schools and property tax relief.
“I believe that we should tax the rich and the rich should pay more,” he said. “To those who much is given, much is required.”
I believe that we should tax the rich and the rich should pay more. To those who much is given, much is required.
– Illinois House Speaker Emanuel “Chris” Welch
Meanwhile, the newly enacted Washington tax faces a lengthy, though expected, court challenge.
The legislation signed last month by Democratic Gov. Bob Ferguson imposes a 9.9% tax on household income above $1 million a year. Opponents argue that income is property and thus must be taxed uniformly because of state constitutional requirements.
In addition to the constitutional concerns, Republican state Rep. Jim Walsh said the new law opens the door for lawmakers to eventually expand income taxes to more households — not just the rich. Instead of raising revenue, he said Democratic lawmakers should focus on cutting spending, noting the state operations budget has more than doubled in the past decade.
“The problem is not the financing mechanism of the state’s operations,” he said. “It’s the rate at which far-left advocates in the legislature have been increasing state government spending in the state. It’s ridiculous.”
To Democratic state Sen. Noel Frame, the legislation brings the state’s regressive tax code more in line with Washington’s progressive politics. With no statewide income tax, sales and property taxes leave lower income earners to cover more of the cost of state services, making Washington’s one of the nation’s most regressive tax systems.
“For all the things that we do that are good, big, bold economic policy — to have the tax code that we have is just an embarrassment, and it’s completely out of line with our values as a state,” Frame said.
Like the push for a $15 minimum wage started in liberal cities and states, Frame expects the millionaire tax movement will spread into more conservative areas.
Already, some conservative states, including Idaho, Indiana and Florida, have made moves to reject some of last year’s federal tax changes that benefit corporations and the wealthy.
“The people are demanding better,” Frame said. “And the more that people understand the deep connection of tax policy to income and wealth inequality, the more engaged they become.”
This story was originally produced by Stateline, which is part of States Newsroom, a nonprofit news network which includes Wisconsin Examiner, and is supported by grants and a coalition of donors as a 501c(3) public charity.
Cans used for Lost Boy cider in Alexandria, Virginia, cost the small business more because of increased aluminum tariffs. Tristan Wright, founder and president of Lost Boy, stands near his production line on Feb. 6, 2026. (Photo by Ashley Murray/States Newsroom)
WASHINGTON — The U.S. Customs and Border Protection tariff refund system went live Monday, marking what small business advocates call a “complex” first step for entrepreneurs to recoup $166 billion in import taxes accrued under President Donald Trump’s emergency tariffs, which the U.S. Supreme Court struck down in February.
Importers and brokers can now upload a detailed list of each tariff paid under Trump’s now illegal order to charge duties under the International Economic Emergency Powers Act, or IEEPA.
Customs officials estimate 330,000 importers paid the duties. Refunds are expected within 60 to 90 days, according to CBP.
The Supreme Court’s 6-3 decision earlier this year found Trump’s steep global tariffs exceeded his presidential powers.
Following the high court’s decision, U.S. Court of International Trade Judge Richard Eaton ordered the government to stop charging the tariffs and establish a refund system.
A handful of small businesses and Democratic state attorneys general led the legal challenge to Trump’s 2025 “Liberation Day” tariffs.
Small business owners angry, frustrated
States Newsroom documented the experiences of several small businesses across the U.S. who faced increased costs following Trump’s change in international trade policy.
Now many are experiencing a “confusing mix of relief,” Richard Trent, executive director of Main Street Alliance, told States Newsroom in an interview Monday.
Trent, whose organization advocates on behalf of small businesses said “our entrepreneurs, many of whom were angry that they had to pay tariffs in the first place, and were frustrated by the back-and-forth over the last year, opened up the portal this morning only to see that it had crashed. It just feels like the uncertainty just keeps popping up.”
Trent, who spoke to “five or six” businesses Monday morning who experienced technical issues, said the portal was up and running again by afternoon.
Customs and Border Protection did not confirm for States Newsroom whether the system had crashed, but rather provided a written statement.
“U.S. Customs and Border Protection has developed a new tool, the Consolidated Administration and Processing of Entries (CAPE), to efficiently process refunds, pursuant to court order, for importers and brokers who paid IEEPA duties,” according to an agency spokesperson.
“CBP has issued guidance to the trade community to help them prepare to use the new CAPE tool. Importers and brokers can visit CBP’s website for resources and step-by-step guidance,” the statement continued.
Monday’s launch is the first part of a four-step process in refunding the taxes paid by American businesses of all sizes.
Trent said the “complex” process is yet another hurdle for small operations.
“This is progress, but it’s not yet justice,” Trent said in an earlier statement Monday. “Small business owners should not have to jump through hoops to get back money they never should have had to pay. We need a refund process that is simple, accessible, and fast.”
Guides for refunds
The Liberty Justice Center, the libertarian legal advocacy group that represented small business plaintiffs before the Supreme Court, has established the Tariff Equity Refund Resource for America. The platform offers online guides for how to properly submit documentation for the refunds.
“We took this fight all the way to the Supreme Court on behalf of small businesses, and we’re not stopping now,” Sara Albrecht, chair of the Liberty Justice Center, said in a statement Monday. “We are a nonprofit law firm — our only goal is to help businesses recover every dollar they are owed, not to take a percentage of it. At a time when others are looking to profit off confusion, we are making this process clear, accessible and free.”
Trump declared international trade a national emergency just over a year ago, citing a trade imbalance on imports and exports between the United States and several other countries. The president imposed a 10% blanket tariff on all global imports and steeper double-digit taxes on products from some of the top U.S. trading partners.
The president delayed and changed the rates on numerous occasions.
Following his Supreme Court loss, Trump imposed a new round of universal, temporary tariffs under a separate statute. The Liberty Justice Center is again representing small businesses in court to fight the new import taxes.
The December Farm Foundation Forum, Tax Year 2025: Potential Impacts and Opportunities for Farmers and the Agriculture Sector, covered the possible outcomes and impacts for farms and the greater agricultural sector from potential changes to taxation policy in 2025 and beyond. Some key aspects discussed included the impact of expiring tax provisions, and specific issues like estate tax and bonus depreciation.
The conversation was moderated by Todd Van Hoose, president and CEO of Farm Credit Council, and included input from Mark Albright, public affairs specialist in tax outreach partnership and education at the Internal Revenue Service; Kent Bacus, executive director of government affairs at National Cattlemen’s Beef Association; Tia McDonald, research agricultural economist with USDA Economic Research Service; Paul Neiffer, agribusiness and business advisor with Farm CPA Report; and Elizabeth Swanson, national tax senior manager with Pinion.
Below are some of the main points presented by the panel.
Expiring Tax Provisions: Expiring tax provisions, including key provisions from the Tax Cuts and Jobs Act (TCJA) and the American Rescue Plan Act (ARPA), will impact farm households. These include the child tax credit, earned income tax credit, estate tax exemptions, and bonus depreciation, set to expire by the end of 2025.
Impact on Tax Liabilities: Expiring provisions are expected to increase tax liabilities by nearly $9 billion, with $650 million coming from the estate tax exemptions. The most significant increase will come from the expiration of changes to federal income tax rates, the removal of the state and local tax cap, and the reinstatement of the personal exemption.
Qualified Business Income (QBI) Deduction: The QBI deduction, which allows farm businesses to deduct 20% of their income, will be affected by expiring provisions. Larger farms benefit more from this deduction, but moderate-sales farms face the highest percentage increase in taxes due to the expiration of this provision.
Estate Tax and Exemptions: A major concern for farm households is the estate tax exemption, which will be halved in 2026, potentially leading to higher estate tax liabilities for farm families.
Concerns Over Bonus Depreciation: The phase-out of bonus depreciation, which allows faster write-offs of equipment costs, poses a risk to farm businesses that rely on capital-intensive equipment. The expiration could lead to significant tax burdens unless replaced with alternative provisions.
CTA Compliance and Penalties: The Corporate Transparency Act (CTA) mandates reporting beneficial ownership information for entities like LLCs. Failure to comply with CTA filing requirements can result in significant penalties. However, on December 3, 2024, the U.S. District Court for the Eastern District of Texas entered a preliminary injunction suspending enforcement of the Corporate Transparency Act (CTA) and its implementation of regulations nationwide.
IRS Resources for Farmers: Various IRS resources are available to farmers, including the Farmers Tax Guide, tax tips for farmers, and an online Agricultural Tax Center. These tools help farmers navigate tax complexities, especially regarding crop insurance, disaster payments, and updated provisions like mileage rates and self-employment tax thresholds.
The two-hour discussion, including the audience question and answer session, was recorded and is archived on the Farm Foundation website.
Please note: This summary was created with the help of ChatGPT. Please refer to the recorded session for full details.
Login
