Gov. Walker vs. Mary Burke on Wisconsin's income tax

MADISON (WITI) -- One of the central issues in the 2014 campaign for Wisconsin governor will be tax policy. Republican Gov. Scott Walker and his Democratic challenger Mary Burke are taking very different positions.

Burke was recently in Kenosha, criticizing Gov. Walker for considering a plan that she says would hurt Wisconsin's border businesses.

Gov. Walker is considering dropping the state income tax.

Burke says that would lead to an increase in the state sales tax, and send consumers across the border.

"If we see this enormous hike in our state sales tax that it will impact business. A business I talked to in Wausau just last week said it would put them out of business, but obviously an increase from 5% to 13% or more in our sales tax would cause consumers to cross over the border and buy their goods there," Burke said.

The state income tax is the single biggest source of revenue for the state -- but now, Gov. Walker says off-setting the loss of income taxes may not be necessary.

Last week, the administration revealed tax collections have far exceeded expectations -- with an extra $900 million taken in.

Gov. Walker says that money should go back to taxpayers, and says Burke is wrong about a sales tax increase.

"100 percent wrong. There's no increase in the sales tax.  Couldn't be more wrong about that.  The reason we're able to provide income and property tax relief, particularly for hard working taxpayers in this state is precisely because our reforms are paying off.  They're creating more revenue. We're going to plow that revenue back in.  There's no increase in the sales tax whatsoever," Gov. Walker said.

Gov. Walker will detail his proposal for a significant tax cut in his State of the State address on Wednesday, January 22nd at the Capitol in Madison.

"I think we have to focus on what's going to create jobs here.  That's how you're going to get taxes down, if you grow the economy. You have to get the base larger in Wisconsin -- and we haven't seen that.  We're trailing every other state in the Midwest in terms of job creation since January of 2011," Burke said.

"I'm not even a candidate yet for governor. I'll announce that later in the spring and then we'll have that debate, but for now it's exciting as governor to be focused on the new numbers because of our good work on the economy and our ability to cut taxes yet again," Gov. Walker said.