MILWAUKEE — With the Milwaukee Common Council electing to pass a new 2% sales tax for the city — which is expected to garner nearly $200 million per year — John Mercure and Greg Matzek of Wisconsin’s Afternoon News couldn’t help but wonder how much this would impact the day-to-day purchases of your average Milwaukee-area resident.
While essential items like groceries and medicine are not expected to be subject to this tax, most other personal purchases will cost 2% more. That prompted John and Greg to run through some of their purchases, including some hypotheticals, to see how much it will cost.
John, who recently returned from a cruise, spent $200 on essential items for his trip. His estimates showed that he would’ve spent approx. $16 dollars in taxes after the city and county sales taxes were implemented versus the $11 he spent on taxes previously.
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While he said that wouldn’t have made too much of a difference to him, John compared the tax cost of a brand new $1000 TV in Menomonee Falls vs. Milwaukee. His estimations suggest he would’ve spent roughly $50 in taxes outside of the city as opposed to $80 in taxes in Milwaukee. He and Greg both agreed that the difference in cost would be enough to sway their decision of where to make that purchase.
Greg considered back-to-school shopping for his children, and the roughly $200 he would spend on school supplies. He found that it was only a difference of about $4 if he made the purchase outside of Milwaukee vs. in it, which wasn’t too significant for him.
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However, the duo turned to Wisconsin’s Afternoon News Producer Tony Cartagena, who noted that $4 is the difference between a key component in a meal like meats or vegetables for a family that cannot afford it. For a more expensive purchase, the impact will be felt widely and could cause people to take their business outside of Milwaukee.
Greg found that if he purchased a used 2020 Ford Explorer XLT for $29,750 (60-month loan, 5% interest), the tax would add up to approximately $2,200 if purchased in the city vs. $1,600 outside of it.
Research from before these new tax rates showed that Wisconsin ranked second-to-last of all states in average combined tax rate at 5.43%. This shift will surely bump Wisconsin up higher on that list over time.
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