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ST. PAUL, Minn. (WCCO) — Minnesota Senate Republicans on Thursday are set to approve a $8.8 billion proposal that would slash the first-tier income tax rates and eliminate taxes on social security benefits.
The first-tier income tax rate would decrease from 5.35% to 2.8%, which Republicans say this impacts 2.4 million filers. Minnesotans making between $150,000 and $249,000 will see the largest tax benefit, according to nonpartisan Senate research staff analysis, but half the package goes to those making less than $100,000.
Among all filers, more than 80% of taxpayers will see some sort of tax reduction, according to the analysis. The remainder would see no change.
Republicans say the projected $9 billion budget surplus is a sign the state is taking too much from Minnesotans and they want taxpayers to see a reduction every paycheck, not in one-time tax rebates.
“Our state coffers are full yet Minnesotans are struggling. They’re struggling with historic inflation and they’re just struggling to make ends meet, to keep the energy on in their homes, to fill up their cars, to buy groceries,” said Sen. Carla Nelson, R-Rochester. “All of these prices are increasing dramatically. And it is just bad tax policy that we would over-collect to such an extent.”
The Republican proposal diverges from a plan from House Democrats that doesn’t cut tax rates, but includes one-time rebates of $325 per child under 17 starting this summer, said Rep. Paul Marquart, DFL-Dilworth, chair of the tax committee.
In the House DFL tax package, there are also tax credits of $3,000 per child under five capped at $7,500 in total tax credits. It also eliminates taxes on social security with income limits, increases a tax credit for student loans, and boost housing credit programs.
Missing from both bills is the pitch from Gov. Tim Walz to issue so-called “Walz checks,” one-time payments of $500 per individual and $1,000 for married couples. Marquart said the child tax credit rebate is similar to Walz’s plan.
This story will be updated.
Source: CBS
