Republican Legislators Call for Significant Tax Cuts

Tim_Miller_and_Julia_Coleman_for_Newsletter.jpgMinnesota’s office of Management and Budget (MMB) released its February revenue forecast at the end of February. The report projects a surplus of $9.253 billion for the next budget cycle, which is up from the previous $7.7 billion surplus in the December forecast.

State Sen. Julia Coleman (R, Carver County), the vice chair of the Senate Tax Committee joined fellow Senate Republicans in calling for permanent tax relief.

The major changes proposed to the state’s tax code reduce the first-tier income tax rate, impacting every Minnesotan, from 5.35% to 2.8%. They would also eliminate the tax on Social Security. If passed, these proposed changes would bring about the biggest tax cut ever and provide $8.51 billion in tax relief to taxpayers over the next three years. 

Minnesota is one of just 13 states who tax Social Security benefits and is partially surrounded by states who do not tax this benefit – Iowa, Wisconsin, Michigan, and South Dakota. Estimates show for the 410,900 Minnesotans who pay this tax, the average relief would be $1,313. Eliminating the Social Security tax would put $539 million back into the hands of beneficiaries. Bills introduced to eliminate the Social Security tax in the legislature have had bipartisan support.

Additionally, according to the National Tax Foundation, Minnesota’s lowest tax bracket is higher than the highest tax bracket in 17 other states. Under the Republican proposal, a Minnesota family making $100,000 would see a tax savings of over $1,000 each year. A typical individual making $37,000 would receive about a $500 annual reduction.

In comparison, the New House Republican Caucus points out that Gov. Walz wants to give taxpayers a one-time check for $500 (single) or $1,000 (married), with no long-term savings or reductions. 

In a move to return the entire surplus to Minnesota taxpayers, the members of the New House Republican Caucus are proposing to eliminate four major state taxes (the tax on Social Security, the sick tax, the death tax, and the alternative minimum tax). In addition, they are proposing cuts to individual income taxes and corporate taxes.

As Sen. Coleman wrote to her constituents on March 1:

“While every family is facing its own unique challenges, we know they need relief, and they need it now. Families don’t need some big government program that picks winners and losers - they need relief. That’s what’s so great about this tax bill. It delivers meaningful tax relief, not a gimmick check, every year going forward. On top of that, we want to see our seniors stay in our communities. There are too many ‘little Minnesota’ communities in lower-tax states like Florida, Texas, or Arizona. We want them to stay here and be part of our communities. I want them to spend time with their grandchildren and not have to count days on a calendar to qualify as a resident of a state with a better tax climate.” 

Watch the statement of Rep. Tim Miller, member of the New Republican House Caucus, here