ST. PAUL – The Minnesota House on Thursday approved a bill providing $1.35 billion in tax relief over the next two years, including a $270 million reduction on the state tax on Social Security income.
It is the first House omnibus finance bill to receive a floor vote this session, something Rep. Bob Vogel, R-Elko New Market, said underscores tax relief as a top priority for the Republican majority this session. The House’s proposed tax reform (H.F. 4) is larger than plans offered by either the Senate or Gov. Mark Dayton.
“The more our government collects in taxes, the less money people have to spend on themselves and families,” Vogel said. “Our state is overtaxing citizens and this bill would provide some relief. The key is that not only would it help people keep more of their money, but it also mitigates our government’s unsustainable structural growth, and the continuing need for an ever-increasing reliance on tax dollars to support the system.”
Other provisions in the bill include one that would benefit middle-class families with $35 million going toward modifying the child and dependent care credit. A family of four with childcare expenses would be estimated to receive $660 in relief.
More than $125 million would go toward addressing college affordability. Families saving for college using 529 Savings Plans will benefit from expanded subtractions and credits. In addition, 77,500 students will receive, on average, a $640 reduction in their taxes through a first-in-the-nation tax credit for student loan payments.
Hometown employers would see $203 million in reductions to the extra state property tax they now pay on their small businesses by exempting the first $200,000 in property value from the statewide business tax, and future help by freezing its automatic inflator.
Farmers would receive significant relief, with $42 million to reduce the burden agriculture land owners pay for school capital referendums. Family farms also would benefit from a measure conforming the state death tax to the federal exclusion.
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