St. Paul, Minnesota — The Minnesota House kept the pace moving quickly at the legislature today, passing $500 million in tax cuts for middle class Minnesotans and businesses on a bipartisan vote of 126 – 2.
“Minnesota’s economy has momentum and this middle-class tax cut will build on our progress,” said Speaker Paul Thissen. “These tax cuts will put more money in the pockets of nearly one million Minnesotans and help us continue building our economy from the ‘middle-out.’
Just one year ago Minnesota faced a $600 million deficit and an $800 million IOU to schools. The DFL-led legislature passed an honestly balanced budget that invested in education, jobs and property tax relief. Since, our schools have been paid back, our economy has created 50,000 more jobs, and the state now has a $1.2 billion surplus.
“Minnesotans are optimistic about the progress we have made and the direction we are headed,” said House Majority Leader Erin Murphy. “Today’s middle class tax cut is another positive step forward to continue building a better future in Minnesota.”
The House tax bill would cut taxes by $200 million for married Minnesotans, families, students, homeowners, and businesses by simplifying Minnesota’s income tax code. The bill would accomplish this by conforming to the federal tax code, including many retroactive provisions that will benefit Minnesotans who are paying their taxes now. 70 percent of Minnesotans have yet to file their 2014 taxes, so there is urgency to get these tax cuts signed into law.
Governor Dayton has signaled his support to move quickly to pass these tax cuts.
Middle-class tax cuts included in the House bill include:
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$111 million for middle income married families [Increase standard deduction for married filers (“Marriage Penalty Fix”)]:
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650,000 Minnesota families will see an average tax cut of $115.
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The vast majority of families claiming the standard deduction make less than $75,000.
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$36 million for low income working families [Boost the Working Family Credit to match Federal Earned Income Tax Credit (EITC).]
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54,000 working families will see an average tax cut of $300.
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$26.4 million for students, parents paying for college and students paying off loans (Education-related provisions including qualified tuition and related expenses).
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$7.2 million for homeowners who refinanced or had a short sale (Exclusion of discharge of indebtedness income).
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$3.9 million for new homeowners (Mortgage insurance premiums deduction).
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80,000 new homeowners will see an average tax cut of $60
Thanks to the state’s growing economy and budget surplus, the House Tax bill also will repeal three business-to-business taxes (warehousing and storage services, commercial equipment repair (including farm machinery) and telecommunications equipment) that were passed as part of the 2013 budget.