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Legislative News and Views - Rep. Lyndon Carlson, Sr. (DFL)

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Minnesota House Passes Middle-Class Tax Cuts

Friday, March 07, 2014
Dear Neighbors,
 
Thursday, the Minnesota House of Representatives passed a bill that cuts taxes for middle-class Minnesotans and repeals three businesses-to-business taxes. As the Chair of the House Ways and Means Committee, I voted in favor of the legislation in committee and when it was passed on the House Floor.
 
Nearly one million Minnesotans – including married couples, working families, students, and homeowners – would receive a tax cut under this bill. A year ago, Minnesota faced a $600 million budget deficit and owed $800 million to our schools. Last year, we passed a balanced budget and now our schools are paid back, our economy is growing, and we have a $1.23 billion budget surplus. With a strong budget surplus and Minnesotans filing their tax returns we need to move quickly to enact these middle-class tax cuts.
 
Whenever Congress makes changes to the federal tax code, the legislature must decide whether or not to conform to those changes. The legislation passed by the House will provide $200 million in middle class tax cuts through permanent federal tax conformity.
 
Those tax cuts include: 
  • $111 million for middle income married families by eliminating the “marriage penalty
    • 650,000 families will see an average tax decrease of $115
    • The vast majority of families claiming the standard deduction make less than $75,000
  • $36 million for low income working families by matching the state’s Working Family Credit with the federal Earned Income Tax Credit (EITC)
    • More than 50,000 working families will see an average tax decrease of $300
  • $7.2 million for homeowners that refinanced or had a short sale  
  • $3.9 million for new homeowners through deduction of mortgage insurance premiums 
    • 80,000 new homeowners will see an average tax cut of $60
  • $26.4 million for students and parents paying for college and students paying off loans  
  • $1.8 million for Minnesota families with dependents
    • 25,000 families with household incomes below $38,570 will see a $65 tax decrease
  • $400,000 for adopting who receive adoption assistance from employers
  • $1.1 million for 60,0000 teachers with the classroom expense deduction for educators
  • $4 million for charitable contributions
  • $1.8 million for Minnesota families with dependents  
    • 25,000 families with household incomes below $38,570 will see a $65 tax decrease
  • $6.7 million for businesses - to make tax filing simpler for businesses
(Source: Non-partisan House Research) 
 
Thanks to our growing economy and a strong budget surplus, we can repeal business to business taxes that are no longer necessary. These taxes include the warehouse tax, the commercial equipment repair tax, and the telecommunications equipment tax. 
 
There is strong bipartisan support for middle class tax relief and to repeal these taxes. It is my hope that by working together we can get it done quickly and to continue moving Minnesota forward. Once these tax cuts are passed by the Senate and signed into law, those who have already filed their taxes can file an amended return to reflect these changes to our state’s tax code for the 2013 tax year. 
 
Please stay in touch during this year’s Legislative Session by sharing any questions, comments or other feedback. You can reach me by phone at (651) 296-4255 or by email at rep.lyndon.carlson@house.mn.
 
Sincerely,
 
Representative Lyndon Carlson
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