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Legislative News and Views - Rep. Greg Davids (R)

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RELEASE: Governor's budget raises taxes on all income levels, makes tax code more regressive

Tuesday, April 17, 2018

ST. PAUL, MN—An new analysis conducted by Governor Dayton's own Department of Revenue shows that tax changes proposed in the governor's supplemental budget would raise taxes on Minnesotans of every income level, and make Minnesota's tax code more regressive. The Department of Revenue issued the report (attached), known as a tax incidence study, on Monday at the request of Rep. Greg Davids, R-Preston, Chair of the House Taxes Committee.

The analysis found that under the Governor's plan, Minnesotans in every income bracket -- not just the rich -- would experience a tax increase, and that households making less than $32,000 would be hit hardest. In total, it would make Minnesota's tax code more regressive in nature. Governor Dayton has proposed reinstating more than $1 billion in health care tax increases, repealing tax reductions enacted last session, and numerous changes reacting to tax changes at the federal level.

"Governor Dayton's tax plan would mean more money taken from Minnesota families of all income levels," said Rep. Davids. "While the Governor likes to tell Minnesotans that he only wants to raise taxes on the rich, we now have evidence from his own administration that his plan would make our tax code more regressive and hit lower-income families hardest. His plan is fundamentally unfair, and wrong for Minnesota."

This new analysis directly contradicts claims by Governor Dayton that his budget "would cut taxes for over 2 million Minnesotans and their families," and by Revenue Commissioner Cynthia Bauerly that "[t]he Governor’s 2018 tax bill prioritizes low-income and middle-class families" — statements that omitted the full context of the Governor's proposed tax changes to garner positive—but incorrect—headlines.

The House Taxes Committee plans to hold a hearing to review the Governor's tax bill at 10:15AM on Tuesday, April 17 in Room 200 of the State Office Building. Rep. Davids is crafting a tax conformity plan set to be released in the coming weeks that he says aims to hold as many Minnesotans as possible harmless.

"While Governor Dayton and Democrats want to raise taxes on Minnesotans rich and poor alike, Republicans will focus on returning the surplus to Minnesotans in the form of meaningful tax relief, and holding Minnesotans harmless as much as possible as we deal with changes to the federal tax code," Davids concluded.

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