Saint Paul, Minnesota – Minnesota House DFLers announced details of their tax bill today, a lynchpin of their plan to balance the state’s $627 million deficit without gimmicks, pay back the $850 million owed to our schools, and make strategic investments in education, middle class tax relief and job creation.
“We told Minnesotans last year that the DFL would be on the side of the middle class,” said Speaker Paul Thissen. “We told them we would balance our state’s books once and for all and in a responsible way. We told them that we would pay off the debt that we owe to our schools and make needed investments in education, jobs and property tax relief. This bill is how we live up to those promises.”
“The old way of balancing deficits on the backs of the middle class and our children is over,” said House Majority Leader Erin Murphy. “Minnesotans spoke loud and clear last year and we listened. Our plan will make historic investments in education and pay for them responsibly and fairly by asking big corporations and the wealthiest Minnesotans to pay their fair share.”
Highlights of the House DFL tax bill include:
Pays back our schools and eliminates budget gimmicks: Pays back the $854 million IOU to Minnesota schools through a temporary income tax surcharge on only the wealthiest 0.5% of Minnesotans (taxable income greater than $500,000 per year for joint filer).
Middle class property tax relief: Provides direct property tax relief for nearly 1 million Minnesotans through the Homestead Credit Refund, retooled renters’ credit and increased funds to cities and counties.
Asks wealthiest Minnesotans to pay their fair share: Raises income tax rate to 8.49% on the wealthiest 1.1% of individuals (taxable income greater than $400,000 per year for joint filer). This increase would only affect 3.3% of businesses.
Closes Corporate Loopholes and Repeals Preferential Tax Treatment: Eliminates corporate loopholes that allow corporations to shelter profits overseas and eliminates other subsidies that are outdated, ineffective, or that we can no longer afford.
Promotes economic development and job creation: Keeps and grows jobs in Minnesota through investments in a Rochester Destination Medical Center, Mall of America Expansion, and 3M expansion in Maplewood.
Tax relief for Minnesota businesses: Levels the playing field between Minnesota bricks and mortar retailers and online retailers with the affiliate nexus; simplifies taxpaying with an upfront exemption for capital equipment; and improves the Angel Investor Tax Credit and the Historic Credit. .
Recovers State Costs from Tobacco and Alcohol Consumption: Increases the user-based fees on cigarettes to $2.83 per pack, helping recover state costs associated with tobacco use. Increases the user-based fees on alcohol by 84 cents per twelve pack, 47 cents for bottle of wine and $1.58 for bottle of liquor.
Tax relief for veterans: Creates a veterans jobs tax credit for when Minnesota business hiring a vet and expands income tax credit for veterans.