My Tax Cut Plan

My Tax Cut Plan  

Minnesota is overtaxed. On average, 12.1% of every Minnesotan’s yearly earnings goes to state and local government. Only four other states in the nation take more money from their citizens. Additionally, our state government levies a tax burden of roughly $4,996 on every citizen in Minnesota. This is the fifth highest in the nation.

Minnesota also ranks sixth for most corporate income tax collection per capita. On top of that, our state sales tax rate of 6.875% is the sixth highest of all 50 states.

As a result of this crazy over-taxation, Minnesota state government has a projected $9.2 billion surplus that it is collecting from you. Think about that, government places one of the largest tax burdens in the nation on us just to collect money it doesn’t need. Such over-taxation is unnecessary, unfair, and wrong. This money belongs to you, not government.

We need to end the oppressive taxes that the state forces on working Minnesotans. Next week, I am introducing major tax reform legislation that will give the surplus back to the people and permanently cut our overall tax burden.

Here’s my plan:

Eliminate Certain Taxes: Minnesota is a part of a minority of states that taxes Social Security benefits and imposes an estate tax when an individual passes away. Both of these taxes would be eliminated under my plan. Additionally, my bill would eliminate the State General Tax and the Alternative Minimum Tax.

Minnesota is also one of the only states that taxes people whenever they see the doctor. This 1.8% tax is known as the Sick Tax, and it would be eliminated from state law under my plan.

Simplify Our Taxes: Changing the way Minnesota collects taxes is a major component of my legislation. First, my bill would eliminate all state income taxes for individuals and businesses. My plan would then replace our income tax and sales tax with the “Fair Tax” over the next two years.

What is the Fair Tax? Simply put, it’s a tax on goods and services like a sales tax. When I go to the store and purchase something, a sales tax is applied, and I pay it. The Fair Tax works the same way. 

Under my bill, the Commissioner of Revenue and others would develop a plan with public input to transition to this new, consumption-based tax system. They will submit legislation to the Minnesota Legislature no later than February 1, 2023, to implement the Fair Tax. The Minnesota Legislature will then have public hearings and vote on the commissioner’s proposal.

Once approved, our state individual income taxes, corporate franchise tax, insurance taxes, and our sales tax would be replaced with a single Fair Tax on January 1, 2024.

Instead of having a complicated income-based tax system, our taxes would be based on what we spend. Furthermore, the Fair Tax will also include a series of tax rebates for families.

Eliminating needless taxes and simplifying our tax code with a commonsense consumer-based tax will make Minnesota more affordable and fairer for everyone. Furthermore, our taxes would be based on consumption, not on income. If you don’t spend a lot of money, then you won’t pay a lot in tax. If you spend a lot of money, then you will pay a little more in taxes. This keeps taxes proportionate, fair, and will ensure that government does not over-collect.

Additionally, my bill makes our taxes easier to understand and manage. Just think, you wouldn’t need to file state income tax returns!

Democrats Want to Ignore State Law

Yesterday, the Minnesota House of Representative voted on HF 2914/SF 2876. Throughout the COVID-19 pandemic, Governor Tim Walz acted unconstitutionally by signing executive orders that waived and suspended sections of Minnesota state statute. HF 2914/SF 2876 would give that authority directly to the Minnesota Department of Health to waive or suspend whole sections of state statute that apply to them.

Additionally, the bill allows the commissioner of Human Services to pay Child Care Assistance Program (CCAP) dollars for children that are not attending childcare because a childcare provider has closed a program.

Once again, Democrats continue their awful COVID policies even though the pandemic is long over. Under our constitution, the Minnesota Legislature writes the law and government agencies have to follow it. However, Democrats try again and again to subvert the elected voice of the people and give all authority to the executive branch and its agencies. This is wrong.

Furthermore, this bill is just more evidence that the Democrats want to keep paying people not to work. I hear from hardworking Minnesotans every day who are sick and tired of their government handing out massive amounts of taxpayer dollars to people who aren’t working. I couldn’t agree more. We need to get everyone back to work and stop rewarding those who refuse to work.

Frankly, this bill was an absolute mess and I voted against it. Unfortunately, it passed by a vote of 87-46.

For my speech on the House floor about this topic, please see the below video:

Steve Drazkowski