Late last year, President Trump signed into law the largest piece of federal tax reform in nearly three decades. Since then, millions of Americans are seeing more money in their paychecks and hundreds of companies have pledged to spend billions of dollars on charity, increased wages for employees, and reinvestment in American jobs.
Here in Minnesota, companies like TCF Bank and Priority Courier Experts, are giving bonuses to their hardworking employees as a result of these tax cuts. On that note, our economy here in Minnesota has continued to improve in recent months thanks to these reforms. Highlights of this growth include:
As you can see demonstrated in the statistics above, tax relief and reform is a positive for our economy. In many cases, tax reform leads to higher revenue. For the past few months here in Minnesota, tax revenue collections have been hundreds of millions of dollars higher than projected thanks to spurned economic growth and increased confidence from tax reform.
Even nationally, the federal government is seeing higher revenue in recent weeks since the passage of tax reform. Visit this link here to read more about increased revenue coming into the federal treasury.
In addition to federal reform, my colleagues and I at the state level passed the most meaningful piece of tax relief legislation in 20 years last session right here in Minnesota. Thanks to these reforms $650 million in tax relief is on the way for Minnesota families over the next two years, and $790 million in 2020-2021. Specific relief includes:
Heading into this year’s legislative session lawmakers will be faced with an important decision regarding taxes: should the state conform to the new federal tax code?
If we elect NOT to conform, the process of filing in Minnesota, along with compliance and auditing, will be a complete mess. Think of the MNLARS debacle but with taxpayers’ returns.
Should the state decide to conform to the federal tax code, Minnesota will experience an increase in tax revenue. The Department of Revenue’s preliminary estimate for the impact is $849 million in 2018-2019 and $1.5 billion in 2020-2021, however this amount is likely to drop in the final estimate. Either way, the House Tax Committee will have to take steps to make sure the increased tax revenue is returned to the taxpayer to prevent any sort of widespread tax increase.
I am a member of the tax committee and will be a supporter of eliminating the tax increase. Minnesota is already one of the top tax and regulated states in the nation we need continued tax and regulatory reform that lowers the burden on Minnesota citizens, farms and businesses creating a more prosperous future for our children and grandchildren.
Stay tuned for more information on this as session progresses.