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Legislative Update from Rep. Glenn Gruenhagen

Wednesday, April 7, 2021

Dear Neighbors,

The legislature has officially returned from its week-long Easter break and committees are working hard to move omnibus finance bills to the House floor for votes. With a little over six weeks to go until final adjournment, we have our work cut out for us to finish on time. This is because the Democrat House majority has been working incredibly slowly.

This week, Democrats unveiled their Tax bill. Unsurprisingly, the bill includes numerous tax increases that will prove harmful for Minnesotans.

In total, their bill raises taxes by more than $1 billion and fails to fully protect businesses from Paycheck Protection Program (PPP) tax hikes on forgiven loans. The bulk of the tax revenue comes from a brand-new 5th tier income tax of 11.15%, like the Governor's plan, which would give Minnesota the 2nd highest top income tax rate in the country and directly impact many businesses who have been hit hard during the pandemic. 

Additionally, it raises business taxes through changes to foreign income, and also caps PPP relief at $350,000, meaning many businesses will still be taxed on forgiven PPP loans that were used to pay employees and keep their doors open during a difficult year. 

Democrats are seeking even more tax revenue through their Transportation Omnibus bill including a new gas tax and light rail tax. In fact, their transportation bill raises more than $1.5 billion in tax and fee hikes through several provisions that never received a single hearing in committee.

Here is a quick rundown:

  • A gas tax increase ($363 million over four years) by linking Minnesota's gas tax to the Highway Construction Cost Index. This would result in an automatic annual inflationary gas tax increase. 
  • A sales tax increase to fund light rail and other transit ($916 million over four years). Democrats are proposing a half-percent increase in the Metro sales tax. 
  • A Motor Vehicle Sales Tax (MVST) increase ($120 million over four years). 
  • Registration tax increase ($149 million over four years) through changes to vehicle depreciation schedules. 

Luxury vehicle registration tax increases ($10.7 million over four years). To recap, Democrats introduced more than $1.5 billion in transportation tax increases without a single bill hearing or minute of discussion in committee.

Minnesota has a $1.6 billion surplus and billions more coming from the federal government. We don't need to be raising taxes on businesses and families, and slowing down our economic recovery. These proposals are wrong for Minnesota and I will do everything I can to make sure they do not become law.

Staying in Touch

Please do not hesitate to reach out to me to share your thoughts, questions, and concerns as it relates to state government. I can be reached at 651-296-4229 or via email at rep.glenn.gruenhagen@house.mn.

Have a great day,

Glenn

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