House DFL unveils new tax relief plan

04/2023(Quinn Gorham)
Published: Apr. 17, 2023 at 6:47 PM CDT
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ST. PAUL, MN -- Monday, DFL lawmakers in the Minnesota House laid out a $3B tax relief plan with the unveiling of their Tax Omnibus Bill. According to Caucus leaders, the bill brings forth a historic investment in tax relief.

“We’re bringing forward the largest tax cuts in state history,” said Speaker of the House Melissa Hortman (DFL - Brooklyn Park). “Our bill contains tax cuts in the form of credits, rebates, and other provisions that will help Minnesota workers, families, and seniors.”

The roughly 300-page bill package contains several new tax cuts in different forms.

If passed, most Minnesotans would be eligible for direct tax rebate checks of $275 (Eligibility: Single filer earning less than $75,000 per year, joint filer less than $150,000).

The new bill also includes provisions for $1000 student loan credits, property tax refunds, child tax credits, and more.

Local Government aid also gets a $100M/year boost, and $75M is dedicated solely to assistance for tribal nations.

“Our tax bill takes steps to make our tax system fairer and more equitable and fund the priorities that Minnesotans value most, both now and into the future,” said Hortman.

Perhaps the most divisive tax issue of the session so far, however, has been whether to repeal the state’s social security tax.

Many Republicans and even some DFLer’s have pushed for a full repeal since the start of the session.

While the new plan doesn’t fully repeal the Social Security Tax, it does eliminate it for an additional 24% of the state’s population.

“Currently 52% of Social Security recipients pay no tax on their Social Security benefits. Under our plan, it would be 76% of those receiving benefits who wouldn’t pay,” said Rep. Aisha Gomez (DFL - Minneapolis).

The lack of a full repeal has those across the aisle less than pleased.

" It is time for once and for all that we fully eliminate that taxation on all social security income, and that includes disability income as well,” said Sen. Carla Nelson in a press conference the Senate GOP held shortly before the Tax bill was unveiled.

Gomez believes any additional investment would have tied up too much money.

“Exempting all social security is 1.3 billion in this biennium and 1.5 billion in the tails,” Gomez said.

In their press conference earlier in the day, Republicans slammed the DFL for “out of control spending,” and accused DFLers of raising taxes statewide by roughly 9.6 billion dollars.

“The Democrats budget this year will lead to higher taxes now, and even higher tax in the future to support their aggressive government growth,” said Senate Minority Leader Mark Johnson (East Grand Forks).

Their estimates covered new taxes on things like vehicle registration, paid family medical leave, cannabis, and top-tier income tax. It’s important to note that their estimate counts both House and Senate bills in a couple of places and isn’t a perfect estimate of what the final state budget will be.

“[There are] at least $9.6 billion of tax increases over the next four years, likely to pass either the House or the Senate, emptying every Minnesota pocketbook to support their out-of-control spending,” said Johnson.

The Senate Tax Bill is expected to be released later this week,