Senate tax cut plan gives surplus back to taxpayers

Today, the Minnesota Senate Republican majority announced a tax cut plan that ultimately returns the state’s estimated $1.3 billion budget surplus back to taxpayers. The multifaceted plan includes a series of tax cuts aimed at benefitting low- and middle-income Minnesotans.

“Last year, we passed a budget that fully our funded state government. Now, with a state budget surplus, it’s time to focus on and support the budgets of families in our state,” said Senator Eric Pratt (R-Prior Lake), chair of the Senate Jobs and Economic Growth Finance and Policy Committee. “Every single Minnesotan – from students to families to seniors – will benefit from our tax cut proposal. I believe the best way to further stimulate economic growth is putting more money back into the pockets of Minnesotans.”

The proposal includes more than $1 billion in total tax cuts, including:

  • A reduction to the lowest income tax rate, which would be the second consecutive year of income tax rate cuts;
  • An expanded K-12 education tax credit, targeting more families with school-age children;
  • Completely eliminating the income tax on Social Security benefits, bringing Minnesota in line with the other 37 states that do not tax Social Security benefits as income;
  • Full conformity with Section 179 of the federal tax code, allowing farmers and small business owners to deduct large equipment purchases;
  • Expanding the Angel Tax Credit, providing greater incentive to invest in Minnesota companies;
  • Reforms to school equalization aid, providing more money to school districts with less property wealth and bringing property tax relief to all property owners in these districts;
  • Reallocating more mortgage and deed tax revenue to affordable housing programs;
  • Property tax classification and rate reductions, allowing more people to realize the dream of homeownership; and
  • Reforms to charitable gaming rules, allowing local charities to invest more money in their communities. 

The legislation awaits consideration by the Senate Committee on Taxes.

Senator Eric Pratt, of Prior Lake, represents Scott County in the Minnesota Senate. He serves as chair of the Senate Jobs and Economic Growth Finance and Policy Committee.