Tuesday, November 29, 2022

Minnesota house passes property tax cuts, family tax exemptions

Minnesota house passes property tax cuts, family tax exemptions

The Minnesota House of Representatives on Wednesday passed a tax plan that would offer credits to families, workers and seniors, as well as major estate tax relief and a substantial increase in student loan debt tax write-offs.

A resolution sponsored by Representative Paul Marquardt, DFL-Dilworth, which passed 69-62 on party lines, would provide $3.25 billion in tax cuts in 2025, though it was significantly less than a proposal initially approved by the Republican-controlled Senate. is cut. april. But Marquardt said the House tax bill seeks to provide relief to those who need it most.

“The basis of this tax bill is very Minnesotan. This is great Minnesota,” he said. “It looks at our families, it looks at our superiors and asks: How can we help the most?”

Under the House proposal, state taxes on Social Security income would be abolished for earnings of up to $75,000 for joint taxpayers and $58,600 for individual taxpayers. This contradicts the Senate’s proposal to eliminate the tax on Social Security income for all filers. Democrats have said the Republican push to eliminate all state Social Security taxes would largely benefit the highest earners.

For families, the House plan will provide a one-time tax exemption of $325 per child age 16 or younger. The Child Care Credit will provide $3,000 for each child under the age of 5 and up to a maximum of $7,500 each year.

Marquardt said the proposal also includes $275 million in direct dollar-for-dollar property tax cuts, which would be the largest reduction in 20 years. The student loan debt relief tax credit will also increase under the Democratic-Farmer-Labor-led plan, increasing from the current maximum of $500 to $1,400. Marquardt said 42,000 filers would be eligible.

The Senate tax bill passed on April 7 would do away with state taxes on Social Security payments and lower the rate to the state’s lowest income tax bracket. That motion, sponsored by Sen. Carla Nelson, R-Rochester, passed 42-24 with some DFL support.

Now that the House tax plan has passed, the House and Senate will iron out differences and negotiate a final resolution in a convention committee, before they can send it to the governor’s table. DFL proposals to provide tax credits and exemptions to senior citizens, families and others would need to be harmonized with a Senate Republican proposal to lower the minimum income tax bracket rate from 5.35% to 2.8% and reduce the state Social Security income tax. be terminated.

The clock is ticking. The legislative session should end by May 23, and government Tim Walz said he was not interested in recalling lawmakers for a special session.

During nearly five hours of House floor debate on Wednesday, Republican representatives said the House proposal didn’t go far enough, and called on lawmakers to use the state’s historic $9.25 billion budget surplus as an opportunity to provide a significant tax cut. needed. Rep. Glenn Gruenhagen, R-Glenco, pointed to possible signs that the economy could worsen over the next few years as the country grapples with inflation and high interest rates.

“There are storm clouds on the horizon,” he said. “We also have high electricity costs, high food costs in almost every area. Give these people a break, cut taxes dramatically and you’ll save yourself the next recession.”

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