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MN GOP proposes tax cuts, caps
The latest budget forecasts show that Minnesota’s projected deficit is in better shape than anticipated previously, and Minnesota’s Republicans are never proposing tax cuts that would drive it back up. FOX 9’s Corin Hoggard has the details.
ST. PAUL, Minn. (FOX 9) - Minnesota's economy is on an upward trajectory, prompting Senate Republicans to propose a series of tax cuts and caps.
Proposed tax changes
What we know:
Senate Republicans are looking to align Minnesota's tax policies with popular federal changes, including eliminating taxes on overtime and tips. This proposal is expected to benefit a number of middle-income earners.
Sen. Karin Housley emphasized that this change would serve as a "lifeline" for small businesses, allowing them to offer higher take-home pay without affecting their bottom line.
Additionally, the proposal includes reducing vehicle registration fees and implementing a cap on property tax increases related to inflation. Sen. Julia Coleman pointed out that the current $3.7 billion surplus indicates that taxes are too high, suggesting room for these changes without harming state finances.
State budget surplus forecast
The backstory:
The state's latest budget forecast indicates the surplus will shrink to $377 million by 2029. The Minnesota Department of Revenue estimates that eliminating taxes on overtime and tips could result in nearly $1 billion in lost revenue over the same period.
DFLers argue that only a small percentage of service industry workers are benefiting from the federal changes, with the savings outrun by negative impacts from increased insurance costs and reduced SNAP benefits.
Rep. Aisha Gomez criticized the proposed changes, stating they would result in a significant redistribution of wealth from the poor to the rich, echoing concerns about the impact of the Tax Cuts and Jobs Act (TCJA).
What we don't know:
The total cost of implementing these proposed changes remains unclear, and there is uncertainty about whether they will pass, given that Senate Republicans are in the minority and will need Democratic support.
The Source: Information from FOX 9's Capitol reporter Corin Hoggard.