St. Paul, Minn – State Senator Chris Eaton (DFL-Brooklyn Center) expressed her profound disappointment in the 2017 Senate Republican Majority Tax Bill and the tax chair’s characterization of the tax bill – saying “we play games in here all the time” with legislation.
“I am stunned the Chair of the Tax committee actually said, out loud and on the floor, that members of his caucus are playing games with bills,” Sen. Eaton said. “I take my position as a state senator very seriously, and I would never, under any circumstance, play politics with the lives of Minnesotans.”
“We have worked too hard in partnership with Governor Dayton to right the economic ship and get Minnesota’s economy back on solid ground,” Sen. Eaton said. “With a $1.6 billion surplus, we can do more to provide statewide property tax relief for regular Minnesotans, not just skyscraper owners. In addition, this bill includes a provision to send public taxpayer dollars to private schools. This ‘neovoucher’ system has no place in our budget, and I could not support a bill that gives money to private schools without fully funding our constitutionally-mandated public schools.”
Other provisions in the Republican tax bill include:
- First tier rate cut: $393.1 million in 2018-2019, $402.4 million in 2020-2021
The first-tier rate is applied to all income up to $37,110 for married joint filers and $25,390 for single filers. To minimize the benefit to higher incomes, the income level at which taxpayers reach the third and fourth brackets are lowered. The bill will result in an average savings of $2.15 per paycheck.
- Statewide business property tax: $95.47 million in 2018-2019, $194.63 million in 2020-2021. The bill removes the annual inflator on the statewide levy on commercial/industrial and seasonal recreational property and excludes the first $100,000 of commercial/industrial market value from the levy.
- Social Security tax subtraction: $74.9 million in 2018-2019, $80 million in 2020-2021
Under current federal and state law, married-joint filers with provisional income of $32,000 do not pay taxes on Social Security benefits. Other tax filers with incomes of $25,000 also do not pay taxes on Social Security benefits. Over these thresholds, 50 percent of benefits are taxed. This bill includes a new subtraction for married-joint tax filers earning between $32,000 and $115,300 of and single filers earning between $25,000 and $90,100.
- Estate tax cut: $29.6 million in 2018-2019, $116.2 million in 2020-2021
About 1,000 taxpayers are subject to the estate tax; most would become exempt under this bill. Small businesses and farmers already have a $5 million exclusion in current law, so this bill does not provide additional relief beyond what’s already available to those taxpayers.
- Student loan tax credit: $61.2 million in 2018-2019 only
A maximum $700 tax credit would be available to taxpayers paying student loans in excess of 10% of a taxpayer’s adjusted gross income. About 55,300 taxpayers would receive an average credit of $544. This credit is only effective for tax years 2018 and 2019.
- School Building Bond Agricultural Tax Credit: $34.9 million in 2018-2019, $98.9 million in 2020-2021. This property tax credit for agricultural land would be equal to 40% of the property taxes paid by farmers under local school bond referenda.