I have always supported a fair tax system that works for everyone and grows the middle-class. It’s the reason why as a state representative in 2013 I voted for a 2% income tax increase on the wealthiest 2% of Minnesotans to balance our state budget and pay for important services like universal all-day Kindergarten. As a result, our state is once again on stable financial footing after a decade of deficits and 98% of Minnesotans did not see any changes to their income taxes. Now, as a state senator, I find myself once again taking a hard look at adding more fairness to our tax system.
Late last year, the United States Congress approved sweeping changes to the federal tax code, which overwhelmingly favored big corporations and millionaires over middle-class Americans like you. Congress passed the bill with little public debate in a short amount of time. As a result of rushing through huge changes to our federal tax code, there is growing uncertainty and confusion about how the reforms will impact individuals and small businesses when tax filing season begins in January 2019.
Here in Minnesota, the Legislature continues to delay important public discussion about federal tax conformity – the process by which state lawmakers could decide to align our state tax code with the sweeping federal tax reforms signed into law late last year. All 50 states are wrestling with how to align their tax codes closer to the federal government’s new standards, but each state’s approach will differ, including Minnesota. To date, the Senate’s majority party has not released its tax bill, and there are just three weeks left until we are constitutionally obligated to complete our work. I am concerned that the majority party could rush the process and create even more unintended consequences for taxpayers.
If state lawmakers decide to fully conform our state tax code to the new federal changes, taxes will increase for nearly 1 million Minnesotans by an average of $489 next Spring. If state lawmakers do not conform, taxes will increase for more than 300,000 Minnesotans by an average of $200. Filling tax returns could also become complicated and confusing for most people as a result of big changes to deductions that create incompatibilities between the state and federal tax codes.
I commend Governor Dayton for releasing a tax conformity plan for public discussion weeks ago. You may or may not agree with the governor, but he deserves credit for putting a proposal on the table. Under the governor’s plan, more than two million Minnesotans will receive a tax cut (over two-thirds of filers). About 1.9 million families would receive an average tax cut of $177 through a Personal and Dependent Tax Credit. About 329,000 families would receive an average tax cut of $160 through the Working Family Tax Credit.
You can follow legislative discussions about tax conformity from the comfort of your own home. The Senate Taxes Committee meets weekly and publishes minutes and audio online at www.senate.mn/committees. I will not vote for any bill that includes taxpayer giveaways to big corporations and millionaires who are already living high on the hog while others are having a difficult time feeding their families.
If you have questions about this topic, please call my office at 651-296-2556, email me at firstname.lastname@example.org, or mail a letter to 95 University Avenue W., Minnesota Senate Bldg., Room 2411, St. Paul, MN 55155.