Say Largest Tax Cut Package in History Includes Tax Rebates, $1.24 Billion Cut in Social Security Taxes, $325 Million for Public Safety
ST. PAUL, Minn. – Senate Tax Chair Ann Rest (DFL-New Hope) and Vice Chair Matt Klein (DFL-Mendota Heights) today touted Senate passage of the largest tax-cut package in state history that includes $1 billion in tax rebates for Minnesotans, a $1.24 billion cut in Social Security taxes, and more than $2 billion to fund both a child tax credit and relief for families with extreme childcare costs.
The two lawmakers said the bill also includes money for local governments to keep property taxes down and $325 million to bolster public safety in every community across the state. It also exempts baby products, including car seats and changing tables, from state sales taxes.
“The Senate has passed $4 billion in tax relief – the largest package of tax cuts in state history – with a focus on putting money in the pockets of Minnesota’s middle-income families, individuals and seniors,” said Chair Rest. “Our bill also provides $325 million to every community across Minnesota to bolster public safety efforts. And the money we provide to local governments will allow them to keep property taxes down and to provide quality local services.”
“This bill is focused on helping people with everyday costs such as childcare expenses, property taxes, and energy costs,” said Vice Chair Klein. “It also provides the largest Social Security tax cut in state history, giving ongoing relief to 76 percent of Minnesota seniors who receive benefits. This tax relief package will address rising costs and help those who are struggling,” By putting money back in the pockets of families across the state we are doing just that with this tax bill. .”
The bill includes:
- $1.1 billion of the surplus goes back to Minnesota taxpayers through one-time refundable tax credits totaling $558 per couple with income up to $150,000. Single filers with income up to $75,000 would receive a $279 rebate. Taxpayers with children would get an additional $56 for each child, up to three children.
- $1.3 billion over four years in tax relief through a new Child Tax Credit equal to $620 per-child for up to three children under age 18 or dependents with disabilities. The credit applies to families making up to $80,000 and will greatly reduce child poverty across the state, the lawmakers said.
- $ 1.24 Billion in tax savings for 322,000 Minnesota seniors, the largest Social Security tax cut in state history. No Minnesota couple earning less than $100,000 will and individuals earning under $78,000 will pay Social Security taxes. Under this provision, 76 percent of Minnesota Social Security recipients will not pay taxes on their benefits.
- Seniors, who receive public pensions instead of Social Security because they worked jobs such as state troopers, firefighters, public safety officers, and some teachers will be able to subtract up to $25,000 of those benefits if they make less than $120,000/year.
- Property tax relief for homeowners, farmers, and small resort owners squeezed by fast-rising property values, and up to $2,000 refunds for homeowners whose property taxes increase more than 10 percent and $100 in one year.
- $907 million to help Minnesotans pay childcare costs. Up to $12,500 refundable tax credit for families earning up to $200,000. Credit is equal to 50% of eligible employment-related childcare expenses.
- Sales tax exemption for Minnesotans who buy baby products like car seats, strollers, cribs and baby wipes.
Public Safety Prioritized in Senate Tax Bill
The Senate tax bill also includes $325 million to address public safety needs in communities across the state. Of that amount, $300 million will go to local governments in one-time funding to bolster their efforts to address urgent public safety needs. The remaining $25 million is set aside over the next five years for grants to local governments to fund criminal investigations and to help law enforcement respond to mental health calls.
The bill also allows the state to pay off U.S. Bank Stadium 23 years early, which provides about $220 million in interest cost savings to Minnesota taxpayers.
They said the bill raises revenue on multinational corporations, leveling the playing field for Minnesota’s main-street businesses that can’t shift income to avoid paying taxes.