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Grassroots group praises Senate tax plan for income tax cuts and building on federal tax reform
St. Paul, MN – Americans for Prosperity-Minnesota (AFP-MN) on Thursday commended the Senate for passing HF4385, a tax reform package that provides a state income tax cut for Minnesota families and ensures simplicity in tax preparation by largely conforming with the recently reformed federal tax code. Earlier this week, the House passed its own tax reform package, into which the Senate today substituted its language. The two conflicting versions of the bill will be reconciled in conference committee.
“The Senate’s tax plan is a big step in helping Minnesota become more competitive in attracting and retaining residents and creating jobs. Putting more money back in the hands of hard-working families is the best thing we can do to enable our communities to grow and thrive,” said Jason Flohrs, AFP-MN State Director. “We applaud the Senate for passing a tax plan that builds on the benefits of federal tax reform, and excludes the regressive tax increases proposed by Governor Dayton.
“Part of the state’s out-of-control spending problem is directly tied to automatic spending increases in the state budget and automatic inflators related to revenue growth,” Flohrs continued. “This bill would ensure that Minnesota taxpayers benefit first when the state over-collects revenues beyond what is needed to meet budgeted priorities.”
The Senate tax plan provides a state income tax cut for 82% of working families, and would protect 99.9% of tax filers. Like the House tax plan, the Senate bill features the first individual income tax rate reduction since 2000 and excludes a provision in Governor Dayton’s tax proposal that reinstates the regressive sick tax on health care services.
The Senate bill would also automatically reduce individual income tax rates in the future when the November forecast projects a significant surplus. Additional cuts would continue to be reduced if those budget surpluses continue into subsequent years.
Without specific action to address tax conformity issues, many Minnesotans would have faced unintended state tax increases as a result of the interaction with federal tax changes.
For further information or an interview, reach Jason Flohrs at JFlohrs@afphq.org.