When news of a $1.9 billion taxpayer surplus broke in February, many Minnesotans anticipated some sort of tax relief would come. The Republican Party ran a campaign telling legislators to “Give it Back,” in the form of $350 rebate checks, although the majority of Minnesotans said that tax cuts should be directed proportionately to those who paid the taxes.
The Republican House majority proposed $2 billion in tax relief, but in the end got nothing from Governor Dayton and Senate Democrats. Instead, $550 million was spent to increase K-12 funding, $850 million was put into the state’s budget reserves which now total $2.5 billion. The other half-a-billion dollars in surplus went to additional spending increases in the $42 billion biennial budget, up from $35 billion in 2012.
As Alpha News has previously reported, Minnesota’s income taxes are tiered and some of the highest in the country.
- 5.35% up to $25,070 single-filer, $36,650 married, 2nd highest in the country
- 7.05% up to $82,360 single-filer, $145,620 married, 12th highest in the country
- 7.85% up to $154,950 single-filer, $258,260 married, 10th highest in the country
- 9.85% over $154,950 single-filer, $258,260 married, 4th highest in the country
In addition to very high income taxes, per the Tax Foundation, Minnesota ranks 10th in the country for corporate income taxes, 16th highest for property taxes, 12th highest for sales taxes, and 20th highest for gas taxes although Democrats this session sought a hike that would have put the state in the nation’s Top 5.
Legislators have indicated they’d be providing tax relief in 2016– an election year– although it’s highly unlikely they’ll simply cut rates. Instead, they’ll be back wooing voting blocs and special constituencies with various credits. Recall the $1.2 billion surplus in 2014, where $442 million was returned in the form of tax credits for working families making under $40,000, people who had to short-sale their home, homeowners who make under $110,000 and various other income-dependent credits.
Meanwhile, hundreds of thousands of Minnesota taxpayers will be left by the wayside, while the politicians decide exactly how and who to “give it back” to.