Minnesota House Democrats announced specifics of a tax proposal that will include direct payments to taxpayers, a reduction in Social Security income taxes, and a new tax credit for families with children.
Minnesota would refund roughly $1.25 billion of the record $17.5 billion budget surplus as a tax rebate under the proposed tax plan.
Minnesota Social Security taxes
According to House Democrats, almost 2.5 million tax returns would be eligible for payouts starting at $275. Compared to Gov. Tim Walz’s $1,000 suggested beginning point, it is much less.
Democrats’ major tax cuts include rebates totaling $1.25 billion,subsidies for families totaling $1.30 billion, and lower Social Security taxes totaling $409 million.
In addition, there are tax breaks for homeowners, a new child and family tax credit worth up to $1,175 per kid, and an income tax credit for renters.
With an income cap of $75,000 for single filers and $150,000 for families, the tax rebates are worth $275 for a single filer, $550 for couples, plus $275 each for up to three dependents.
The $1,000 per taxpayer that Governor Tim Walz has pushed for approximately a year is much less than those rebates.
According to the plans, seniors earning $78,000 for singles or $100,000 for couples, or around 76% of the state’s pensioners, would no longer be subject to the Social Security tax.
Republicans opposed the partial repeal of Social Security taxes, which DFLers claim would be excessively expensive and favor the wealthy.
Read more: Property Tax/Rent Rebate Program: Payments of $450 to $1,000 may be made; Check if you’re eligible
Direct Payments, Social Security Tax, and New Credits
A fifth tax bracket with a rate of 10.85 percent for joint filers making more than $1 million and individuals making $600,000 is also included in the proposal; this measure would raise $530 million over the course of the following two years.
Additionally, there are tax reforms for businesses with foreign revenues that would bring in around $452 million over the following two years and more than $720 million by 2026–2027.
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