Senate Republicans have announced a multifaceted tax plan. The plan emphasizes putting money back in the pockets of families and individuals, particularly middle-income and low-income earners, so they have more security, freedom and flexibility.
The plan is built upon a large package of tax cuts and tax reform, which will ease the burden for every single Minnesota taxpayer. The plan calls for conforming to Section 179, reducing the bottom income tax rate, eliminating taxes on Social Security income, expanding the K-12 income tax credit and more.
“This tax plan benefits every Minnesotan,” said Sen. Gary Dahms of Redwood Falls. “Money invested back into people and businesses (rather than bureaucracy) grows the economy, gives people the chance to advance in their careers and provides families with the opportunity to use some of their income towards valuable experiences.”
What follows are some of Senate Republican tax priorities for 2020:
• Fully conforming to Section 179 of the federal tax code, which will help farmers and mom-and-pop businesses grow and invest in their operations by giving them more flexibility to deduct large equipment purchases. It is depreciated acceleration for small businesses and farmers, and its implementation would allow them the chance for greater investments in their businesses.
• Expanding the Angel tax credit will help innovative technologies and groundbreaking ideas reach new heights by giving people a greater incentive to invest in Minnesota companies.
• Reducing the lowest rate will positively impact everyone who pays income taxes in Minnesota and help low-income and middle-income workers. It will mark the second consecutive year Senate Republicans have reduced income tax rates: an achievement that hadn’t been accomplished in almost two decades prior to 2019.
• Eliminating the tax on Social Security income is long overdue. Minnesota is one of only 13 states that imposes this tax on retirees, many of whom are on a fixed income. Throwing out the Social Security income tax will encourage more seniors to stay in Minnesota after retirement. This is one of the most popular and frequent requests made by constituents.
• Reforms and reductions to charitable gaming rules will keep more money raised from gaming by local charities in the communities they support. These are games run exclusively by private non-profits like Little League teams. Currently, only a tiny sliver of the proceeds from these games benefits the charities’ missions. Aside from overhead, most proceeds go to state taxes.
• Expanding the K-12 education tax credit will help parents of school-age children save money when they file their taxes. More families will qualify for the expanded credit, and those who do will also see larger savings on their tax returns. Reforming school equalization aid will provide more money to school districts that have less property wealth and provide property tax relief to property owners in those districts.
“My goal concerning our tax relief package is to create equitable tax relief for all Minnesotans,” Dahms added.