Session Update: Omnibus Tax Bill Sent to Senate Floor

The Senate Tax Committee forwarded the omnibus tax bill to the Senate floor Wednesday, April 6, with the intent of readying it for full Senate consideration later this week. Sponsored by Senate Tax Chair Carla Nelson, R-Rochester, the bill proposes conformity to a number of federal provisions, a reduction in the state’s first tier income tax rate from 5.35 percent to 2.8 percent and the elimination of taxes on social security benefits.

In addressing criticism that the Senate tax bill is unfair to lower income Minnesotans, Nelson said that the top ten percent of income earners in Minnesota pay 59 percent of the income tax revenue while only having 43 percent of the total aggregate income. "They are paying their fair share and more," she said. As for the lower income earners, those earning $12,876 annually and below, they receive a tax credit, Nelson explained. "Because in Minnesota, we are a progressive tax state, and we do care for those who do have the least amount of income."

Senator Matt Klein, DFL-Mendota Heights, said that about 543,000 filers will not receive a tax benefit from the bill. "The bill in front of us has zero dollars for student loan credits, for working family credits or child care credits," he said. When adding the cost of the tax breaks through 2025, Klein said that, "the money [state surplus] is all gone...if we pass this tax bill. A lot if it is going to very affluent people."

The bill is scheduled for a Senate floor debate Thursday, April 7.