Minnesota Implements Millions of Dollars in Tax Relief

Published On: 5th June 2014

From the internet

Governor Dayton placed his signature on a new round of income tax changes in May, bringing the total of tax relief put in place during the legislative session to $550 million.

This second round of income tax relief totals $103 million and also gives tax refunds a boost of around 3 percent for a half million homeowners and six percent for the over quarter of a million renters in the state. The law also gives farmers some relief, as well as the spouses of veterans.

The tax savings will put much more money in the pockets of the over 2 million middle-class taxpayers in Minnesota and also benefit thousands of businesses, according to Dayton.

Minnesota is among a few states that have been experiencing a tax rebound since the peak of the recession, according to a Pew analysis. In 2011, Minnesota revenues surpassed their 2008 peak and increased by 20.6 percent in the final quarter of 2013. Only two other states had seen a larger increase.

The state is also expected to see a $1.2 billion surplus in their budget even with these tax cuts, according to a report released in February. Although the February and March revenues were lower than projected, that did not stop the tax breaks from coming to Minnesotans. The improvement in the economy is a major contributor to these income and business tax breaks that are expected to fuel Minnesota’s economy even more.

In all, the total number of bills that Dayton signed for both taxes and spending was four. Dayton said it is the most progress he has seen in a legislative session.

Some contend that Dayton signed $2.1 billion in tax increases in 2013 and just a fraction of that money is going to go back to taxpayers after this last bout of tax cuts.

Dayton has responded by saying that most of the tax increases in 2013 were on the wealthiest two percent of Minnesotans, while the tax cuts of this year are aimed at mainly middle-class families. Most Minnesota families are expected to see their tax bills going down because of the new budget. This is money that could be filtered into the economy in the way of consumer spending and that will further help Minnesota.

Because the tax cuts are aimed at middle-class Americans, those in the upper income brackets are not going to see any changes in their income tax bills compared to 2013 since the tax increases were aimed at the top two percent and the tax cuts were not to influence them.

Dayton does have two weeks from the end of this last session to sign or veto another 30 bills. He did not do any line-item vetoes on any appropriation within any of the four bills that he has already signed.