Senate leaders on Thursday announced a multifaceted plan to provide significant tax relief to Minnesota’s workers. The plan emphasizes putting money back in the pockets of families and individuals, particularly middle-income and low-income earners, as well as farmers, families with young children, and mom-and-pop business owners.

After several sessions of smart budgeting, the state’s rainy day fund is virtually full, and the state has a predicted $1.3 billion budget surplus.

“When I started in the Senate back in 2011, Minnesota’s financial picture was a mess. Now the reserves are full, we have a surplus, and the economy is thriving,” said Sen. Carla Nelson (R-Rochester). “I am glad our policies helped put the state back on solid financial ground, but Minnesota remains a high tax state and it’s time to provide relief to the workers of Minnesota who are the backbone of our success.”

The package includes a number of proposals Sen. Nelson has authored, including:

• Repealing the tax on Social Security income. Minnesota is one of only 13 states that imposes a tax on Social Security income. The state is taxing benefits that retirees already paid for during a lifetime of hard work. Eliminating this tax will deter the flight of retired Minnesotans to friendlier states who do not tax Social Security benefits. This is one of the most popular and frequent requests made by constituents at town halls, via social media, and through emails and phone calls.
• Fully conforming to Section 179 of the federal tax code will help farmers and mom-and-pop businesses grow and invest in their operations by giving them more flexibility to deduct large equipment purchases, driving economic growth throughout the state. 

• Expanding the Angel Tax Credit will spur innovative technologies and groundbreaking ideas, which lead to new jobs, fast growing Minnesota companies, and a stronger economy.
• Reducing the lowest income tax rate will positively impact everyone who pays income taxes in Minnesota and help low-income and middle-income workers in particular. It will mark the second consecutive year that Senate Republicans have reduced income tax rates – an achievement that hadn’t been accomplished in almost two decades prior.
• Leveling the financial playing field among school districts will provide property tax relief to property owners in districts with low property wealth.
• Incentives and reforms for affordable housing will help more Minnesotans secure the American Dream of homeownership.
• 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 nonprofits, 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.