With inflation at 40-year highs and working Minnesotans being squeezed more every day by soaring prices for gas, groceries, and energy, Minnesota Senate Republicans today made good on an early session promise to give back Minnesota’s historic $9 billion budget surplus with the largest permanent tax cut in state history.

The Senate approved a landmark tax bill that reduces the first-tier tax rate for all filers from 5.35% to 2.80%, and fully eliminates the state income tax on all Social Security benefits. The bill provides taxpayers with a much-needed $8.43 billion in relief over the next three years.

“Inflation is spiraling out of control and economic pressures are squeezing family budgets. It’s time to give folks relief,” Sen. Roger Chamberlain (R-Lino Lakes) said. “This will be the biggest tax cut in state history. It is not an election year gimmick; it is real, permanent tax relief, that makes every single paycheck bigger from now on.” 

• Reducing the first-tier tax rate: Minnesota’s lowest tax bracket is higher than the highest tax bracket in 24 other states. Over 2.4 million filers would benefit from the historic Republican tax rate cut, with an average annual savings of $759. A typical family making $100,000 would see a savings of $1,064 every year.

• Full elimination of the tax on Social Security income: Minnesota is one of just 13 states that tax Social Security benefits. Impacting taxpayers starting at $25,000 in income, the Social Security Income tax hits more than 407,000 Minnesota filers. None of the states that border us — Iowa, Wisconsin, Michigan, and South Dakota — tax Social Security income. Eliminating the Social Security tax would put $1.6 billion back into the hands of beneficiaries, with an average benefit of $1,254 every year.

In the last five years, Republicans passed billions in tax cuts, stopped Gov. Walz’s massive tax increases, and passed the first income rate tax cuts in 20 years. Senate Republicans will continue the fight for meaningful and permanent tax relief.