Senator John Jasinski (R-Faribault) and Minnesota Senate Republicans proposed the largest tax cut in state history today. The proposal reduces the first-tier income tax rate from 5.35% to 2.8% and eliminates the state’s tax on Social Security benefits. If passed, the changes would be the biggest tax cut ever and provide $8.51 billion in tax relief to taxpayers over the next three years.  

“Ever since we learned the state has a record budget surplus, I’ve heard the same things from my constituents: Give it back,” said Sen. Jasinski. “I agree. Government took far, far too much from taxpayers. We’re going to give it back the right way, through permanent, significant tax relief that makes your paychecks bigger month after month after month, not through an election year gimmick worth a few hundred bucks.”

According to the National Tax Foundation, Minnesota’s lowest tax bracket is higher than the highest tax bracket in 17 other states. Under the Republican proposal, a Minnesota family making $100,000 would see a tax savings of $1,000 each year. A typical individual making $37,000 would receive about a $500 annual reduction. Under the Governor’s tax proposal, the same family would receive one $350 check, and an individual filer would receive a $175 check, with no long-term savings or reductions.  

The proposal also eliminates the tax on Social Security and Disability Income, something Republicans have advocated for years. Minnesota is one of just 13 states who tax Social Security benefits and is partially surrounded by states who do not tax this benefit –  Iowa, Wisconsin, Michigan, and South Dakota. Estimates show for the 410,900 Minnesotans who pay this tax, the average relief would be $1,313. Eliminating the Social Security tax would put $539 million back into the hands of beneficiaries. Bills introduced to eliminate the Social Security tax in the legislature have had bipartisan support. 

“We are also going to fully eliminate the tax on Social Security income, as promised,” added Sen. Jasinski. “This is one of the most popular issues I hear about, and it is long overdue. I am confident it will pass the Senate. The question is whether Gov. Walz and House Democrats will be on board. If you want us to eliminate Social Security taxes, call the governor and call your House Democrats and ask them to help us get it done.”

Last December, the state’s budget forecast included a $7.7 billion surplus. An updated budget forecast is planned for Monday, Feb 28.