Pratt, Senate Pass Biggest Tax Cut Ever to Provide Financial Relief Across the State

With inflation reaching its highest point in nearly 40 years, working Minnesotans are being pressured more every day by soaring prices for gas, groceries, and energy. 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.

With bipartisan support, the Senate today passed a landmark tax cut 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 staggering $8.43 billion in relief over the next three years.

“Hardworking Minnesotans are over-taxed, and our $9 billion surplus speaks directly to that problem,” said Senator Eric Pratt (R-Prior Lake).“Minnesota families and Main Street businesses are being hurt by historic inflation and are struggling to make ends meet. This massive surplus should be given back to taxpayers in the form of permanent tax relief, not one-time payments. We are also importantly getting rid of the outdated social security tax. Senate Republicans proposed the biggest tax cut ever, and today’s vote puts us one step closer to making tax relief a reality for Minnesota families.”

  • 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 savings of $759. A typical family making $100,000 would see a savings of $1,064.
  • Full elimination of the tax on Social Security income: Minnesota is one of just 13 states that tax Social Security benefits. Impacting taxpayers with just $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.

Republicans passed billions in tax cuts in the last five years, stopped Gov. Walz’s massive tax increases, and passed the first income rate tax cuts in 20 years. Today’s bill passage signals an effort to continue meaningful and permanent tax relief.