ST. PAUL – Today Senate Democrats passed their partisan and controversial tax bill. They claim it is the “biggest tax cut ever” however, it raises taxes by $1.2 billion from foreign sources through controversial worldwide reporting, which hasn’t been done anywhere else, provides paltry rebate checks, and doesn’t fully repeal the state tax on Social Security. It passed the Senate on a party-line vote.  

“With such a large surplus, we certainly don’t need to increase any taxes on anyone,” Senate Minority Leader Mark Johnson (R- East Grand Forks) said. “The fact that Democrats can’t find it in their $72 billion budget – a growth of 40 percent – to give seniors a tax cut is very disappointing. It’s broken campaign promise. There are 33 votes for a clean repeal of the tax on social security from Republicans, but not one Democrat would join us. That’s something I hope everyone hears about when they go home.” 

In fact, an amendment offered by Sen. Kupec (DFL- Moorhead) to repeal the Social Security with a tax increase was so extreme, even the DFL didn’t have the votes to pass it.   

The bill includes a very controversial tax known as “worldwide” or “global” reporting. Essentially, foreign-owned business operations in Minnesota only pay taxes on their Minnesota-based sales. Adding worldwide reporting would mandate the entire business operations to Minnesota taxes, even those outside the state or nation, an incredibly risky move that has never been done in other states. It is optional to use worldwide reporting in some states, which might be advantageous to the business if their foreign operations lost money.  

Rather than complicate the tax code and try to tax foreign operations, Senate Republicans offered amendments that would prioritize taxpayers in the future. One amendment would create a permanent and automatic refund program to ensure taxpayers are first in line when there is a government surplus another would require a supermajority vote be taken in the both the House and the Senate to raise income taxes. Democrats voted against these amendments on a party-line vote.  

Other amendments offered would ensure public safety aid dollars are used wisely. They offered an amendment to restrict the use of the public safety aid to only licensed peace officers, and another amendment to prohibit funds from going to cities or counties that had not taken actions to “Defund the Police” through reduced funding for peace officers over the last four years. These also failed on a party-line vote without Democrat support.  

The bill includes small relief for parents, but to give families a better deal, Senate Republicans tried to change the bill so the child tax credit would not expire in 2030, as the bill was written. Democrats ruled this amendment out of order and did not allow a vote. Republicans also tried to add an exemption for basic school supplies to give families a break as they are preparing for the arrival of a baby or preparing for the school year, which also failed on a party-line vote. However, Waconia Republican Sen. Julia Coleman had an amendment to expand the list of eligible baby products for a tax exemption that was unanimously included in the bill.