A look at the dueling tax proposals in the Minnesota Legislature
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While they're aligned on Social Security, there are plenty of tax policy differences that the House, Senate, and Gov. Tim Walz will need to resolve before the Legislature's May 22 adjournment.
💵 Rebates: One-time payments to taxpayers in both bills are much smaller than what Walz proposed. But all three parties agree on capping eligibility at $75,000 for single filers and $150,000 for couples.
🗳️ Local sales tax hikes: The Senate's version includes dozens of requests from local governments to ask voters to raise sales taxes, including St. Paul's pitch for a one-cent increase for parks and roads.
- House Tax Chair Aisha Gomez left them all out but offered to send $30 million to the capital city for street repair.
💰 A House proposal to create a fifth income tier with a higher rate for couples making $1 million or more is missing from the Senate's version.
- Senator Ann Rest said Senate Democrats are committed to not raising income taxes on individuals via the tax bill. Senate Democrats also rebuffed Walz's pitch for an added capital gains tax on earnings of $500,000 or more.
👪 Child tax credits: The House's proposed Child & Working Family Tax Credit allows up to $1,175 for up to three children – close to double the $620 per dependent credit included in the Senate plan.
- The House's program is structured to send more to lower-income families, while the Senate wants a flat rate for families making up to $80,000.
👮 Public Safety: The Senate bill sets aside $325 million in one-time funding to boost public safety budgets at the local level. That provision is not in the House draft.
👶 Child care tax credits: The Senate's plan includes a tax credit of up to $12,500 to offset the cost of childcare. Larger amounts go toward families with children under 5.
- The credit phases out for those making between $160,000 and $200,000.
🏠 Housing: Both bills aim to provide added property tax relief, but the House is on its own in putting more money toward renters’ tax credits.