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House Democrats want tax surcharge on high earners

Posted by: Baird Helgeson under Funding, Minnesota legislature, Democrats, Republicans, State budgets Updated: March 19, 2013 - 4:38 PM

Minnesota House Democrats want the state’s highest earners to dig even deeper to bail out the state from its financial woes, proposing a temporary income tax surcharge that would catapult Minnesota into one of the highest tax states in the nation.

House Democrats want those making more than $500,000 to come up with about $854 million over the next two years, paying back K-12 public schools and allowing DFLers to make good on a signature campaign pledge.

“The bill we owe towards schools is past due,” said House Speaker Paul Thissen, DFL-Minneapolis. “And the right thing to do is to pay them back.”

Thissen unveiled the tax surcharge as part of a new budget outline that mapped out more than $2.4 billion in new revenue, largely for education and property tax relief. The financial draft did not outline where rest of the the money from come from, but Thissen said DFL Gov. Mark Dayton’s permanent tax hike would most likely be part of their final proposal.

If the two income tax hikes become law, the income tax for Minnesota’s highest earners — at least temporarily — could crest 11 percent, placing it among income tax outliers like Hawaii and Oregon. The proposal would also set Minnesota on a vastly different course than some other states, doubling down on income taxes as several Republican-led states are looking at scrapping the income tax system in favor of more sales and use taxes.

“Democrats want Minnesota to be number one in higher taxes,” said House Minority Leader Kurt Daudt, R-Crown. “Republicans want Minnesotans to be number one for job opportunities.”
 

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