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Dear Neighbor,
With a state budget surplus of around $18 billion, the least we can do this session is to eliminate the state tax on Social Security, providing some breathing room for seniors ? particularly those on fixed incomes. I have co-authored bills H.F. 557, 153 and 136 to make it happen.
Minnesota is one of just 12 states that still tax social security benefits. With a $17.6 billion state budget surplus, and price increases straining family budgets, the time is right for a full repeal.
It seems like everyone I talk with supports eliminating this tax that?s unnecessary and hurts our seniors. Minnesota?s tax structure is unfriendly to retirees. Reports indicate Minnesota loses more domestic residents to other states than it gains. Business and personal finance publisher Kiplinger lists Minnesota among its ?not tax-friendly? states for retirees, indicating, ?The North Star State offers cold comfort on the tax front to retirees.?
A full Social Security tax repeal would benefit an estimated 473,000 people with an average tax savings of $1,276. In contrast, Gov. Tim Walz?s budget proposal doesn?t fully repeal the state Social Security tax, with only 43% of Minnesotans receiving some form of relief ? on average, $278 per household.
We can?t do anything about our cold winters, but Minnesota?s tax structure certainly is at least a factor in retirees deciding to relocate and that?s something we can change. Democrats signaled they were all-in for a repeal of the Social Security tax last fall. Now, more than a month in to the 2023 session, bills related to this subject have remained on the back burner in the House.
I hope we can work together to get this done and take care of our seniors this session.
In other news, a committee I serve this week conducted a hearing for a bill that would increase state aid for local governments and county programs. While I?m OK with those appropriations, automatic inflator provisions attached to the spending are concerning.
Also, a bill I have authored creating greater consistency in how solar installations are treated from a tax perspective received a favorable reaction when I presented it to a committee this week. My bill simply closes a loophole that has raised assessment concerns when multiple small solar installations placed on the same parcel of land are treated differently than one installation of a similar size on a different parcel of land. This bill remains in the mix for approval later this session.
Have a good weekend and, until next time, please stay in touch.
Sincerely,
Paul
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