House DFLers released their tax plan this morning. (The Senate DFL tax plan is expected Tuesday.)
In her blog, TPT’s Mary Lahammer notes that: House Tax Chair Ann Lenczewski said “it’s the beginning of negotiations to close out the end of session.” The state representative said it’s reasoned, balanced and fair. She noted that the plan contains reform proposals and even equated it to what Republican President Ronald Reagan did.
Keep in mind that Gov. Tim Pawlenty will likely veto any tax hikes (and there were consequences for the Republicans who went against him last time).
Here’s how the House leadership describes the plan:
Highlights of the 2009 Tax Bill
• Proposes the most significant tax reform in over 20 years.
• Eliminates dozens of business subsidies and tax expenditures that are outdated, ineffective, regressive or that we simply cannot afford.
• Gives counties a new option that protects property taxpayers, saves jobs, provides essential services, and strengthens the state and local relationship.
• Increases accountability, value and efficiency to property taxpayers.
• Simplifies the tax system so that it is easier to understand, comply with, and administer.
• Increases the progressivity of the tax system by replacing tax subsidies that disproportionately benefit upper-income earners and creates a new fourth-tier income tax rate of 9% on married joint filers making over $300,000.
• Eliminates corporate loopholes and business subsidies that currently create winners and losers in Minnesota.
• Keeps and grows jobs in Minnesota.
• Helps small businesses and farms through Section 179 tax cuts.
• Gives Minnesota companies a competitive advantage by eliminating the job tax that accelerates single sales apportionment to tax year 2009.
• Doubles the Research and Development Credit on the first $2 million of R&D expenditures and makes S-corporations and partnerships eligible for the credit.
• Conforms to many newly passed federal provisions to make tax filing easier for businesses and individuals.
• Protects community jobs by preserving Local Government Aid to cities.
RECOUPING GOVERNMENT COSTS
• Increases the cigarette tax by 54 cents a pack to the same level as Wisconsin to recoup associated health care costs. Research shows that smoking-related health care costs actually equal $10.28/ pack.
• Increases total alcohol taxes for the first time in over 20 years by 3 to 5 cents per drink to recoup associated alcohol abuse costs. Research shows that the economic costs associated with alcohol abuse amount to $4.5 billion a year or $900 for every person in the state of Minnesota.