Newspaper article

House DFL Tax Plan Targets Top Earners, Smokers, Drinkers

Newspaper article

House DFL Tax Plan Targets Top Earners, Smokers, Drinkers

Article excerpt

House DFLers revealed their tax bill Monday, but before the rich, the smokers and the drinkers begin to moan too loudly, a word of caution:

This bill is dramatically different from one that is being worked up in by Senate DFLers and is different from the grand tax plans of Gov. Mark Dayton.

In other words, tax policy debates are just warming up.

The only sure thing is that taxes will go up. What's not clear is which taxes will end up higher when the session is over and the budget is balanced.

As expected, House DFLers are proposing a fourth income-tax tier, a rate of 8.49 percent on couples who have a taxable income of more than $400,000. But, in addition, the House plan would tack a two- year 4 percent surcharge on the wealthiest group to pay back the $854 million owed to schools.

The fourth tier -- and surcharge -- would affect just 1.1 percent of the state's wealthiest, according to House Speaker Paul Thissen. About 27,000 Minnesotans would end up paying $3,700 more a year than under the current plan.

Thissen and House Majority Leader Erin Murphy went to great pains to try to minimize what are certain to be GOP charges that the income tax rates would make Minnesota businesses non-competitive.

Yes, Thissen and Murphy said, that with the surcharge, the Minnesota rate would be the third-highest in the country. But when the surcharge "blinks off," the ranking would fall to 12th.

Murphy simply described the income tax portion of the House plan as "a more fair system that asks the wealthiest to chip in a little more.''

The fourth tier is a given among the House, Senate and governor. But rates differ, as does the income level that would be subject to a new top rate. But neither the Senate nor the governor have shown any interest in the surtax -- and the lofty national ranking that would come with it.

Of course, income taxes on the wealthiest represent only one portion of a tax proposal that Thissen says is how "the DFL lives up to the promises it made'' during November's campaigns. …

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