Dayton Sticks To His Word, Wants To Raise Taxes On Wealthy
Minnesota’s Governor Mark Dayton has unveiled his budget proposal, and it seems about half of his plan to fix the state’s budget deficit comes from higher income taxes on the wealthy. Dayton said that his plan looks this way because he wanted to “keep my promises I made to the people of Minnesota last fall.”
Dayton outlined a two-year, $37 billion budget on Tuesday as the state tackles a $6.2 billion budget shortfall. Dayton’s plan calls for more than $2.8 billion in new income taxes, which he says would fall on the top 5 percent of income earners, and a property tax on million-dollar homes. Dayton said other steps he takes would protect most taxpayers from increases, including safeguards against property tax hikes many homeowners have been coping with.
Dayton’s tax plan would impose a new fourth bracket of 10.95 percent for single filers making $130,000 or more in taxable income and couples who make more than $150,000. He also would enact a three-year surtax on people with $500,000 or more in taxable income.
Assistant Revenue Commissioner Matt Massman said the tax increases would be partially blunted by federal tax reductions approved in December. Someone at the bottom end of the new tax bracket could expect to pay $139 more per year in state income tax while a couple with $1 million in taxable income could expect a $37,000 hit, according to state calculations.
The conservative Tax Foundation ranks Minnesota and New York as tied for the country’s eighth-highest tax income rate currently. Minnesota’s top tax rate of 7.85 percent applies to taxable incomes starting at $75,000 for individuals and $132,000 for couples.