ST. PAUL – State Rep. Dean Urdahl, R-Acton Township, said he opposes the basic premise of a tax bill House Democrats approved on Thursday because it raises taxes by more than $1 billion amid a historic state surplus.
“The state has surplus revenue north of $4 billion and the House majority still wants to raise our taxes,” Urdahl said. “It is just fundamentally wrong and completely out of touch to raise taxes on people who were forced out of work or otherwise suffered lost income during the past year. Our approach should be the complete opposite of this bill, with our state doing all it can to lessen the burden on workers instead of throwing more obstacles in their path to financial recovery.”
Urdahl said the tax package would create a new income tax tier and give Minnesota the second-highest income tax rate in the country, directly impacting many workers that have been hit hard during the pandemic.
In addition, Urdahl said some business owners would suffer from a cap placed on emergency Paycheck Protection Program (PPP) loans they received from the federal government to help pay for employee wages or rent. Congress made these loans free from federal taxation, but not all Minnesota business owners would see the same forgiveness under the House Democrat bill.
“There are so many problems with this bill the House majority didn’t even provide full support and it passed by the narrowest of margins, 68-66,” Urdahl said. “That in itself is a pretty good indicator massive changes are needed before the bill comes back to the House for a vote on final approval. And, remember, the $1 billion tax increase in this bill is on top of the $1.6 billion increase to transportation taxes and fees the House majority proposes over the next four years.”
Urdahl said he remains optimistic significant improvements will be made on the tax bill (H.F. 991) as a conference committee works iron out differences between House and Senate tax proposals.
“It is important to remember that we are in the initial stages of budget negotiations and lot can happen between now and our May 17 adjournment,” Urdahl said. “The Senate’s approach to taxes is in stark contrast to the House’s. While there will need to be some give and take, I remain hopeful we will arrive at a budget solution that warrants bipartisan support. For that to happen, the House majority must acknowledge the realities of today and re-think its push to raise taxes.”