ST. PAUL – State Rep. Paul Anderson, R-Starbuck, has authored legislation to fully repeal the state tax on Social Security, providing some breathing room for seniors – particularly those on fixed incomes.
Anderson said 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, Anderson said the time is right for a full repeal. He has co-authored House File Nos. 557, 153 and 136 to make it happen.
“It seems like everyone I talk with supports eliminating this tax that’s unnecessary and hurts our seniors,” Anderson said. “With such a large surplus, we should at the very least be able to end this double tax and get Minnesota in line with most other states that do not tax Social Security.”
A full Social Security tax repeal would benefit an estimated 473,000 people with an average tax savings of $1,276, Anderson said. 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.
Minnesota’s tax structure is unfriendly to retirees, Anderson said. 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.”
Anderson acknowledged cold winters play a role in Minnesota’s migration patterns, which he said underscores the importance of improving our state in areas the Legislature actually can control.
“We can’t do anything about the weather, but Minnesota’s tax structure certainly is at least a factor in retirees deciding to relocate and that’s something we can change,” Anderson said. “I hope we can work together to get this done and take care of our seniors this session.”
Democrats, Anderson said, signaled they were all-in for a repeal of the Social Security tax last fall. More than a month in to the 2023 session, bills related to this subject have failed to gain traction in the House.
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