By House Minority Leader Rep. Lisa Demuth, District 13A
Last fall, candidates from both parties campaigned on using Minnesota’s historic budget surplus to deliver tax relief for Minnesota families. Minnesotans were promised that we would finally see an end to the unfair tax on social security. Governor Walz campaigned on giving back the surplus in the form of rebate checks.
Unfortunately, with just weeks to go in the 2023 session, tax relief has been an afterthought for Democrats who control every lever of government. Despite a $19 billion budget surplus, Democrats are pushing for billions of dollars in tax increases to help sustain a record amount of new government spending.
Their tax hikes include more than $3.6 billion in the transportation area alone — a new sales tax for the seven county Metro area, a delivery fee for your Amazon and Doordash orders, an increase to your license tab fees, and more.
There’s a separate Metro sales tax hike in their Housing budget which, combined with the transportation sales tax hike, would give many Metro area communities among the highest sales tax rates in the country.
The Democrats’ paid leave plan would create an enormous bureaucracy of 400 government workers paid for with $2.9 billion in new payroll taxes that will hit virtually every worker in the state starting in 2025.
The House Democrats' omnibus tax bill itself raises taxes by $2.2 billion the next four years, including a new fifth-tier income tax. Meanwhile, it does not fully eliminate the state tax on social security.
Where would these billions in tax hikes go? Funding more government. The Democrat budget raises spending by a massive 40% compared to the previous budget. In what world is this sustainable? Minnesota families couldn’t begin to increase their own spending by 40% in a single year, but that’s exactly what Democrats are doing this year.
Their budget includes pay raises for politicians, massive increases for government agencies, a new wasteful train line to Duluth, and more.
Governor Walz, Lieutenant Governor Flanagan, and other statewide elected officials would see substantial pay raises on top of their already generous salaries and benefits. While Minnesotans settle for a 2-3% increase in an era of 7% inflation, Democrats are happy to give politicians a 17% pay raise over the next two years. The budget also pays for the $17,000/month lease for the Governor while the Governor’s Residence is under construction.
Many state agencies, despite already receiving inflationary increases, are seeing double-digit operating increases and hiring of hundreds of new government employees. These permanent spending increases will be hard to sustain in the event of an economic downturn and once again prioritize state government over the tax relief that was promised to Minnesotans.
Earlier this year, House and Senate Republicans unveiled our $13 billion “Give It Back” Tax Plan, which would have ended the tax on social security benefits, permanently reduced income tax rates, helped Minnesotans struggling with soaring property taxes, and included one-time rebate checks of $1250 per person or $2500 per family.
This is the direction we should be going; a historic surplus calls for historic tax relief. Unfortunately for Minnesotans and their pocketbooks, Democrats continue to push an expensive, unsustainable, and unaffordable vision that prioritizes government over giving the surplus back to the families who helped generate it.
In the final weeks of session, Republicans will be standing up for Minnesota taxpayers and pushing Democrats to fulfill their campaign promise and deliver record-setting tax relief to families.
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