MINNEAPOLIS (WCCO) — Republican leaders in Washington say they plan to reveal details of their tax reform bill in the next week. But they’ve already made public parts of it that will affect every taxpayer — including winners and losers right here in Minnesota.
What makes the Republican tax reform bill unusual is this: There is no tax bill, so far.
Republican leaders and the president are meeting secretly. All we have seen is an eight-page “Unified Framework For Fixing Our Broken Tax Code.” President Donald Trump is calling it the beginning of a long process.
“The people of this country want tax cuts,” he said.
Despite a lack of details, the White House is promising a $4,000 raise for the average family.
So, here’s what we know so far:
The proposal cuts the number of tax brackets from seven to three.
The plan doubles the standard deduction for a married couple: up to $24,000, and corporations are big winners.
In Minnesota, if the corporate tax rate drops from 35 percent to 20 percent, a Star Tribune analysis found the state’s Top 50 companies — like 3M, Medtronic, Target and others — could see total tax savings of $3.65 billion dollars.
Economists are skeptical that business tax cuts will trickle down to Minnesota families, saying $4,000 tax break from the White House is wishful thinking. It could happen in three to five years, economists say, but the benefit is more likely to be hundreds of dollars, not thousands.
Here’s where Minnesota families might feel it most:
To pay for tax cuts, other taxes will go up, and some tax deductions could disappear. Your home mortgage and charitable giving deductions, but congressional leaders say they’re eyeballing new 401(k) taxes, despite the president’s promises:
The state and local tax deduction is also likely dead — a tax benefit used by tens of thousands of Minnesotans. State and local deductions let you write off your property taxes an your state and local income taxes. On average, eliminating it raises your tax bill by $2,100 each year.
That’s Reality Check.
White House: “Unified Framework For Fixing Our Broken Tax Code”
Washington Post: The Average American Family Will Het $4,000 From Tax Cuts, Trump Team Claims
FactCheck.org: Trump’s Dubious $4,000 Claim
NPR: Why You Shouldn’t Count On The Promised $4,000 ‘Raise’ From GOP Tax Plan
New York Times: Trump Proposes the Most Sweeping Tax Overhaul in Decades
Tax Policy Center: The State and Local Tax Deduction Doesn’t Benefit Only Blue State Households
CNN: Millions In The Middle Class Will Feel It If GOP Kills This Tax Break
New York Times: “Six Charts To Explain The Republican Tax Plan”
The Balance: “Trump’s Tax Plan And How It Would Affect You”
Star Tribune: “Tax Reform Could Add Up To Billions For Minnesota’s Biggest Companies”
MinnPost: D.C. Republicans’ Big Tax Overhaul Hinges On Killing One Of Minnesota’s Favorite Deductions