ST. PAUL, Minn. (AP) — A proposal from Minnesota Republicans for a series of income tax cuts drew a rebuke Monday from Democratic Gov. Mark Dayton, who cast it as a giveaway for those with the biggest salaries.

The House GOP plan unveiled over the weekend would lower two of Minnesota’s three tax rates by a fraction of a percent each, phasing the reductions in over three years. Because those in the top tax bracket pay a portion of their taxes based on the lower two rates, they would see tax cuts, too.

A Revenue Department analysis suggests the average filer would see a tax cut of $64 in the first year. But those with incomes above $100,000 would see burdens fall by $100 to $200. That’s consistent with a separate analysis by House researchers.

“It bothers me the Republicans would present this as a tax cut targeted for lower and middle-income families when the facts are the opposite that the greatest benefit goes to upper-income Minnesota families,” Dayton said. “Once again they just have shown their values, their priorities are to benefit the richest Minnesotans at the expense of the rest of Minnesota.”

He also questioned whether the tax cut was feasible given the state’s $5 billion projected deficit. Every tax dollar cut must be offset by additional state spending cuts.

The tax cut is part of a broader bill that would also reduce commercial and industrial property taxes, slice the amount of tax credits available to people in rental housing and pare back state aid to some cities. The bill is headed for a committee vote by the end of the week.

Minnesota reaps about $8 billion annually in income taxes after refunds are paid out. The proposed income tax cuts would add up to $221 million over the next two years and climb to $786 million in the two years after that.

Under the House plan, the bottom two rates would fall in stages. The lowest rate would go from 5.35 percent now to 4.75 percent by 2014. The middle rate would drop from a current 7.05 percent to 6.75 percent.

Depending on their income, taxpayers could see a first-year break of as little as $3 to as much as $206, according to the Revenue Department analysis. Once fully implemented, the range of taxpayer savings falls between $11 and $481.

House Majority Leader Matt Dean, R-Dellwood, didn’t back away from the GOP description of the tax cut.

“Clearly the intent is to help folks with lower and middle income,” Dean said. “If it also associatedly helps (upper-income filers) I don’t know that I would criticize the plan because of that.”

Minnesota’s top bracket — 7.85 percent — doesn’t kick in until taxable income reaches about $75,000 for single filers and about $132,000 for married couples. The lower rates apply on income below those thresholds.

As part of his budget plan, Dayton has proposed adding a new fourth bracket of 10.95 percent for people toward the top of the income ladder. Republican leaders have ruled out increases to the income tax.

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

Comments (18)
  1. jerry says:

    and then they will want to go after teachers and other public employees to have them foot the bill like Wisc I would guess……….wonder how many regret voting for the GOP now………..these people are sad and the bottom 95% better wake up sooooooon…………pretty soon MN will be talked about WITH Mississippi, Louisanna, Alabama, and Carolina………..just because the Mississippi starts in Mn doesn’t mean we have to be like the state of Mississippi

  2. tired taxpayer says:

    The people at the “bottom” as you say don’t hardly pay any taxes now. We “higher income” individuals have been footing the bill for the rest of you for long enough! By the way, who’s money do you think pays the public employees . . the Easter bunny’s? Wake up! The pot is dry!

  3. Chuck Hernandez says:

    Why dosen’t someone Google the Argentine government and find out what happend to thier country . One of the richest countries in the world and now is impoverished becouse of public handouts and taxing the middle class and the rich to the point of near extinction. Wake up America we are on our way to the same situation.

    1. Jim says:

      The decline of Argentina is a complex issue. To blame it completely on “taxing the middle class and the rich” is ignorant. There are lots of countries that have higher taxes and are thriving.

      1. Mel says:

        Name one country, Jim. And then please back up your statement with proof.

      2. denmark says:

        DENMARK – it’s public information

        What country has the highest tax rate?

        Denmark has the highest income tax rate, with its top-taxed citizens paying 68% of their hard-earned crowns. The basic tax rate begins at 42%.

  4. John says:

    Why do republicans insist on helping the richest of the rich maintain their uber wealth?

    The richest 400 people in America own as much as the bottom 150 million people combined!

    The top 1% wealthy have a total 3.6 TRILLION last year, this year it has increased to 4.5 TRILLION.

    Why are republicans such meatheads when it comes to taxing the rich! They are not creating any jobs…

    1. karen says:

      Maybe because it is their money you jughead.

      1. John says:

        Well Karen, I can tell you spend a lot of time on your knees, jaws open for service!! LOL!

  5. BUZZCUT says:

    Crazy idea…if the state doesn’t need your money do what Governor Ventura did…

    Send everyone a check…that way you are more inclined to spend the money on local goods & services. This will give you more bang for the buck as residents will more likely to help the economy. Aren’t we in an economic crisis? The media hype would really this idea.

    A few bucks here and there, we will not notice or spend. But, a check from the state. Well, any check will spend if we are told to spend money on your favorite local business.

    In the current state, it turns into a bride for political votes.

    SHAME SHAME SHAME

    1. BUZZCUT says:

      Crazy idea…if the state doesn’t need your money do what Governor Ventura did…

      Send everyone a check…that way you are more inclined to spend the money on local goods & services. This will give you more bang for the buck as residents will more likely to help the economy. Aren’t we in an economic crisis? The media hype would really (help) this idea.

      A few bucks here and there, we will not notice or spend. But, a check from the state. Well, any check (we) will spend if we are told to spend money on your favorite local business.

      In the current state, it turns into a (bribe) for political votes.

      SHAME SHAME SHAME

  6. Look at all the stupidity!!! says:

    It is funny that in the last couple of stories that had the name Dayton in them we have sooooooo many people coming on and saying things like “stop spending what we don’t have” and “Dems are spending all the money this state has”, yet when a story like this (that has to do with spending more money) the same people are saying we should do this. How is it that the repubs that are openly opposed to spending are ok with this???? Ironic when you look at it. So the rest of us can assume that pretty much all the repubs are flip flopping on all the issues. Amazing that they cannot see this though and keep crying about spending.

  7. sam hill says:

    this really seems like an IQ test. to say this a givaway to the rich is absurd. they are cutting the two lower rates, which everyone pay, and not the upper rate, which only the rich pay.

  8. Cache says:

    We are tired of fools like Dayton and other bleeding hearts who continuely steal taxpayers money to give to others. Ideological budget battles between GOP and Dems mask the real battle erupting inMinnesota– the battle between the makers and the takers. Entrepreneurs and other workers, the makers, are growing tired of government’s rapacious hand in their financial pocket and they are becoming more aggressive and more outspoken in their protests. Dems should expect this trend to continue.

    The recent Bureau of Labor Statistics report citing systemic high unemployment for the past two years shows that of Minnesotans, only 47% of adults have full-time jobs. It’s a mind-boggling statistic: 53%– or a majority — of adults do not work. The repercussions for our state are dire, despite the Dems proclaiming the recent Labor report as good news.

    Meanwhile Dems are relying on an elaborate Ponzi-scheme of increased taxes and hide-the-budget-pickle to justify spending increases on a bevy of social re-engineering programs while Dayton continues to champion an expansion of the regulatory straight jacket hobbling makers.

    1. Look at all the stupidity!!! says:

      Cache
      47% of adults have full-time jobs. It’s a mind-boggling statistic: 53%– or a majority — of adults do not work.
      I want to know where you got these stats as this makes no sense. So you are saying that either you have a full time job or are unemployed? Might want to look at where you are getting these stats cause they may be as made up as the rest of what you say. Just another example of someone making things up and trying to cover them.
      53% of all statistics are made up on the spot. 72% of those are incorrect and the person knows it 100% of the time. See I can do it too.

  9. kj1627 says:

    For those of you who think that the “rich” only pay is preposterous… unless you know then maybe you should not speak up. Married with children we have paid in for several years with a combined income of less than 70, 000 for the most part and again last year with less than 65, 000. Divide that by 12, take taxes out, pay for medical and then house payment, vehicle gas, heating at more than 200.00 a month in the winter, then add a house phone (NO CELL PHONES< THEY ARE A LUXURY) and then add type 1 diabetes to the picture and multiply that by 3, yes 3! It costs money to have an illness you did not bring on by yourself, and yes 2 of my children have it also.

    Now take all of that and don't forget car insurance, water bill, electric bill, garbage bill, groceries, necessities for hygiene, clearance clothing because it is against the law to not wear them and any other medications needed as someone gets ill, particularly with diabetes.

    Take the diabetes away and the cost of living has barely gone up for middle and lower class people since the 80's. Yet EVERYTHING has gone up in price. My father made 40,000 in the 80's and it was considered middle class then. 40, 000 can barely buy you a house or pay your bills today.

    And yes, the rich ARE the ones that do the hiring and they still aren't! Unemployment is lowering, but that doesn't count those that never found a job, and I am sorry but your McDonands doesn't pay the bills. Maybe stop sending the jobs overeas? We keep getting more and more people coming here to live from other countries and if it's leagal that is great, but the jobs keep getting sent where they are coming from. Do they work for lower wages, yes. AMERICANS CAN"T AFFORD TO, THE COST OF LIVING IS TOO HIGH! So stop complaining when someone tells you don't want to work at MCDonalds. It may be a "job", but it is not a living. And I really don't want to hear about haing an education and qualifications because many, many of these unemployed people have excellent experience and great educations.

    Does anyone read the Star Tribune anymore? A few weeks ago they had a front page article that said 41% of Minnesota homeowners are behind on their mortgage. That is HUGE! Can you really keep your home if you no longer have a job? Can you really pay for your house payment if you work at McDonalds? Can you even pay rent while doing either of those?

    The comment regarding where all of the wealth is is true! Even the "middle upper class" has no money compared to the richest americans. The top 20% has more than 90% of americas money. Yes, 20% that means 80% of america has less than 10% of americas money. Here is the link http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

    What the rich fail to realize is that if the rest of us has no money then we can't buy their things like oil, food, movies, cars, insurance and the list goes on and on, but I think you get the point.

    I also think that if we can bail out the rich so that they can get their bonuses and pay their cell phone bills among other bills and go on trips that the least the government can do for AND you is help us out in rough times too. That was OUR money they bailed them out with. I think the favor should be returned to the rest of america. If they would have given every single family that money every one of us could have owned a house… imagine that.

  10. Darren says:

    KJ1627 brings up many good points. But it was their choice to have kids, it was their choice to be married, it was their choice to live whree they live. I wanted to get married just to save on all of the tax benefits. But because I didn’t make enough financially for my own family I decided to remain single. Wow, I took responsibility and I pay a higher tax being single. How is that fair? But I don’t complain. I go to my 2 jobs and work 70 hours a week too pay my bills and taxes.

  11. Victim Du Jour says:

    Chasing rich people out of the state with taxes won’t do much for jobs.

    The government is suppose to be making everyone feel like we are all contributing the same.