Gov. Walz Proposes New Tax Bracket For Wealthiest Minnesotans

TWIN CITIES, MN — Gov. Tim Walz is proposing a tax hike for the wealthiest Minnesotans to make up a $1.28 billion funding gap caused by the coronavirus pandemic. The tax increase is a part of the governor's so-called "COVID-19 recovery budget" introduced Tuesday.

Walz's proposed tax hike would apply to people with the following incomes:

• $1 million (as married, filing jointly).
• $750,000 (as the head of household).
• $500,000 (as single).

A total of 21,000 households would have an average tax increase of $8,072 per return under this proposal, the governor's office said.

"This additional revenue will help level the playing field and ensure all Minnesotans have a fair shot at economic recovery," the governor's office said in a statement.

"This is in contrast to Republican leaders who want to cut to the bone — and refuse to ensure that the wealthy and profitable corporations pay their fair share. These cuts would hurt vulnerable Minnesotans at a time when they need support the most, especially our seniors and children."

The governor also proposed the following:

• Tax foreign income when it is repatriated to the United States.
• Reinstate the state tax exclusion to $2.7 million for individuals.
• Impose a 4 percent tax on capital gains over $1 million for individuals, trusts and estates.
• Increase taxes on large profitable companies.

Sen. Paul Gazelka, who leads the Republican-controlled Minnesota Senate, criticized Walz's budget proposal, saying the government should tighten its budget instead of increasing taxes.

Gazelka argued that the state's budget reserve will make up the deficit.

The state of Minnesota requires lawmakers to balance the budget, which means the governor, Democratically-controlled House, and the Republican-controlled Senate must find common ground on state revenues and expenditures.