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GOP says House tax plan hurts Minnesota

ST. PAUL - Minnesota House Democrats say it is time to balance the state budget and make new investments, but Republicans argue the tax plan they are expected to vote on today does so at the expense of taxpayers.

ST. PAUL - Minnesota House Democrats say it is time to balance the state budget and make new investments, but Republicans argue the tax plan they are expected to vote on today does so at the expense of taxpayers.

"We have a massive, job-killing tax increase on all Minnesotans," said Rep. Greg Davids, R-Preston, a former tax committee chairman. "There is no reason to increase taxes."

House Speaker Paul Thissen, DFL-Minneapolis, said the tax bill will help the state fill in a projected $627 million deficit for the next two years, pay back money owed to schools and make new investments, such as in education.

"This tax bill is what allows us to do those things," Thissen said.

Davids raised concerns about the income tax and surcharge plans in the tax bill.

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The House bill would create a fourth tier rate of 8.49 percent for couples making more than $400,000 a year in taxable income and add a temporary surcharge on couples' income more than $500,000. The surcharge would last up to two years.

"This is a tax on success," Davids said.

Democrat leaders said the changes only will impact top income earners and about 3.3 percent of businesses.

"We think this is a really fair approach," bill author Rep. Ann Lenczewski, DFL-Bloomington, said.

She said Minnesotans not in the top tax rates will not see increases and might see slight decreases in income taxes.

Lenczewski said the proposal also offers "dramatic and permanent property tax relief."

Many lawmakers have raised concerns about a wholesale alcohol tax proposed.

"It's a very modest 7-cent tax," Lenczewski said, noting that would be the impact per drink.

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House members plan to debate the tax bill today.

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