Minnesota’s Progressive-Democratic (formally, Minnesota Democratic–Farmer–Labor) governor, Tim Walz, is proposing a “tax cut” of up to $2,600 for Minnesotans. His plan calls for income tax credits, paid in the form of checks to recipients rather than reductions in taxes owed at tax filing time, for Minnesotans. The checks would be for
$2,000 for families with incomes below $150,000, and $1,000 for single filers making less than $75,000. They would be exempt from federal taxes. Taxpayers could also get an additional $200 for each dependent—up to three.
But only for some Minnesotans. Those of whom Walz and his government cronies disapprove, those earning more than those income caps would get…nothing. They’re the ones who will be paying those checks with their tax remittals.
If Walz, et al., were truly interested in a tax cut, those wonders would push for an across the board income tax rate reduction.
But, no—leave it to a Progressive-Democratic Party politician to masquerade an income redistribution scheme as a tax cut.
I’m not sure a state law can exempt an income source from federal tax. They may be intending to make this distribution fit an existing federal exemption – but evaluating that is not their call.
If the checks are made as State welfare payments–which would be consistent with the income limits–the State might be able to have them be exempt from Federal taxes.
Eric Hines