Republicans are proposing bigger checks to Minnesotans, is that a good idea?
Minnesota legislators want to give some of the historic tax surpluses back to Minnesotans, in one way or another. One way that legislators want to do this is by giving direct payments to taxpayers.
Governor Tim Walz, for example, plans in his budget proposal to give $1,000 checks to single filers earning less than $75,000, and $2,000 to married couples filing jointly earning less than $150,000. Parents will get an additional $200 for each dependent, up to three, with a maximum payment of $2,600.
However, other proposals — from the Republican side — are more generous.
Senate Bill SF 1535 and its House companion, HF 1548, would triple what Gov. Walz is proposing and expand who is eligible for the checks.
Single filers with incomes up to $166,000 will be eligible for a $3,000 check. Married couples filing jointly and earning less than $276,000 will get $6,000.
Married taxpayers filing separately are also eligible for a $3,000 check, with an income cut-off of $138,000. And taxpayers filing as Head of Household are eligible for $6,000, with a $220,000 income cut-off.
This proposal will give nearly $8 billion back to Minnesotans in the form of checks — double what Walz is proposing in his budget.
Under another proposal — Bill SF 1499 — taxpayers, regardless of their income level, will receive $4,4000 for a married couple filing jointly, and $2,200 for all other filers.
How big should the checks be?
Minnesotans are overtaxed, so it is only logical that they get their money back. However, direct payments have some drawbacks. For one, they do nothing to relieve Minnesotans of the state’s burdensome taxes. Temporary checks also only boost demand without doing much for supply, which could be inflationary.
If Minnesota lawmakers are serious about giving Minnesotans a break, they ought to seriously consider some of the laws that have been introduced to cut taxes — bills like SF 1162, HF 1249, and HF 515, HF 977, all of which would cut rates by 1 percentage point across the board.
With numerous other states cutting their income tax rates, Minnesota is becoming less competitive by the day. Direct payments, if not combined with tax cuts, will do nothing to improve our economy.
That being said, it is highly likely that any money not given back to taxpayers will be spent on other programs. And bigger checks to all Minnesota taxpayers are certainly better than more government spending.