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Committee Hears Proposal to Create Fifth Income‑tax Tier, Raise Corporate Rate; A2 Amendment Adopted and Bill Laid Over
Summary
Senate File 2,290 would add a new top individual income‑tax bracket and raise the corporate franchise tax; the committee adopted an author's A2 amendment and laid the bill over as amended after extensive pro and con testimony.
Senator McEwen introduced Senate File 2,290 as amended, a proposal to create a fifth income‑tax tier for the state's highest earners and to raise the corporate franchise tax rate. "This bill would increase the individual income tax for the very highest earners in Minnesota, by creating a fifth tier," McEwen said. The adopted A2 amendment also raises the corporate franchise tax rate to 12.45% to align it with the proposed top income tax tier.
Scope and fiscal effect: the author and backers said the proposal would raise roughly $2.36 billion in the upcoming biennium; Senator McEwen said the revenue increase "would nearly solve our budgetary imbalance" and would affect a small share of returns: roughly 2.7% of filers. The bill adds a 2.6 percentage‑point increase for top earners; the bill text as discussed would start the top tier at $250,000 for individual…
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