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Think tank speakers call on Minnesota to offset tax cuts with $9.3 billion surplus

(The Center Square) – Speakers at the Center for the American Experiment rally Saturday demanded Minnesota’s governor and legislators return the state’s $9.3 billion surplus to taxpayers.

“The message for policymakers today on the surplus is clear – no more spending,” CAE President John Hinderaker told The Center Square in a statement Monday. “Between the federal COVID money and now this overcollection of taxes, Minnesotans understand it’s time for fiscal restraint at the Capitol in 2022.”

CAE Communications Director Bill Walsh told The Center Square in an emailed statement Monday that speakers pressured Walz to cut taxes permanently instead of providing a one-time rebate. Hinderaker and radio talk show hosts Jason Lewis, Jon Justice, Scott Hennen and Dan “Ox” Ochsner spoke at the rally, which was held at the Minnesota Capitol Rotunda.

Walsh said in his commentary on Walz’s State of the State Speech Sunday that the governor may have talked about tax cuts in the speech because hundreds of Minnesotans attended the organization’s rally.

“He reiterated his call for one-time rebates but also said he was open to permanent middle class tax cuts,” Walsh said in his coverage of the speech. “Unfortunately, he continues to divide Minnesotans by class insisting that ‘massive corporations and the wealthiest’ don’t need a tax cut. By massive corporations, does he mean Target, 3M, Medtronic, Cargill and The Mayo Clinic? The companies that employ thousands of Minnesotans?”

The CAE released a report in February titled “It’s our surplus, give it back,” the same title given to the rally. The report called for political leaders to use the state’s multibillion-dollar surplus to provide permanent tax cuts for “ordinary, hardworking Minnesotans.”

The report said the surplus shouldn’t be used to increase spending because government spending is high compared with other states. The CAE asserts high government spending hasn’t solved the state’s problems, including racial disparities in graduation rates and unemployment rates.

In the report, authors urged Minnesota to simplify and reduce corporate taxes and individual income taxes. They also recommended the state conform to the federal depletion schedule, abolish the Alternative Minimum Tax for corporations and for individuals, eliminate the marriage tax penalty and the estate tax, and cut tax rates. Corporate income tax rates should be cut one percentage point, and personal income tax rates should decrease by either one or two percentage points.

“Our state needs to change direction and the largest budget surplus in Minnesota’s state history represents a golden opportunity to do it,” the report said. “The state government has the revenue to undertake reforms to reduce tax complexity resulting in an outsized benefit compared to revenue costs.”

With the cuts, Minnesota would still have the eighth-highest corporate tax rate and the tenth-highest tax rate for top rate (with the two percentage point cut), it said.

“It is a measure of how highly taxed Minnesotans are that such apparently bold measures would still leave us so relatively highly taxed,” the report said. “These steps would not be the end of our journey to tax competitiveness, but they would represent an encouraging start.”

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