Today, I want to ask each of you to make 3 phone calls. In the next few minutes I will explain why and to who.
It matters not whether you are Democrat, Independent or Republican. I will tell you why it is urgent and assure you that it is not too late nor pointless. My Goal is to get each of you to help me “Hold the Salt.” Or perhaps better said, Save the Salt.
So what is SALT. State and Local Taxes, more specifically the exemption on federal taxes on the taxes we are already paying locally, and thereby avoiding Double Taxation.
As you know, Congress is trying to rewrite the tax code.
The current House Plan has many winners and losers. Some of the provisions, I like – others not so much. Personally, while I believe some corporate tax changes are needed, I see many things to dislike. But there is not time today to cover every detail.
But there is time to focus on one element that matters to Minnesotans and which we should ask our Representatives in Congress to advocate for us. And that is SALT.
Now before I go any further, let me assure you that our Representatives can advocate for us if they choose to do so. The bill, while formed in secrecy is now public and open for debate.
Changes can be and are being made to it. As recent as Monday, the House leadership accepted a major change and there is every reason to believe additional changes can and should be made. (The Ways and Means committee watered down a proposed excise tax on foreign affiliates of multinational companies, raising the cost of the package by 150 Billion in lost revenue.)
But in Minnesota there are only 3 people that matter. They can choose to help us, or not. They are Representatives Jason Lewis, Eric Paulson, and Tom Emmer.
The good news is that means you only have 3 people you need to call.
So what is the issue?
By and large, Minnesota gets screwed…. Again!
Lets look at 3 things
- What SALT removal does
- MN tax policy and why we are different than others like Wisconsin
- How MN does overall in the national tax policy mix.
Under current and likely future tax policy should this bill get passed in any where near its current framework about 30-35% of mostly above average income earners in Minnesota will still claim exemptions.
Why does this matter? Our more productive citizens will get a double whammy on income paid for state and local taxes, making it harder to recruit and retain top talent, and harder to maintain MN more progressive tax posture.
Starting in the early 1970’s Minnesota began a committed drive to reduce the burden of property taxes. Recognizing them as the most hated and regressive tax strategy. It started building a series of state aids to education and local governments aimed at equalizing support for poorer school districts and reducing local goverments reliance on the property tax. Some will remember Wendell Anderson appearing with a borrowed pike on the front of Time magazine. The Minnesota Miracle, the focus of the article celebrated that policy change. Since then, members of both parties have strengthen the effort, albeit always squabbling about the details.
Today, in contrast to Wisconsin, which has the nation’s highest property taxes for homes, Minnesota has among the lower. This high property tax level in Wisconsin, may be why Speaker Ryan of Wisconsin got a change made to the tax bill on SALT to exempt much of the property tax portion but not other SALT taxes. Good for Wisconsin, not so good for Minnesota.
Which is why we should not be afraid to ask Minnesota’s Representatives to stand up for us as well.
So why should Minnesota get special treatment? Consider this.
For every dollar Minnesota send the Feds in Income tax, we get the 2nd to the lowest return on a dollar for dollar basis. We are already a donor state. Only Delaware fairs worse.
The exclusion of the SALT deduction will only serve to perpetuate Minnesota’s plight as a taxpaying chump.
Now I do not begrudge sending Minnesota tax dollars where and when they are needed. For example, I fully support FEMA expenditures in Texas, Florida and Puerto Rico. I would point out though that when the weather gets bad in Minnesota, we call out the snow plows and pay for it ourselves. (Our winters and their cost in terms of roads is just one big reason we have higher taxes in Minnesota)
So fellow Minnesotans, heed the call, and do call. Our Representatives job is to represent Minnesota. They owe it to us to fight to protect our interests. And to those of you who lean Republican, do your guys a favor and let them know that this tax injustice is riling people up and that we will remember whether they supported Minnesota or just played dead within the Republican Caucus.
I hope each of you will take a few minutes today to make three quick calls. Just leave the recording or staffer a message that you are concerned that the elimination of SALT will hurt Minnesota businesses and people.
Call: Tom Emmer 6th District (202) 225-2331 Eric Paulson 3rd District (202) 225-2871 Jason Lewis 2nd District (202) 225-2271
Suggested Message: I am concerned that the loss of the SALT deduction will hurt Minnesota and its businesses. Please work to retain that deduction for Minnesota.