WASHINGTON — President Donald Trump’s push for tax reform is causing concern for some Minnesota lawmakers serving in the U.S. House of Representatives.
The Democratic delegation, comprised of Reps. Betty McCollum, Rick Nolan, Tim Walz, Collin Peterson, and Keith Ellison sent a letter to Speaker Paul Ryan and Rep. Kevin Brady, Chairman of the House Committee on Ways and Means on Monday.
The letter asked Brady and Paul to reject a proposal by the Trump administration to eliminate the State and Local Tax (SALT) deductions.
“Of the 948,000 Minnesota households that itemized their federal deductions in 2015, 99.8% percent claimed a deduction for state and local taxes, or 35 percent of Minnesota’s filing households,” the letter states. “The average SALT benefit in our state was $12,954 and these benefits are shared among constituents in all income levels. In 2015, 87 percent of Minnesota taxpayers who utilized the SALT deduction had household incomes below $200,000.”
According to Forbes, the SALT deduction would impact high-tax states the most, with high-income taxpayers feeling the greatest burden due to the elimination of that particular tax break.
For Minnesota, a state ranked fifth in terms of total state tax burden by Wallethub, this means the loss of the deduction could be a wake-up call come tax season for Minnesotans living in high-tax counties such as Hennepin and Carver counties.
However, Rep. Jason Lewis disagrees with the notion that discarding the SALT tax deduction would be unfair for individual taxpayers.
“Doubling the standard deduction to $24,000 and compressing the tax rates (including eliminating the bottom rate) reduces the need to itemize in the first place—a key component of tax fairness and simplification,” Lewis told Alpha News in a statement. “That saves you time and money preparing your returns, thus providing significant tax relief for families in the 2nd district. By reducing small business tax rates 40%, this plan brings much-needed economic growth, and as a result, rising incomes which will benefit everybody.”
While the Democratic delegation from Minnesota concludes the elimination of the SALT deductions would harm Minnesota families, they expressed their desire to work with House Republicans in achieving a simple and fair tax code.