Thursday, April 25th, 2024 Church Directory

End Tax on Social Security

(Editor’s Note: The following column was submitted by Rep. Shane Mekeland.)

I have authored legislation to fully repeal the state tax on Social Security, providing some breathing room for seniors – particularly those on fixed incomes.

Minnesota is one of just 12 states that still tax social security benefits. With a $17.6 billion state budget surplus, and price increases straining family budgets, the time is right for a full repeal.

With a state surplus of around $18 billion, tax relief is a flat-out expectation for Minnesotans this session, and deservedly so. That being the case, the first thing we should do is eliminate the state tax on Social Security to stop the injustice of taxing this income twice. It’s not only the right thing to do, but it would help at least partially offset the rampant price increases people are facing in today’s economy.

Minnesota’s tax structure is unfriendly to retirees. Reports indicate Minnesota loses vastly more domestic residents to other states than it gains. Business and personal finance publisher Kiplinger lists Minnesota among its “not tax-friendly” states for retirees, indicating, “The North Star State offers cold comfort on the tax front to retirees.”

A full Social Security tax repeal would benefit an estimated 473,000 people with an average tax savings of $1,276. In contrast, Gov. Tim Walz’s budget proposal doesn’t fully repeal the state Social Security tax, with only 43% of Minnesotans receiving some form of relief – on average, $278 per household.

I acknowledge cold winters play a role in Minnesota’s migration patterns, which simply underscores the importance of improving our state in areas the Legislature actually can control.

There’s a lot we cannot control, but our state’s tax structure is one of those things we can do something about and it needs improving. In the past, we’ve heard excuses from the majority about how eliminating the tax on Social Security is too expensive – which is completely backward. That excuse goes out the window with a structural tax imbalance that even the governor has said needs to be fixed.

Democrats signaled last fall they were all-in for a repeal of the Social Security tax. Now, more than a month in to the 2023 session, the House majority has not acted upon bills related to this subject.