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Danielle Killey, Forum News Service, Published April 23 2013

Minnesota Senate plan increases income tax for couples making $140,000 or more

ST. PAUL – Married Minnesota couples who make about $140,000 or more taxable income would pay higher income taxes under a tax plan offered by senators today.

The proposal does not create a new income tax bracket, like the governor’s and House’s proposals, but would increase the top tax rate from 7.85 percent to 9.4 percent. That would bring in about $1.2 billion.

“This is the bill that is going to balance the state budget,” Tax Committee Chairman Sen. Rod Skoe, DFL-Clearbrook, said.

The plan would reduce the state sales tax to 5.7 percent from 6.87 percent and tax more items and services, such as clothing. Skoe also proposed increasing the cigarette tax to 94 cents per pack.

Republicans said the bill would hurt middle class Minnesotans.

“This is not a tax on the wealthy, it’s a tax on everybody,” Senate Minority Leader David Hann, R-Eden Prairie, said.

House Majority Leader Erin Murphy, DFL-St. Paul, said there is not much support for the Senate tax bill among House Democrats.

“There is a lot of support for the proposal we put forth,” she said, which she said was drawn up after talking to Minnesotans.

The House bill would create a fourth tier rate of 8.49 percent for couples making more than $400,000 a year in taxable income and add a temporary surcharge on couples’ income more than $500,000.

Skoe said he wants the committee to vote on the bill Wednesday, the same day the full House is expected to debate its tax plan.