Last month, the Minnesota Budget Project released a short brief on Revenue-Raising Options to Help Close Minnesota’s Budget Deficit, which outlined a number of tax proposals likely to be discussed this session. The brief includes estimates of how much revenue each option would raise, and what the impact would be on tax fairness.
We have now updated these revenue-raising estimates to reflect the February 2009 Economic Forecast (many figures were revised downward, due to the worsened economy):
|
Summary of Revenue-Raising Options |
FY 2010-11 |
|
Create new income tax bracket: 9.7 percent rate for incomes above $250,000 |
$643 million |
|
Create new income tax bracket: 9 percent rate for incomes above $400,000 |
$309 million |
|
Enact a 10% income tax surcharge |
$1.5 billion |
|
Return income tax rates to 1998 levels |
$1.7 billion |
|
Return top income tax rate to 1998 level |
$329 million |
|
Eliminate business tax preferences |
$91 million |
|
Corporate tax throwback rule |
$38 million |
|
Raise business property taxes |
$83 million |
|
Eliminate sales tax exemption on clothing |
$672 million |
|
Eliminate many sales tax exemptions on goods and services |
$2.6 billion |
Our analysis doesn’t cover a few new proposals that have been in the news recently, such as taxing internet downloads of music and videos. So, I’ll be sure to blog on these proposals in the near future.
-Katherine Blauvelt
