Rep. Erik Paulsen sure is busy telling everyone how great he thinks the tax reform act is. Erik, if the plans is so fantastic why don’t you plan an in-person town hall and have a conversation with your constituents so you can hear what we think?
We all understand that the tax reform act will reduce taxes overall, but it appears to be a gift to the wealthiest individuals and corporations, not working families. Home-owning Minnesotans, especially in cities like Eden Prairie, will see limited benefit or even tax increases while narrow interests, like real estate businesses will have windfall. Republicans used to abhor government picking winners and losers. No more.
Rep. Paulsen quotes average tax savings and increased take-home pay but doesn’t provide any context for where this information comes from. Is this a Minnesota family? What gross income was used? How many children under 17 do they have? Do they own a house, have a mortgage, pay property taxes and give to charities? Did this savings include Minnesota income tax? Are the tax-withholding levels commensurate with the tax this person will owe?
Having just filled out my taxes for 2017, I checked to see what the impact would be using the 2018 tax law assuming the same inputs as this year. Being a wage-earning homeowner, the new $10,000 cap on state an local deductions dramatically truncated my itemized deductions. Combined with mortgage interest and charity giving, the itemized deductions are of minimal benefit compared to the new standard deduction. The old tax law had $4,050 per person of individual exemptions, which was eliminated with the new law. So that effectively raised my family’s taxable income by $12,150. Though the new tax rates are marginally lower, they were more than offset by the loss of itemized deductions and the elimination of individual exemptions. The net result was we would owe nearly $900 more in federal income tax with the 2018 rules. Because Minnesota currently uses he federal tax calculation to determine taxable income, we would also owe an additional $800 in state income taxes.
Perhaps it’s lost on Rep. Paulsen that a large percentage of Eden Prairie households are in a similar situation. I, for one, am shocked at how blatantly the tax burden was transferred from corporations and the wealthy to middle and upper middle class Minnesotans. There’s still another battle for those of us affected by this law and this is whether Minnesota will align with the federal changes or not. Alignment will mean a tax increase for many. Keeping the Minnesota’s tax calculation separate will result in more paperwork but I’ll gladly fill out another form to save $800. Hopefully our state representatives will be more willing to listen to voters than Congress and find a way not to further increase our taxes.
Gary Simons, Eden Prairie
Eden Prairie News, April 5, 2018