With Tax Regressivity Worsening, Chair of Minnesota's House Tax Committee Proposes Progressive, Simplifying Changes

P>Minnesota's Department of Revenue released a study last week showing that the regressivity of the state's tax system has grown significantly in recent years. On the heels of this study comes a proposal from the Chairwoman of the House Tax Committee seeking to clean up the tax code by eliminating a slew of tax expenditures in order to fund more progressive changes to the state's tax system.

You can find more details on the Minnesota Budget Project's blog, but the general idea is to replace a variety of tax breaks that are either regressive or too narrowly targeted with three simplifying tax credits, including credits for mortgage interest, charitable contributions, and lower-income families with children. Tax rates on the lower two income tax brackets would also be reduced.

On the business side, the proposal seeks to end a variety of ill-conceived business tax breaks, though unfortunately it does seek to replace them with other ill-advised measures, such as single sales factor and equipment expensing.