Jim Schultz: It’s time to put working families first by cutting taxes

Just two years ago, Minnesota had a historic surplus of nearly $19 billion. Yet instead of using that windfall to deliver lasting relief to the taxpayers who helped create it, DFL legislators pushed through a massive spending spree and introduced a host of new taxes.

Today, our state faces a projected budget deficit of $5.9 billion, and working families are caught in the middle. If we fail to act, that deficit will be “fixed” by even more tax hikes, compounding the burden on Minnesotans who already pay some of the highest tax rates in the country. It’s time for our elected officials to put working families first by cutting taxes and rolling back the punitive increases that helped create this mess.

Minnesotans want lower taxes

Recent polling confirms what we already know: Minnesotans overwhelmingly want lower taxes. According to a KSTP/SurveyUSA poll, 25% of respondents named “lowering taxes” as the single most pressing issue for legislators—more than any other topic. Voters see right through the notion that Minnesota simply has a revenue problem. In reality, the issue is spending, fueled by a liberal willingness to use the record-high surplus to expand government programs rather than provide genuine tax relief.

A dire competitive climate

Not surprisingly, Minnesota ranks 44th overall on the 2025 State Tax Competitiveness Index, weighed down by our highly progressive income taxes, hefty sales taxes, and the nation’s second-highest corporate tax rate at 9.8%. These burdens disincentivize entrepreneurs from setting up shop in Minnesota, undercutting job creation and wage growth.

Unsurprisingly, a separate study placed Minnesota 49th out of 50 states for entrepreneurs, citing a drop in new business applications and high inflation as contributing factors. None of this should come as a surprise. When taxes rise, employers look elsewhere to invest, slowing our economic engine and making it harder for families to make ends meet.

Tax relief that helps everyone

Rather than doubling down on failed tax-and-spend policies, we must unlock Minnesota’s potential by offering substantial tax relief. Here are four immediate steps to spark our economic renewal:

1. Eliminate the first income tax bracket

Allowing the first $50,000 of income for married filers to be tax-free (currently taxed at 5.35%) would provide working families with annual savings of up to $2,500. Over time, that’s real money back in the pockets of everyday Minnesotans who need it most.

2. Lower the corporate tax rate

Reducing the corporate rate from 9.8% to 8.0% would move Minnesota out of the top tier of states with the highest business taxes. The result? More job openings, better wages, and a stronger economy powered by local entrepreneurship and investment.

3. Return future surpluses to taxpayers

House Republicans have introduced a plan for a constitutional amendment that would automatically return a portion of future budget surpluses to taxpayers, preventing lawmakers from repeating the mistakes made during the $19 billion surplus bonanza.

4. Fully eliminate the tax on Social Security benefits

It’s high time we ended Minnesota’s tax on Social Security benefits, allowing seniors to keep more of their hard-earned income and enjoy a secure retirement. Many liberal politicians promised this during campaign season—it’s time to deliver.

A call to action

This is more than just a policy debate; it’s about the future of our state and the ability of everyday Minnesotans to make ends meet. Higher taxes will only exacerbate the reality that a significant number of Minnesotans are heading to other states. We need to make it easier to live, work, and raise a family in Minnesota, and one good place to start is by lowering taxes for all.

Jim Schultz is President of the Minnesota Private Business Council and was the Republican nominee for Minnesota Attorney General in 2022. Follow: @JimForMn.