A new way to approach tax day — with celebration
Oliver Wendell Holmes: "Taxes are what we pay for a civilized society." Photo by Chip Somodevilla/Getty Images.
It’s a familiar refrain around this time of year: “Ugh, I need to finish my taxes!” Always with the “ugh.” If you haven’t uttered those words, you’ve likely heard someone else do so.
In fact, in a recent survey from WalletHub (bear with me — just take it for what it is), people said they’d be willing to take extreme steps just to avoid paying taxes: 39% of respondents say they would move to one of 16 countries that don’t have an income tax, 37% would get an “IRS” tattoo (?), and a whopping 23% of respondents would stop talking for six months.
Strange as those survey options may be, the results are not too surprising given that a negative story about taxes has intentionally eroded the understanding that we all benefit when we contribute to our collective well-being.
For decades, the primary messages around income taxes have disconnected them in the public mind from the array of public services we support when we click that digital button or seal that envelope: good neighborhood schools; clean water and air; national parks and recreational areas; infrastructure like broadband, bridges, and buses; and affordable health care.
This narrative is so ingrained that over a third of our neighbors say they would rather get “IRS” tattooed on their body rather than pay into our shared public services.
Minnesota is no different. Plenty of us are not as clear as we could be on why we pay our state income taxes each spring. The Minnesota Budget Project has spent 25 years arming everyday folks, advocates and decision-makers with research and information about tax policy with an aim to move further toward a Minnesota tax system that is fair and raises the revenues needed to sustainably fund the public services Minnesotans value and count on.
This legislative session, state policymakers are considering some exciting tax policies that respond to the real challenges faced by Minnesota’s kids, families, workers and communities. For example, creating a state Child Tax Credit would unleash the power of the tax code to fight child poverty. It would build on the momentum of the expanded federal CTC, which temporarily shrunk childhood poverty to historic lows in 2021 by focusing on those families who are most likely to be left out of our country’s prosperity, including the lowest-income families, children of color, and children living in rural areas.
But unfortunately, some are calling for billions of dollars in poorly targeted tax cuts that would do little for everyday Minnesotans, and instead funnel resources away from public services we all benefit from. One high-profile example would replace our current targeted approach to Social Security income tax exemptions with an unlimited exemption.
This proposal would do little to help the seniors struggling most to make ends meet, but instead would provide the largest tax cuts to high-income seniors. Another troubling aspect is that the cost of these tax cuts would grow from $604 million in fiscal year 2024 to $777 million in fiscal year 2027. It would erode state revenues and threaten the public services seniors rely on, whether those are community-based services to help them to stay in their homes, transit services to get to the doctor or shopping, or high-quality nursing home care.
Minnesota stands out in many ways because of its approach to taxes and investment, as reflected in the things families and businesses value: a strong education system; affordable and high-quality health care; nation-leading parks and recreational areas; a deep commitment to protecting our environment; and strong and diverse economies throughout the state.
We know there’s more we can do to improve our tax code. And when we actually think about the things we share in and benefit from when we pay our taxes, it makes sending that check much more satisfying. It’s certainly better than an IRS tattoo.
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