ST. PAUL -- An income tax plan -- a carbon copy of cuts approved last year -- won praise Thursday from business groups and criticism from a group tied to organized labor.
The House Taxes Committee discussed the plan and set it aside for inclusion in the larger tax bill. The plan would cut Minnesota's income taxes by a half-percentage point in the highest and lowest brackets and three-fourths of a percentage point in the middle bracket. Starting at the top, the three new rates would be 7.5 percent, 6.5 percent and 5 percent.
New features this year could include provisions to change the way businesses are taxed and allow people to subtract health insurance premiums from their taxable income.
But the plan -- a key item in the House GOP agenda -- faces obstacles. Gov. Jesse Ventura doesn't want a big tax cut this year and Senate DFLers are looking at more modest reductions.
Duane Benson, executive director of the Minnesota Business Partnership, said another income tax cut would make the state more attractive to workers and businesses.
Wayne Cox, executive director of Minnesota Citizens for Tax Justice, presented an analysis that shows the cuts benefit the richest Minnesotans most. Those making $100,000 or more would see an overall tax rate cut four to five times bigger than those making less than $10,000, Cox said.
''There are hundreds of thousands of Minnesotans that will not receive a penny of this individual tax cut,'' Cox said.
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