Minnesota Politics
4th Tier Tax
About 96% of business owners in Minnesota are not affected by the 4th tier tax rate. And those who are pay about 2% more on income above $152,541.00 only — anything below that is left untouched.
I’m a small business owner. My wife and I run our business and we currently have one employee. My business has been quite successful and we’re living very comfortably. Yet I still don’t make enough to be affected by the 4th tier tax. Or I should say I’m not NEGATIVELY affected by it.
The 4th tier tax has played a significant part in raising Minnesota’s revenues from previous deficit levels to its current surplus levels. Local Government Aide (LGA) and the homestead tax credit have been returned to Minnesota along with the 4th tier tax, LGA having been paid for in significant part because of the 4th tier. And with these programs back in place my property taxes, along with those of most Minnesotans, have come down. So not only is the 4th tier tax level not harming the vast majority of Minnesota’s small business owners, it’s actually helping them.
And the new surpluses Minnesota is experiencing could help our state make much-need investments in our neglected infrastructure. All busineses, small and large, require maintenance and upgrades to infrastructure in order to function efficiently and competitively in a global marketplace.
The reality is that if the 4th tier tax level were to be repealed a very small percentage of small business owners would see their taxes go down. The vast majority of business owners, along with the vast majority of Minnesota residents, are benefiting from the existence of the 4th tier tax.
