FOR IMMEDIATE RELEASE
St. Paul, MN — Minnesota’s richest 1 percent of households are getting $1.6 billion in federal tax cuts this year
April 15 marks the first tax-filing day since Congress passed a sweeping tax and budget bill last July. The One Big Bill, also known as H.R. 1, included massive cuts in public services and shifted substantial responsibility for providing and funding affordable health care and food assistance to our state and local governments.
On the first Tax Day since the bill was passed, the new federal tax law gives the biggest tax cuts to the wealthy in Minnesota:
- According to the Institute on Taxation and Economic Policy, the 20% of Minnesota households making less than $36,000 will get an average federal tax cut of $240 in 2026 from federal tax decisions made last year.
- In contrast, the richest 1%, with household incomes more than $927,700, will get an average tax cut of $52,370 — more than 200 times bigger.
- In total, Minnesota’s richest 1% of households are getting an estimated $1.6 billion in federal tax cuts this year.
Meanwhile, some of the new tax provisions often purported as benefiting average Americans in fact reach only a small number of working households, are smaller, poorly designed, and expire in a few years. These include a limited tax exemption for some workers who earn tips, a tax deduction for some overtime pay, a new tax deduction for some seniors, and a limited ability to take a tax deduction for loan interest for certain car loans.
These tax cuts reach only a very small share of workers, with the tax deductions for tips and overtime going to only 3 percent and 9 percent of U.S. households, respectively, according to the Tax Policy Center.
The bottom line: tax season marks a major milestone in the implementation of Congress’ and the Trump Administration’s signature tax and budget bill that slashed Medicaid and SNAP to pay for tax cuts primarily for the wealthy and an increase in funding for federal immigration enforcement.