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 Reforming
Individual IncomeTax and Corporate Franchise Tax
Representative Ann Lenczewski
Monday, March 16, 2009
 
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Proposes most significant individual income andcorporate franchise tax reform in over 20 years.
Highlights of 
 Reform
Proposal
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Increases the progressivity of the Minnesotatax system.
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Eliminates dozens of business subsidies and taxexpenditures that are ineffective, regressive, orthat we can no longer afford.
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Replaces tax subsidies that disproportionately  benefit upper-income earners with income taxcuts that benefit everyone.
 
 What Does The Tax Incidence of Minnesota’s Income TaxExpenditures Look Like
TODAY 
?
3
$300,000,000$350,000,000$400,000,000
Tax Expenditures by Income (2006)
Educator Subtraction ($0.9 million)Elderly Subtraction ($1.3 million)Jobz Subtraction and Credit ($1.4 million)Active Military Service Subtraction ($4 million)Non-itemizer Charitable Contributions Subtraction ($5 million) 
TotalMN Spending
rea chart.
$0$50,000,000$100,000,000$150,000,000$200,000,000$250,000,000
12345678910
Lowest to Highest Earners (sorted into 10 equal groups)
o
 
ng-erm are re monTuition Subtraction ($13 million)K-12 Education Subtraction ($15 million)Social Security ($26 million)Marriage Credit ($53 million)Minnesota Tax-Exempt Bond Interest ($56 million)All Itemized Deductions ($565 million)
Source: MN Depart of Revenue, TaxResearch Division, March 2009
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