TL/DR –
President Donald Trump has signed a 1,000-page bill that primarily focuses on tax reform, including extensions of the 2017 Tax Cuts and Jobs Act, tax changes for research, and development and energy tax repeals. The legislation will deliver tax cuts for all Minnesotans, with the tax relief varying across income brackets. However, the bill also includes cuts to SNAP and Medicaid and rolls back clean energy tax credits, which could strain food banks, increase workload for counties, and lead to rising electricity prices.
President Trump’s New Law Impacts Minnesota’s Economy
President Donald Trump’s recently signed One Big Beautiful Bill is set to have significant economic implications for Minnesota. Experts are closely monitoring these developments due to the far-reaching effects expected.
Tax Cuts and Business Implications
A large part of the 1,000-page bill focuses on tax reform, including extensions of the 2017 Tax Cuts and Jobs Act (TCJA), energy tax repeals, and R&D tax adjustments. The Institute on Taxation and Economic Policy suggests the tax proposals will offer tax relief to all Minnesotans, with variations across income brackets.
Minnesotans in the lowest 20% of earners are predicted to see an average tax cut of $240 in 2026. In contrast, the top 4% will experience an average cut of $19,530, according to the Institute’s July estimates. The bill also includes provisions for businesses such as making the 21% corporate tax rate from the 2017 TCJA permanent, which Doug Loon, President and CEO of the Minnesota Chamber of Commerce, believes will benefit Minnesota businesses.
Social Cuts and Their Consequences
The lost revenue from tax cuts will partly be balanced by adjustments to SNAP and Medicaid. Sarah Moberg, interim CEO for Second Harvest Heartland, warns that SNAP changes could lead to an increase in people needing emergency food relief. She suggests that the bill could put Minnesota’s food relief industry on an unsustainable path.
According to Second Harvest Heartland, the proposed cuts could eliminate SNAP benefits for 450,000 Minnesotans, including 175,000 children and 75,000 seniors. The bill’s proponents, including Trump and other Republicans, argue that the SNAP and Medicaid cuts aim to address waste, fraud, and abuse.
Energy Reforms and Clean Energy Rollbacks
The One Big Beautiful Bill also reduces clean energy tax credits from the Inflation Reduction Act (IRA), affecting electric vehicle incentives and clean energy production credits. Megan Mahajan from Energy Innovation believes this could have significant impacts on Minnesota, a state with a goal for carbon-free electricity by 2040.
Energy Innovation projects a 31% increase in wholesale electricity prices in Minnesota by 2030, potentially causing residential, commercial, and industrial utility rates to rise by 25-42%. They also predict an increase in average household energy bills by $110 per year by 2030 and $410 by 2035. Mahajan warns that the loss of federal tax credits could impact Minnesota’s economy negatively in the long term.
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