What is Tim Walz’s economic policy? Here’s a look at what he did in Minnesota.

Minnesota Gov. Tim Walz is perhaps best known for his Midwestern roots, having grown up in Nebraska and working for years as a public school teacher and football coach in Minnesota. But voters will get a chance during his term Tuesday’s debate with vice presidential rival Sen. JD Vance on CBS to learn more about Walz’s views on the economy, a critical issue in the November election.

With polls pointing to a close presidential race in 2024, the share of voters calling the economy good has increased slightly, which helps Lifting support for the Democratic ticket of Vice President Kamala Harris and Walz. Still, nearly six in 10 voters describe the economy as “bad,” CBS News polls show, with the economy ranking as the top issue among likely voters.

Walz’s approach to economic issues is already evident in his actions as governor of Minnesota, a position he has held since 2019 and where he is now completing his second term. His actions included establishing the largest federal child tax credit in the country and establishing free school meals for the state’s K-12 students, while also increasing taxes on high earners in the state to fund these and other social programs.

Walz “contributed to the progressiveness of Minnesota’s tax code,” noted Carl Davis, research director at the Institute on Taxation and Economic Policy (ITEP), a left-leaning think tank. “In a system like Minnesota’s, where you’re asking more of the people at the top, with a progressive system like that, it’s much easier to pay for expenses on side initiatives like free school lunches.”

The taxes and social programs Walz signed into law in Minnesota reflect some of the plans the Harris-Walz ticket has implemented so far, including a more generous federal child tax credit and plans to increase taxes on high earners and corporations.

“The parallels are pretty obvious” between Walz’s track record in Minnesota and Harris-Walz’s statewide campaign, Davis said.

Minnesota Child Tax Credit

A number of states implemented or expanded a child tax credit following the pandemic, when the federal government increased the national CTC to up to $3,600 per child. This greater benefit was credited with helping to reduce child poverty to historic lows, but when this enhanced CTC expired in 2022, child poverty rates rose rose.

This prompted some states, including Minnesota, to explore implementing their own CTCs, ITEP’s Davis noted.

According to the Tax Policy Center, a tax-focused think tank, Minnesota’s CTC of $1,750 per child is the most generous federal child tax credit in the United States. Walz touted it as “the best child tax credit in the country” and encouraged Minnesota parents to file their taxes to take advantage of the benefit.

Vance has since made a suggestion Expansion of the federal CTC to $5,000, but Republican lawmakers blocked a modest expansion of the tax benefit earlier this year. Vance did not vote on the failed Senate bill to provide a larger CTC for low-income families because he was not present for the vote. He told “Face the Nation” declared in August that the vote was a “show” and was doomed to fail regardless of the direction of his vote.

Tuesday’s debate is likely to challenge Walz’s ideas about how to help families afford the rising cost of living Vance’s economic viewswhich, in addition to the expansion of the CTC, also included criticism of the Democrats as “anti-family”.

Reducing Social Security taxes

Walz has also tried to help Minnesotans at the other end of the age spectrum — retirees. As part of the state’s 2023 tax law, Walz eliminated Minnesota’s income taxes on Social Security benefits for three-quarters of beneficiaries.

Under Minnesota law, couples with annual incomes of less than $100,000 and single earners with incomes of less than $78,000 are now exempt from state taxes on their Social Security checks.

Eliminating taxes on Social Security benefits was also proposed by former President Donald Trump earlier this year vowed to eliminate the federal income tax on the monthly government payments. About 40% of the country’s 67 million Social Security recipients earn enough from their benefits to owe taxes to the IRS.

But there’s a big difference between the two proposals: According to the Tax Policy Center, Walz paid for his Social Security tax cuts — like the CTC — by raising taxes on higher-income households. Trump and Vance, meanwhile, have indicated they want to cut taxes on corporations and extend the tax cuts in the 2017 Tax Cuts & Jobs Act that made this possible Most generous tax breaks for high earners.

Walz achieved his tax cuts for families and seniors by limiting the amount of standard or itemized deductions that high-income filers could claim, as well as reducing the deduction for dividend income and imposing an additional tax on capital gains, the Tax Policy Center notes.

How does Minnesota’s economy compare?

Minnesota’s gross domestic product has grown about 5% since 2018, when Walz was elected governor, according to the Minnesota Compass, a data site from Wilder Research, a Minnesota-focused research group that focuses on issues such as homelessness and public health.

Since the height of the pandemic, when employers across the country shed workers, Minnesota has regained its lost jobs and is now back to where it was before the public health emergency, its data shows.

Minnesotans also earn more than the typical American worker, with a median income in the state of $85,000 in 2023, compared to about $78,000 nationally, Minnesota Compass has found. The data shows that Minnesotans’ incomes have been above the U.S. average for at least three decades, well before Walz’s election.

The state ranks very useful for doing businessA recent study by business news site CNBC ranked the country 6th out of 50 U.S. states based on a number of criteria, including competitiveness, workforce, infrastructure, economy, quality of life and ease of doing business.

A number of companies have recently planned expansions or investments in Minnesota, including a $5 billion expansion at Mayo Clinic and a historic $525 million investment from Polar Semiconductor.

The state’s relatively strong economy also helped generate enough tax revenue to run surpluses at the start of the 2019 and 2021 budget cycles, as well as a huge $17.6 billion budget surplus for 2023. The latter helped the state finance the ambitious social programs signed into law by Walz, including free school meals for children.

– With reporting from the Associated Press.