Gov. Dayton recently released his state budget proposal and has made no secret he is on a crusade to raise taxes on rich Minnesotans. The reality is he takes aim directly at Minnesota families, small businesses and local governments. He claims the proposed budget contains no gimmicks, but it’s full of gimmicks.
I recently had the opportunity to hear the governor’s Commissioner of Revenue Myron Frans talk about the proposed budget. The presentation was all about revenue enhancements, not new taxes. One had to carefully do the math to see that the Democratic Farmer Labor (DFL) party’s leader, Gov. Dayton is actually proposing to impose over $3.6 billion in new taxes on Minnesota families, small businesses and local governments. Some $2 billion dollars of that is through increased sales taxes paid by Minnesota citizens.
It was explained that the budget included a 20 percent sales tax reduction for everyone by dropping the sales tax rate to 5.5 percent. We were told the reduction would enhance sales tax revenue by $2 billion dollars, by broadening the sales tax to new items not currently taxed. Wow, no wonder we have budget problems! Only a purebred bureaucrat could keep a straight face while telling a room full of adults that charging Minnesota families, small businesses and local governments an additional $2 billion dollars in sales tax equals a 20 percent reduction. The truth is under the DFL’s current budget plan we will be paying sales taxes on all kinds of new things we don’t pay sales tax on today.
Talk about a war on women, customers getting haircuts and styling will be paying the sales tax. The governor and DFL Party plan to tax the labor of the hard working independent small business women that operate beauty shops here in rural Minnesota. Guess beauticians and their customers are on the governor’s and DFL’s list of the unnecessarily rich. The expanded sales tax also includes financial, insurance and real estate service fees. Labor on computer software services, accounting, bookkeeping, printing, architecture, and graphic designing services, all clothing costing more than $100, as well as legal services, haircuts, labor on all auto and farm machinery repairs, would also be subject to the governor’s sales tax proposal.
Counties, cities, schools and townships will be hit hard by the DFL sales tax proposal. County Commissioner Joe Vene, who is also the president of the Association of Minnesota Counties, recently estimated that his home county of Beltrami will pay double in annual sales tax, increasing from $334,000 to $713,000 under the current DFL budget proposal. That means the local property tax levy will have to go up to pay for the new sales taxes. Another gimmick, state charges sales tax on local governments, which must be paid for by local property tax levies.
The DFL party and the governor are firmly in control and on a path to wreck our slowly improving state economy with a massive $3.6 billion tax hike on Minnesota’s families, small businesses and local governments. There is another solution, hold down state spending to match revenues.That worked during the past two years resulting in a $1.3 billion surplus, all of which goes toward paying back the $2.67 billion school aid shift. The DFL and governor’s proposed budget ignores the remaining $1.37 billion still owed to schools. Guess if you ignore a gimmick, it’s not a gimmick.
Chair, Aitkin Co. Republican Party