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Gov.’s proposed tax increases unnecessary [UPDATED]
Published 10:14am Monday, January 28, 2013 Updated 12:17pm Monday, January 28, 2013Gov. Mark Dayton has issued his budget proposal for the new biennium.
It includes the largest tax increase in state history and the impact would be felt by virtually all Minnesotans.
Most of us expected the governor’s proposal to include tax increases, but it is a bit surprising just how far he went by proposing taxes that will impact all economic classes to the tune of $3.7 billion.
The thing is, tax increases are not even necessary to balance our budget because state revenue is rising even without them.
A responsible plan to balance the budget simply keeps spending to within the limits of our projected revenue growth.
Instead, the governor is proposing a whole new set of taxes to support excessive government spending.
An expansion of sales taxes would cost Minnesotans $2.1 billion. Services like haircuts and oil changes would be taxed. Internet sales would be taxed. So would clothing items of $100 or more. These taxes would hit the middle- and lower-income Minnesotans as hard — or harder — than top earners.
There also would be new business taxes which state officials say would cost our businesses $1.5 billion in 2015 alone.
A big chunk of those costs certainly would be passed along to consumers, resulting in higher prices. Dayton’s taxes also could cause companies to reduce
staffing or even leave the state altogether.
Our neighboring states already actively recruit Minnesota companies to relocate. Now, Wisconsin’s governor said his state will up the ante on pursuing Minnesota companies if Dayton’s new taxes become law.
Maybe the ultimate insult in Dayton’s budget proposal is a new tax on people who spend winters out of state. It seems our governor is set on taxing everyone one way or another.
Minnesota is recovering from the recession, largely because of improvements the Republican majority made in 2011-12 to slow spending growth and install new government efficiencies. Unemployment is now shrinking and revenue continues to rise.
We are on more secure economic footing today than a couple years ago and we cannot afford to risk derailing our progress through burdensome taxes.
One expense I wish our governor would have prioritized is paying off our debt to schools. Unfortunately, his proposal would not make repayment until 2017. That should have been at the top of our list and we should have settled that debt before looking for new ways to spend new tax money.
The governor’s proposal is designed to serve as a map for the Legislature as it drafts bills which form our budget.
My mission will remain to be an advocate for responsible spending and taxpayer protection throughout the process. I will keep you posted as things develop.
Rep. Bud Nornes
Dist. 8A, Fergus Falls
It’s nice to see that hyperbole and misleading statements are still in the Republican repertoire, but the claim, “the largest tax increase in state history” is undeniably false (given that, when comparing apples to apples he’s proposing an 11 percent increase).
“The “Minnesota Miracle”: For many years, communities relied on local taxes to support their schools and services. But in the late 1960s, less affluent towns were having trouble raising enough money to adequately support education and services. In 1971, the Legislature approved a sweeping package of tax changes meant to equalize school and services funding across all Minnesota towns. Called the “Minnesota Miracle,” it was estimated to generate $580 million over two years in new revenue – about $3 billion in today’s dollars – and represented about 20 percent of the 1972-1973 $2.8 billion general fund.”
Additionally, Dayton’s budget actually fixes the structural deficit (something that was completely ignored in the last session), and to claim that a “responsible plan” is to ignore it again strikes me as completely irresponsible.
“Minnesota lawmakers will face a $1.1 billion budget deficit for the next budget cycle, according to the state’s official forecast released Wednesday.
The estimate shows a $1.3 billion surplus for the remainder of this biennium, which will be used to pay back part of the $2.4 billion borrowed from schools to balance the current budget.”
And in response to the claim, “Wisconsin’s governor said his state will up the ante on pursuing Minnesota companies if Dayton’s new taxes become law.” – the response has to be, “so what?”
“Based on the Minneapolis Fed’s statistical model, employment in the whole state of Wisconsin is expected to grow by a faster-than-average 1.3 percent, while the unemployment rate should drop to 5.6 percent in the fourth quarter of 2013. Over 4 percent growth in personal income is expected.”
“Based on the Minneapolis Fed’s statistical model, employment in Minnesota is expected to grow by a solid 2.2 percent, while the unemployment rate is predicted to drop to 4.7 percent in the fourth quarter of 2013. Growth in personal income is expected to exceed 5 percent.”
If someone wants to move to a different state with slower growth, higher unemployment and less growth in personal income, I say, “Let them go” (since they’re obviously not that bright anyway).
In your next update it would be helpful if you actually produced some kind of evidence to support the claims that you’re making, and if it’s not too much trouble, the source of that information should be included (if I’m not mistaken, that’s what it means to have “transparency” – you let other people “check your work”).
Moe, what a portrait of duplicity you paint.
You quote several statements without attribution of source or context, then demand that Representative Nornes
provide some kind of evidence to support the claims he is making. As opposed to your “evidence” from an unknown source, in regard to an unspecified matter?
Pot calling the kettle black?
Ha ha, Jerome, tell me the truth now, you’ve been away at comedian school. Right? You really had me going there for a while, asking for “proof”! What a card! Did they give you one of those clown horns at school?
Then you could have us rolling in the isles when you would say “Hey Phaedrus, where’s your proof? Honk.
I demand you cite a citation. Honk Honk…..I always provide proof when I make a comment here. Honk, Honk, Honk! Man you slay me Jerome!
Love the honk and the honk,honks. Nice touch, but remember it’s just Jerome.
That reminds me of a story. I used to read the Three Billy Goats Gruff to my daughter and I would embellish it just a little. When the troll would come up onto the bridge I would read that he said, “Who’s that walking on my goll darn bridge.” (He was ‘sposed to be gruff, right?) So 4-year old daughter takes her book to Catholic preschool to “read” which really meant to repeat the story to the class and when the troll talks she says it exactly the way I had been saying it. That got me an invitation to the principal’s office. Why does Jerome remind me of that story? What is the current definition of a troll?
Bingo!
I’ll run it by you again – to refresh your memory. People use the following marks (around the xxx’s): “xxx” to indicate attribution. If you cut and paste that into Google (or your search engine of choice), then the source will be revealed in the search. Remember? Links get hung up in the filters, and the way to avoid that is by using quotation marks around the material being quoted from a source.
Bud, I expected more from you. You disappoint me. In the last budget the Republicans increased state aid to schools so the school could pay the interest on the loans they took out to cover their costs while the state hung on to tax money long enough to balance the state’s budget. That is irresponsible financial management. Taxpayers want to pay for educating their kids not interest on loans for the state.
Dayton’s proposal will no doubt be changed and something quite different could result. But one thing MUST be accomplished this session–stop state borrowing to fund things the people of Minnesota have said they want and services we’ve come to expect.
Quoth Larry Erickson alias Walt Henry, aka Larry of Curly Moe and Larry fame: “… One thing must be accomplished this session-stop state borrowing to fund things…”.
And, no doubt, substitute for borrowing the practice of extortionist levels of punitive tax rates designed to disincentivize success and accomplishment among the proletariat trolls. And to motivate companies and entrepeneurs to relocate across the eastern border to Wisconsin and to the western border to relocate to (income tax free) South Dakota.
Ka-ching