Tax Increases affect businesses [UPDATED]Published 3:57am Monday, May 20, 2013 Updated 6:02am Monday, May 20, 2013
The Fergus Falls Area Chamber of Commerce is troubled by the looming tax increases pending in the State Legislature.
All details have not yet fully emerged, but there could be a $2 billion tax increase to fix a $627 million budget shortfall.
Proposed dramatic tax increases include bumping the cigarette tax, adding sales tax to some business services and raising income taxes.
The proposed income tax hike will make Minnesota’s top bracket the 4th highest in the country. Legislators have included the income tax increase with the idea of targeting the top 2 percent of Minnesota’s income earners, but keep in mind —small businesses that file taxes as individuals in this category will also be affected.
Our small businesses provide hundreds of jobs in the Fergus Falls area and have been unfairly lumped into the “tax the rich” solution. When faced with paying the fourth highest income taxes in the country, what do you think our small business owners will be forced to do to balance their budgets? Will they cut expenses, employees, benefits, hours or philanthropy? Will they consider moving to another state with lower taxes?
This proposed income tax hike is aimed at making the “rich folks” pay their “fair share” however in reality it will hurt citizens at every income level.
Our small businesses are an integral part of our economy and community. As our businesses grow, our community grows and vice versa. When given the freedom to invest their revenue (rather than paying higher taxes), our small businesses do things like expand, hire new employees, and purchase goods and services from other small businesses. This benefits our entire community and beyond. All of these things result in economic stimulation and are a boon to our local and state economy.
The proposed tax increases will limit small business growth and competitiveness in Minnesota and Fergus Falls is too close to bordering states to not be concerned. North Dakota has already jumped on this opportunity by posting “Open For Business” billboards on Minnesota highways nearby.
Legislators should examine the budget and look for ways to make it more efficient before they implement tax policies that make our small-businesses collateral damage.
It is possible to erase the shortfall without raising taxes — reports are calling for an $856 million surplus for 2016-17 if we just leave things as-is.
We encourage the governor and majority leaders to acknowledge this progress as they put the finishing touches on plans regarding our budget and taxes. The last thing we should want to do is set back our resurgence from the Great Recession and our concern is that these policies would do just that.
Taxation and spending do not lead to prosperity; responsible spending and business growth is the right path for Fergus Falls and Minnesota.
Fergus Falls Area
Chamber of Commerce