When Gov. Dayton published his budget yesterday, he said that raising taxes on the rich would be a priority of his. Unfortunately, he didn't tell the whole truth. There's no doubt that his 'tax reform' includes taxing higher income people more. Similarly, there's no doubt that his sales tax 'reform' will hit every Minnesotan.
Predictably, Gov. Dayton insists otherwise:
“For most Minnesota families, it is a wash,” Dayton said, adding that the plan does not increase the sales tax but broadens it.
St. Thomas economics Professor John Spry disagrees with Gov. Dayton's point that his plan broadens Minnesota's tax base:
Here are some highlights of Viard’s careful analysis and rejection of sales tax on intermediate business purchases:
actual state and local sales taxes diverge dramatically from the popular and textbook vision of the tax. One major flaw is the exclusion of a wide range of consumer services from taxation, which renders the consumer tax base much narrower than the textbook description suggests.
Rep. Kurt Daudt and Sen. David Hann responded to Gov. Dayton's proposal Tuesday, with Rep. Daudt noting that Gov. Dayton’s math and logic are flawed, saying that his budget “includes $3.7 billion in new taxes and $225 million in spending cuts.”
It would be interesting to hear Gov. Dayton explain how $3.7 billion in tax increases and $225 million in spending cuts is taking a balanced approach. Most people would say that's quite the imbalanced approach to balancing the budget.
Rep. Daudt noted that Gov. Dayton was re-instating the Political Contribution Refund program, saying that Gov. Dayton's essentially "taxing Children's Tylenol to fund welfare for politicians." When questioned what the basis is for his statement, Rep. Daudt said that non-perscription drugs would be taxed under Gov. Dayton's sales tax proposal.
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