It's bad for business, bad for taxpayers

It’s funny how some people have bought Gov. Dayton’s “tax only the rich” spin while trying to scare you into believing that the world will end if the Legislature doesn’t support his nearly $2 billion tax hike.

They tell you that Republicans refuse to compromise, that they’ve passed an “all cuts” budget, and that they cater to “big money interests” without citing their apparent exhaustive research that led them to share their personal partisan belief as fact.

For perspective, I’d like to address a few of the claims being over-reported and wrongly accepted.

On compromise: The Legislature began the session discussing a budget of $32 billion. Gov. Dayton initially proposed $37 billion in spending. In a compromise move, the Legislature set its target to $34 billion - an amount that will spend every dollar that the state is expected to collect in tax revenues during the biennium. The governor trimmed his plan to $36 billion, and wants to raise taxes by $1.8 billion.

On the Legislature’s “all cuts” budget:  Minnesota spent more than $32 billion on government programs during the last budget cycle when you consider spending from its General Fund plus $2 billion in federal stimulus funds. Our budget plan for the next cycle spends more than $34 billion. It’s the largest General Fund budget proposed in the history of this state, and contains $2 billion in new spending. How did a $2 billion funding increase become “all cuts?”

On the “you didn’t pass a balanced budget” rhetoric: The Legislature tried to engage Gov. Dayton and his staff to negotiate so we could present him a final plan that he would sign, but he would never get past the “you need to raise taxes” ultimatum.  When it became clear he wanted to take the budget debate to special session - and said as much in an interview with a Minneapolis newspaper - we sent him a balanced budget, spending $34 billion. Had he signed it, there would be no need for special session, and certainly no talks of a government shutdown.

On Dayton’s proposal to tax “only the top two percent” of Minnesota’s wage earners:  Responding to his initial budget proposal, the Department of Revenue issued a Tax Incidence report detailing how Dayton’s tax hikes would impact all Minnesotans.

Yes, ALL Minnesotans would be impacted. 

It’s true; the top 2 percent of wage earners would pay higher income taxes under Dayton’s plan.  But his proposal also raises corporate taxes and expands sales tax rates, meaning everyone pays the price.

Quoting the Department’s study: “Some of the burden would be borne in higher prices, some in lower wages, and some in lower returns to business owners.”

To simplify the findings, let’s use 3M as an example. By forcing 3M to pay higher taxes it will inevitably pass that financial loss on to the consumer. If you buy a 3M product, you’d be impacted by Gov. Dayton’s tax hike plan. And that’s just one company.

Or it could simply cut employee wages or lay some workers off permanently.

Want a few more under-reported aspects of the Dayton tax hike proposal? If you’re looking to buy a DVR or book a Minnesota hotel room online, you’ll pay sales taxes. Actually, if you want to make Internet purchases from web sites like Amazon.com, you’d be subject to the sales tax. That impacts everyone who shops online - far more than the top two percent of rich Minnesotans.

Folks, this is why Dayton’s tax plan is bad for businesses, bad for the taxpayer, and bad for Minnesota.

It’s been stated that Minnesotans elected Gov. Dayton based on his campaign promise to raise taxes. Does anyone recall more than 56 percent of Minnesotans voting against him and his ideas?  Or that Republicans gained 25 seats in the Minnesota House, and gained control of the Senate for the first time in history, based on the campaign stance of making government live within its means?

Disagree with the spending priorities if you wish, but the fact is the Legislature has compromised and approved a balanced budget.  The sky will not fall if Minnesota spends $34 billion on government programs. Did I mention that $34 billion represents the largest general fund budget in the state’s history?

Which begs the question: Why does the governor want to raise your taxes?

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