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State Representative Tim Kelly
100 Rev. Dr. Martin Luther King Jr. Blvd.
651-296-8635
For more information contact: Jason Wenisch 651-296-2317
NEWS COLUMN
SHOULD YOUR RETIREMENT EARNINGS GO TO A STATE GRANT PROGRAM?
After taking a lot of heat for their numerous major tax increase proposals last session, the House majority has been careful not to present a comprehensive tax hike plan this year. But if you look closely, you will see a number of smaller “revenue generating” proposals making headway, nearly all of which leave me shaking my head.
The latest is a bill that doubles the filing fee if you own a mutual fund, with $23 million in proceeds to be allocated to need-based grants for college students through the State Grant Program.
You’ve read that correctly. By trying to set money aside for retirement, you would be taxed in order to better fund a state government college grant program.
As a financial advisor, I am befuddled as to why House Democrats want to penalize people for being responsible by saving for their own retirement. Talk about a disincentive for investing in a mutual fund.
Sure, the State Grant Program is projected to be in deficit by nearly $35 million, which will translate into pro-rated, lower financial aid awards for students. But this $23 million tax will be primarily borne by individual investors, not corporate entities. With approximately 1.1 million Minnesota households investing – some of whom are saving in order to help their OWN children pay for college - every dollar spent on filing fees is a dollar less returned to the individual investor.
Further, even though this tax will not provide any additional protections to consumers, it would likely discourage some from investing in mutual funds at a time when individuals should be encouraged to save and invest.
At some point, everyone on both sides of the aisle needs to realize that $32 billion ought to be enough to spend on state government spending. Finding new and obscure ways to tax our residents to balance the budget is a bad idea, but taxing a person’s retirement in order to put more money into state government programs is even worse.
News Items
- CONFERENCE COMMITTEES SHAPING IMPORTANT BILLS AT LEGISLATURE - (Posted: 2012-04-05 00:00:00)
- TAX RELIEF AND JOB CREATION BILL APPROVED IN MINNESOTA HOUSE - (Posted: 2012-03-22 00:00:00)
- MORE GOOD NEWS FOUND IN LATEST STATE BUDGET FORECAST - (Posted: 2012-03-06 00:00:00)
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