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Legislative News and Views - Rep. Linda Runbeck (R)

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Gov's tax increases would hit us all

Friday, January 25, 2013

Greetings from the Capitol!

The big news this week is Governor Dayton's budget proposal – containing a record-setting tax increase of $3.7 billion in new taxes!

This includes $2.1 billion in new sales taxes. Everything from haircuts to oil changes and Internet purchases would be taxed. So would clothing items costing $100 or more. Smokers would pay 94 cents more per pack and the top income-tax rate would spike 2 percent to 9.85.

These taxes would hit middle-class Minnesotans in the wallet. It would be a double-whammy for all workers who just had their paychecks reduced by 2 percent due to the reinstatement of payroll taxes by the feds.

Estimates are that Dayton’s proposed tax increases on businesses would cost them $1.5 billion in 2015 alone. Much of this burden would be passed on to consumers in the form of higher prices. The added taxes also would cost us jobs, weaken small companies and put Minnesota at a serious disadvantage on the competitive global market. Currently, we are ranked among the nation’s worst business climates and this would set us back even further. Click here for a Star Tribune article with more about how Dayton’s taxes would hurt our business economy.

The governor’s extra spending and taxing are unnecessary. Furthermore, it puts our slowly rebounding economy at risk. Our state is generating surplus revenue even without tax increases. Unemployment is down to 5.5 percent and shrinking. As I wrote last time, surplus revenue totaling more than $2.5 billion has been generated since the fall of 2011 due to Republicans’ spending reductions and restructuring.

As the minority lead on the Transportation Policy Committee, I find it instructive that the governor is not proposing an increase in the gas tax (which goes to roads) but is seeking a transit tax in the seven-county metro area which would cost citizens approximately $100 million per year for bus and rail purposes.

It will be up to the Legislature to draft a budget for the next two years. We will receive an updated economic forecast in February, from which a specific plan will be developed.

I will continue advocating for a budget which grows the economy, not the government. We can ill-afford the economic uncertainty the governor’s excessive spending and added tax burden would bring us.

Please continue providing me with your input on this issue and others. You can reach me by emailing rep.linda.runbeck@house.mn.

Have a great weekend,

Linda Runbeck

 

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