I saw an interesting article from MPR this week that I wanted to pass along. Last week, Governor Dayton held a press conference touting so-called tax cuts he signed into law, claiming more than $508 million dollars in "tax relief." MPR found these claims "misleading" for a number of reasons.
First, about $232 million of the $508 million in "tax cuts" are from repeal of the three damaging business-to-business taxes passed last session. Those taxes were a part of the $2.1 billion in tax increases passed by Democrats in 2013 to cover the $627 million deficit facing the state last May. To claim that repealing taxes you increased last session are a "cut" is indeed misleading.
In addition, the remainder of the "tax cuts" are from conforming Minnesota's tax code to the federal code. Many Minnesotans faced a tax increase if Minnesota did not conform to the federal tax code that allowed for tax exemptions on things like employer-provided adoption and tuition assistance, among many others.
For Governor Dayton to claim that he is cutting taxes simply by preventing a tax increase is dishonest. Those families are not seeing more money in their pockets, they're simply not paying higher taxes that would have resulted had Minnesota not conformed to the federal code.
It's disappointing that the Governor has chosen to mislead the public about the nature of these tax bills. If Governor Dayton is interested in truly reducing taxes, I'm sure there are legislators on both sides of the aisle that would happily work with him to do that.
Have a great weekend,