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Legislative News and Views - Rep. Joe McDonald (R)

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House majority proposes billions in tax increases

Monday, April 29, 2013

 

By Rep. Joe McDonald

 

The Minnesota Legislature is taking steps toward making history – and not in a good way.

 

House Democrats recently passed bills that would have hard-working Minnesotans paying in the neighborhood of $3 billion in new taxes and fees. This would be the largest tax increase in 30 years – inflation included – and make Minnesota the second-most taxed state in our great nation.

 

At that pace, the government would be growing 8-10 percent, while the private-sector growth at only 2.5 percent. Government should not be growing three-times faster than the private sector.

 

Estimates show the cost would be $550 for every person in our state. The plain fact is revenue projections show we could balance our budget and have money left over without raising taxes by a single dollar.

 

Contrary to the Democrats’ tax-the-rich mantra, these taxes and fees would hit all Minnesotans one way or another. Beer, cigarettes, rental cars, sports memorabilia and more would be impacted. Even income taxes for people making as low as $22,000 would rise.

 

Here are some notable tax hikes in the tax bill:

 

  • Cigarette tax: Increase from 48 cents to $2.83 (113% increase)
  • Alcohol tax (203% increase): distilled spirits (119%), 3.2% beer (965%) and other beer (503%).NOTE: Summit Brewing said its annual state tax bill would jump from $550,000 to $2.3 million under House Democrats’ tax proposal. 
  • Income-tax increase: The House Democrat plan would make Minnesota the state with the second-highest income tax rate.
  • Elimination the charitable contribution deduction for itemized deductors and replaces it with a non-refundable credit for 8 percent of the amount over $400 donated
  • Elimination of the incentive to purchase long-term care insurance at a time when the state demographer is warning us of an aging population
  • Sports memorabilia tax: Would add a sales tax of 10 percent to items related to professional sports in order to pay for the Vikings Stadium 
  • Rental car tax: Increase from 6.2% to 9.2%

 

 

HHS BILL BAD FOR NURSING HOMES

We also continue receiving the majority’s spending bills on the House floor. One of them is the Health and Human Services budget bill, which recently passed. There is a $26 million net reduction in baseline funding for nursing homes and other long-term care facilities. Our seniors deserve better and their funding should be prioritized.

 

K-12 BILL BASED ON COSTLY BUREAUCRACY

The House also has passed the largest portion of the state budget, which funds K-12 education for the next two years. The spending total is $15.7 billion, a two-year increase of $227 million over projected spending on education and $209 more per pupil by the end of the next biennium. It also provides $50 million over two years for preschool and day care scholarships for children from lower-income families. The latter is an extension of a bipartisan initiative Republicans and Democrats piloted in 2011.

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