Column: DFL tax plan provides a fairer road to prosperityFor too many years, there have been two Minnesotas.
By: Erik Simonson, For the Budgeteer News
For too many years, there have been two Minnesotas.
Upper-class Minnesota weathered economic downturns, even recessions, because state officials would shield them from the worst pain. There would be no tax hikes; in fact, their taxes would be cut. Existing tax loopholes would expand.
The rest of Minnesota wasn’t so lucky. Their share of the tax burden in the past 10 years grew. Their services were cut. A college education often became beyond their reach. They were paying more than their fair share.
Last year, the House DFL told Minnesotans that enough was enough. Our middle class had taken a disproportionate share of the economic pain. Past legislatures avoided making painful choices by using smoke and mirrors to balance the budget.
We believe there is another way, a way that will allow us to right our
fiscal ship and share the benefits of a stable state economy.
The House DFL released our tax bill last week. Our plan rejects the budget trickery used in the past. It will pay back the $850 million we own to our schools and makes historic investments in middle class tax relief, job creation and education.
Nobody likes paying taxes. But everybody appreciates the benefits of taxes. Taxes provide health care to those who can’t afford it, educate our kids, build our roads, fight our fires, and care for our infirm and injured.
The old way of balancing deficits on the backs of the middle class and our children is over. We will require all Minnesotans to pay their fair share to give our state a bright future.
Our House DFL tax bill will:
Pay back our schools and eliminate budget gimmicks: Pays back the $854 million IOU to Minnesota schools through a temporary income tax surcharge on only the wealthiest one-half percent of Minnesotans (taxable income greater than $500,000 per year for joint filers).
Provide middle class property tax relief: Provides direct property tax relief for nearly 1 million Minnesotans through the Homestead Credit Refund, retools renter’s credit and increases funds to cities and
Ask wealthiest Minnesotans to pay their fair share: Raises the income tax rate to 8.49 percent on the wealthiest 1.1 percent of individuals (taxable income greater than $400,000 per year for joint filers). This increase would affect only 3.3 percent of businesses.
Close corporate loopholes and repeal preferential tax treatment: Eliminates corporate loopholes that have allowed corporations to shelter profits overseas and eliminate other subsidies that are outdated, ineffective, or that we can no longer afford.
Promote economic development and job creation: Keeps and grows jobs in Minnesota through investments in a Rochester Destination Medical Center, Mall of America Expansion, and 3M expansion in Maplewood.
Provide tax relief for Minnesota businesses: Levels the playing field for Minnesota brick-and-mortar and online retailers with the affiliate nexus, simplifies taxpaying with an upfront exemption for capital equipment, and improves the Angel Investor Tax Credit and the Historic Credit.
Recover state costs from tobacco and alcohol consumption: Increases the user-based fees on cigarettes to $2.83 per pack, helping recover state costs associated with tobacco use. It also will increase the user-based fees on alcohol by 84 cents per 12-pack, 47 cents per bottle of wine, and $1.58 per bottle of liquor.
Provide tax relief for veterans:
Creates a veteran-jobs tax credit for Minnesota businesses hiring veterans and expands income tax credit for veterans.
When we came before voters last November, DFL candidates promised that we would make the tough choices. Our budget shows that our
vision for Minnesota extends further than the next election, that stopgap measures and tricks aren’t worthy of our citizens, and our goal is nothing less than a better future for every Minnesotan — regardless of economic status.
Erik Simonson (DFL) is the Minnesota state representative for district 7B.