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Dayton’s love for taxes shows in his budget

Published 9:26am Monday, January 28, 2013

Column: Guest Column, by Phil Krinkie

Gov. Mark Dayton last week showed his true socialistic tendencies with a budget proposal that would increase taxes on everyone in Minnesota.

Phil Krinkie

I didn’t think it was possible for Gov. Dayton to surprise everyone with the depth and breadth of his tax increases. The poor, the rich, the middle class, the individual, the family, the business — everyone will be affected by Mark Dayton’s tidal wave of tax increases. Everyone will be impacted under Dayton’s plan.

Key elements of the Dayton tax increase plan are:

• Raise $1.1 billion by creating a new fourth tier income tax rate for the top 2 percent of wage earners, including many small businesses. The Dayton plan redistributes this income to most Minnesota homeowners through a $500 property tax refund.

• Raise $30 million by repackaging his tax increase on snowbirds who split their residency between Minnesota and another state.

• Raise $322 million by closing so called corporate tax “loopholes.” The governor offsets this tax increase by lowering the corporate income tax rate from 9.8 percent to 8.4 percent.

• Raise $4.2 billion by extending the sales tax to clothing and a wide range of business services from advertising to haircuts. The sales tax will now be added to:

— Affiliate nexus sales.

— Digital goods.

— Direct satellite services and remote access software.

— Clothing on items over $100.

— Admissions and memberships.

— Over-the-counter drugs.

— Personal care services and instruction.

— Legal services.

— Accounting services.

— Auto and other repair services.

— Business services, such as legal, accounting, architecture, specialized design, computer, management consulting, advertising, employment, and business support services.

— Telecommunications equipment.

— Court reporter documents.

— Advertising materials and publications.

The governor does offset some of the sales tax increase by reducing the rate to 5.5 percent, which results in a net sales tax increase of $2.1 billion.

In addition, Gov. Dayton:

• Raises $370 million by raising the cigarette tax by 94 cents per pack.

• Raises $15 million by increasing the tax on rental cars by 2.85 percent.

• Raises the sales tax in the metro area by 25 cents to pay for transit projects.

The net result of these tax changes is $2.14 billion in tax increases in the 2014-15 biennium; but grows to $3.3 billion in the next biennium.

Phil Krinkie, a former eight-term Republican state representative from LinoLakes who was chairman for the House Tax Committee for a while, is president of the Taxpayers League of Minnesota.