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Tuesday Talk: What do you think of Dayton’s budget?

January 29, 2013 By Joe Sheeran, Communications Director

Governor Dayton’s budget delivers on his fiscal fairness pledge. It raises income taxes on Minnesota's richest 2% and provides property tax relief while investing in education and economic development initiatives. One part of Dayton’s tax plan that has gotten the most attention in the last week is his proposal to lower the sales tax rate but extend the sales tax to services.

What do you think of Dayton’s budget overall? Is this a fair plan to move Minnesota forward?  

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28 Comments:

  • Herb Davis,Jr. says:

    January 29, 2013 at 7:39 am

    I fully support the Governors plan. If I saw something better I might change my mind…so far just sniping by those who have a “special” interest!

  • Tom Dwyer says:

    January 29, 2013 at 7:47 am

    The question really is did the conservative government from 2010-2012 solve the problem of balancing the budget on cuts alone and shifting gimmicks.  I commend the governor for putting forth a plan that is least fair.  Some may not like the proposal because their ox is being gored.  Passing legislation is like “making sausage you don’t want to see it being made but in the end it is saleable.”

  • Laura Waterman Wittstock says:

    January 29, 2013 at 8:13 am

    Dayton inherited a boatload of ills that can’t be fixed in one budget season. The budget, if anything is more modest than it could be on the income side. Continuing the strategy of raising fees may not work in the long run but I do agree on a raise in the tobacco tax. Raising the liquor tax is also called for and Dayton missed a step there. However, using fees instead of raising the general tax is probably the wrong way to go. Putting a first time tax on clothing is a shock, especially for winter-cold Minnesota where coats may exceed $100 per item and would be in the Dayton budget subject to taxation. I would rather see a rise in the general tax instead of picking away at the pocketbooks of Minnesota’s population through fees of one kind or another.

  • Sue B says:

    January 29, 2013 at 8:33 am

    I am a strong supporter of Governor Dayton, but I disagree with his proposal to expand the sales tax to clothing and some services. 

    The sales tax is an extremely regressive tax.  When it was enacted many years ago, food and most clothing was intentionally excluded so it would not hit lower income people so hard.  Choosing a number like $100 means nothing unless that number is adjusted for inflation, or else, in a few years most clothing will be subject to the tax.  Expanding the tax, but lowering the overall rate also means nothing, because future legislatures can easily raise the rate again.  (It was only 3% when first enacted.) 

    In addition some services, like car repair, hurt low income people the most. They can’t afford to buy new cars as often, and old cars can cost a lot in repairs.  Paying tax on a repair bill of several hundred dollars adds up fast.  I would rather pay 7% on restaurant meals and books and iPods, than 5% on clothing and car repairs. 

    I would rather they just raise the rate on income tax, because it is a less regressive tax.  Also, I don’t mind paying my fair share of taxes for the privilege of living in a civilized society, but please don’t make me pay more than large corporations.

     

  • Stephen Peters says:

    January 29, 2013 at 9:01 am

    I support Gov. Dayton. He has the best interests of the common good in mind and we need more people like him in public office. His proposal is fair.

  • Rob says:

    January 29, 2013 at 9:08 am

    Elections matter. It is a complete reversal of “Wall Street” Tim Pawlenty’s pampering of the wealthy budget. A more progressive sales tax and sharp reductions in property taxes is good news for the 98 percent. Terrible Timmy must be gnashing his teeth. It is a shame Gov. Dayton must expend so much political capital repairing the pillager’s damage.

  • Mike C says:

    January 29, 2013 at 9:10 am

    The budget is a disaster. Once again it put the want to haves against the hard working people in the state. Obama said the exact same thing about raising taxes on the top 2% and yet taxes went up on 77% of the country. 

    His budget imposes a VAT tax on goods and services and will shut down or raise the price on goods and services that even the poorest in Minnesota use every day.

    I hope that even the left see this money grab as the disaster that it is and push back.  The only good thing about this budget is it will give the GOP the governors office and the House back in two years.

  • W. D. (Bill) Hamm says:

    January 29, 2013 at 9:18 am

    It certainly looks fair to his beloved Middle Class minority doesn’t it. For those of us on the working poor end of the stick, we are getting screwed again by the most reggressive tax in MN, the Sales tax. While for many it may look like little change, ask yourself who drives the 10+ year old cars that need repair. Ask yourself who will see still see the highest percent of their income going out to sales tax. Worst of all we know that in 2 or 4 years, that 5.5 will creap right back up. As I have said many times before, the only thing the rich and middle class can agree on is screwing the working poor, so much for fairness.

  • Clark Bergman says:

    January 29, 2013 at 9:24 am

    The original 3+% sales tax was advertised as a temporary measure that would expire when the budget crisis of the time (early 60’s I think) was over.  That crisis passed but the sales tax has risen inexorably since then with tack-ons (“transportation tax,” “city tax,“ball field tax,” etc.) to boot. 

    Expanding the sales tax to groceries, large-ticket clothing, professional services, etc. is as regressive a tax as there is no matter what the promoters say.  With history is a guide, it is safe to say that reducing the overall sales tax rate is just ploy to extend it to other items; the reduction will only be temporary.

  • Charles F Zea says:

    January 29, 2013 at 9:41 am

    We have rode the “tax the goods” horse hard for a long time.  It is time to give that horse a rest.  Don’t raise the tax on clothing.  People spend more of their money on services than goods. It only makes sense to broaden the tax base to include services.

  • Bernice Vetsch says:

    January 29, 2013 at 9:58 am

    I hope the legislature goes along with the governor’s budget as far as they feel they can.  The sales tax on clothing (not many people buy clothing that costs $100 or more) can be written into law that allows for inflation.
    There are probably other very minor fixes for provisions questioned by some members.

    The point of the governor’s budget is to begin to reverse the most damaging tax policy ever seen in our state:  Cut taxes on the wealthy and watch the economy blossom. (What? you say. Will infrastructure appear with investment?)

    It’s not working in England, where their economically illiterate prime minister and chancellor are wiping out the social safety net with an austerity program they call “expansionary austerity,” an oxymoron of the first order.  Poverty, unemployment, homelessness, huge tuition hikes, reductions in health care access—and more—is how it is “working” there.

    And it isn’t working in Greece, Spain and other countries where the poor are being forced to pay their countries’ debts with lower salaries and higher unemployment, lower pensions and higher taxes, et cetera.  Who wins? The banks who talked poor countries in big loans.

    We should be extremely grateful to have a governor who, even when both houses of the legislature were held by the ALEC-inspired Right, fought back on behalf of ordinary people. 

  • Rob says:

    January 29, 2013 at 10:20 am

    Bill. If the poor cannot feel better about lowering their sales tax, they better think twice. Should the Gov. raise their sales taxes instead? Furthermore, if you are buying > $100 clothing and you are poor, you deserve to be.

  • Randy McLaughlin says:

    January 29, 2013 at 11:05 am

    How can a tax that hits individuals and small businesses but can be significantly avoided to a much larger degree by large corporations progressive or a step forward?

    If an individual or small business needs tax help, an accountant or needs to update their website, they engage a service provider.  A large corporation will much more likely have staff performing the bulk of that work.  If an individual offers web design services to the public, their customers would be taxed under Dayton’s proposal.  If this same individual provided the same service as an employee, their work would not be taxed.  Main Street get the shaft while Wall Street simply shifts contract work elsewhere.

    For thousands of people, a new burden will be added.  They will have to register with the state, maintain a record of how much they earned and how much tax they collected and file yet another tax return.  From what I can see, when your 11 year old daughter babysits for the neighbors, she will now be obliged to first register her “business” with the state, add and collect sales tax (you can’t just had her a $20 bill any more), maintain records of her earnings and collections and then make regular filings and payments to the state.

    I don’t know about you, but I frankly find it a pain to have to do the mental math whenever I select something to buy to figure out what it will really cost me.  We either fumble with coins to come up with the resulting cost of a $1.00 item or we hand over the plastic and let the merchant pay a 3% tribute to the banks to save us the effort.  Sales tax, as currently collected, is a painful exercise imposed on every affected transaction.  Expanding it only adds to the pain.

  • Trevor says:

    January 29, 2013 at 11:07 am

    Minnesota needs to escape the biennial budget crisis we’ve been battling for the last decade. I like cigarette tax increase, lower-but-broader sales tax, and taxing online sales like in-store sales. Property tax relief (property taxes are as/more regressive than sales taxes) is vital too.

    More importantly, this plan invests in education (which is critical in a global economy) and perhaps finally allows our state to get its head above the deficit crisis waters and actually move forward on other issues left behind in our decade-long budget battles.

  • W. D. (Bill) Hamm says:

    January 29, 2013 at 11:33 am

    Rob, have you had no math in your life? By broadening sales tax it more than mutes the 5.5% because of all the other thing primarily done by the poor like Auto Repair. There is no decrease here, even the Governor admits that. The reality here is that the working poor will pay at least as much and for many it will be a lot more with the ever present threat of another rate increase coming. To add insult to injury about half those folks will not see any property tax rebate because they don’t own a home. Middle Class, Rich, they all screw us.

  • Bruce Kittilson says:

    January 29, 2013 at 12:09 pm

    I like Governor Dayton and appreciate the fact that he laid everything out early and clearly.  The comments that follow are not realistic criticisms of his proposals but are, in a way, pie-in-the-sky feelings about the whole taxation mess.

    (1) Only income should be taxed.  If one has income one can afford the tax.  (2) There should be no sales taxes.  (3) There should be no sin taxes.  Soon it will be considered altruistic to smoke, because we need the money.  (4) Fees could be used in limited ways when large percentages of the population do not benefit from the related services.

  • Mike T. says:

    January 29, 2013 at 12:46 pm

    If the tax plan is essentially a wash as Governor Dayton describes it, then I have some questions.  1) Why do it if it truly “a wash”?  2)  Where is the extra 2 billion in spending coming from if it is “a wash”?  3)  If it will have no real impact on the tax amount I pay, how long will it take our lawmakers to raise tax rates up again (from the proposed 5.0%), this time including everything under the new proposal, which will be yet another tax increase?

  • Rob says:

    January 29, 2013 at 1:06 pm

    Bill,

    The governor and the state’s accountants are calling it a wash for
    all but the top 2 percent. But you must remember, increasing taxes on the mega-rich results in more money for schools, infrastructure and healthcare. These all benefit the rest. Consider the totality of the budget. Bottom line: increasing taxes on the rich is good, flat taxes on the rest is good, if it mends the social safety net. Can we agree that Pawlenty was a nightmare?

    Oh: my math aptitude is at the 98th percentile, if Stanford is a good gauge.

  • Rob says:

    January 29, 2013 at 1:21 pm

    Bill, One more thing, I grew up very poor. One of the things that sucks about being poor is the time and energy expended to avoid paying for services, We cut our own hair, repaired our own cars and patched our own jeans. I would love to see the taxes paid for services by those in poverty. I am guessing it is extremely low.

  • Sophia says:

    January 29, 2013 at 3:12 pm

    Governor Dayton,
    I think you plan is a good one.
    However, I am a Boomer and every once in a while I want to get my hair cut, or buy something new.

    What will happen as I see it…a person will go shopping and buy a few items at a time, find someone they know to cut their hair.
    I could go on.

    Have you thought of the people in Nursing homes or assisted living, they will be hit the hardest.
    Also, the poor will have to pay taxes when they do not have money.
    I think people on Welfare should not be able to spend money on cell phones, nails, hair, when theri children are starving or have no shoes. This money should only go for food.

    Also, that people who come here from Somali should not get Free Housing, Free Cars, Free Education, that is not fair to us who are Americans. This goes for any other person coming into the USA. I know this sounds unfair, yet I have seen to many people getting Free Money because they are from another Country. Tax Them also…

    Give it to the people who need it the most, a job,


    Thank you

     

  • William J Graham says:

    January 29, 2013 at 4:07 pm

    Three cheers for Governor Dayton!  His budget is even handed, fair minded, and solves much of our problem.  Everyone pays a bit more as it should be in order to keep Minnesota in the top 10 of America’s best places to live.  Every Democratic legislator should support this plan and not tinker too much with it.  Maybe even a few fair-minded Republicans will join in as well.

  • CORINNE LIVESAY says:

    January 29, 2013 at 4:54 pm

    The most fair and sensible budget we’ve seen in a long time!!

  • Tom & Charlotte Meinz says:

    January 29, 2013 at 10:35 pm

    I am wondering if there has been any thought given to all the effort involved in collecting, reporting and paying the state for the sales taxes on all the newly added taxes.  There is a LOT of opportunity for problems in this process.  So many more MN citizens will become tax collectors.
    We think of sales taxes as a regressive tax and now it is being added so the poor and middle class will have to pay it on most everything they buy or on the services they need.  Charging taxes on accounting and legal services puts the consumer at a huge disadvantage to a business that has in-house staff to do their accounting and legal work because they don’t pay taxes on that service.  If a person needs services they all become more costly.  For example, legal help today causes people to hesitate before they access it because of cost and adding taxes to it just makes it more expensive and the consumer so less likely to get help they need.  There are other services that people will not use because of the added cost.
    Getting a $500 rebate given to everyone is NOT a good idea!  That will get spent once and the sales taxes are charged constantly year after year.  The difference in the proposed amount of the sales tax and the sales taxes we currently pay is not going to feel like a huge difference to me!

  • B Emmel says:

    January 30, 2013 at 5:04 am

    I don’t want to pay any more damned taxes either, but we have a state to run and we can’t afford to fall any further behind in education (both public and higher ed), in infrastructure and in developing strategies that will sustain us into the future. Right now we need revenue.

  • Phil Jarvi says:

    January 30, 2013 at 11:02 am

    I think Gov. Dayton should take a lesson from the community that voted down the $600K street light project.
    We just cannot afford more spending. We need to shrink the size of the state budget. We do not need to spend any more money.
    The public is really sick and tired of the tax and spend strategy.

  • C.M. says:

    January 30, 2013 at 3:36 pm

    Taxes on online purchases levels the playing field for businesses who have expenses of buildings and employees who are at a disadvantage when they compete with online sales.  It is a logical source of taxation to increase the state coffers.

  • Judith Daniel says:

    January 31, 2013 at 9:51 am

    I especially like the money going into jobs creation,and I like the budget overall. We can afford to pay taxes on some clothing(over $100) and the well off can afford higher taxes to live in a more civilized state. Business to business taxes are a good place to look for more revenue.

    We need to rebuild our education system and stop borrowing from its funding, and we need to keep our citizens healthy.

    The rebate to property tax payers maybe needs to be indexed to income and locality to be more fair.

    I like that this budget contains real solutions which can be built upon. We haven’t had this for a long time.

    Congratulations Governor Dayton.

  • Sanda Oslin says:

    February 1, 2013 at 2:42 pm

    I think it’s a pretty good idea, I’d like to see us go back to pre-Ventura income tax rates so we can get our students back on track….the Minnesota Miracle worked and we need to get back to it.  Our state has one of the highest tuition rates for public colleges and that is bad for all of us.  If our kids can’t afford college, our workforce suffers as does the future of Minnesota.
    People seem to have forgotten that our economy actually does better for everyone when our tax rates are higher.  Statistics and history show that to be true.
    Let’s get back to what Minnesota used to stand for…..an educated workforce and good standard of living, not just for the wealthy but for everyone.
    When we all do better, we ALL do better.