Different tax discussions at legislature have been healthy
Weíre probably going to be paying more state taxes starting July 1, we just donít know what kind and for what.
Iím not entirely opposed to that; the Minnesota Legislature has been playing games with honest budgeting for some time. We are spending more than we are taking in and apparently donít have the will to cut programs and services. If we are not willing to make that choice then we must pay more.
Some of the things the Democrats are proposing tax wise are things I have advocated previously to help solve the budget deficit, such as increasing the gas tax, which is a user tax, adding clothing to the sales tax mix and maybe going a little farther with sin taxes. The Internet sales tax just makes sense; why should a competitor to Target be able to sell you a widget on line for delivery to Minnesota and charge no tax when Target does have to charge the tax?
The discussion over various taxes has been healthy. It has been wide ranging with many options being discussed. Some ideas have been floated and then shot down, such as the business-to-business sales tax. It is clear that input from many has shaped legislatorsí opinions and that has been good. It has led to a better understanding of how taxes affect various people and businesses.
I have been concerned about income tax increases (believe me, I am a long ways from being affected by what is proposed, so itís not my wallet Iím worried about). My reason is that I think we need to be competitive with neighboring states, and we have to be attractive to big businesses that create a lot of high paying jobs. We could go back to 1999 rates on high incomes.
Some of what Democrats propose to spend more money on is probably a wash for most of us. They are proposing increasing school spending, which is a good thing. If they donít, weíll be faced with high operating levies, so we will pay anyway. Proposed funding levels will make it much easier for Minnewaska Area Schools to return to a seven-period day.
The same is true with the Democratís proposals on Local Government Aid. They propose a better formula that everyone can live with and putting some new money into the pot. LGA to the city of Glenwood and other Pope County cities has been cut over the past decade, Glenwood by over $200,000. Funding LGA will keep local property taxes from increasing as much as they might otherwise.
Nobody likes to pay more taxes, but it appears that much of what is being proposed to be enhanced with extra revenue makes sense. And so far it looks like the proposals truly balance the budget.
I also have concerns about minimum wage legislation. Iím not sure it is very productive. I can understand some increases but nowhere near the $10 plus that the Minnesota House has proposed.
There are some huge philosophical issues here. One is that in a capitalist economy people should increase their compensation by improving their skills to become more valuable to their employers. Employers should want this, and if they donít, then folks should move on to another job where they will be more appreciated. I think a high minimum wage will cause employers not to give people a chance to get started; they will be more inclined to spend a few more bucks and hire someone who will really produce rather than take a chance.
The second issue is that should every job be a living-wage job? There are a lot of jobs that are part time because they are seasonal or are the type a job a person already employed takes to supplement an income. Whatís the incentive to become educated or improve skills if every job pays a living wage?
The next nine days will be busy ones for legislators. The House, Senate and Governor have very different ideas of what taxes should be increased and how much. So far the Senate has been more conservative but weíll see. The other interesting thing is that since all are Democrats they will be arguing among themselves. Republicans are kind of on the sidelines on this one.