Bill to expand sales tax should be killed
Published 12:00 am Monday, February 12, 2001
Legislation that would expand the state of Minnesota’s sales tax to include more service areas needs to be quashed immediately.
Monday, February 12, 2001
Legislation that would expand the state of Minnesota’s sales tax to include more service areas needs to be quashed immediately.
Gov. Jesse Ventura’s proposal to slightly lower the sales tax rate and then extend it to services traditionally not taxed is short-sighted and problematic. Without in-depth investigation into the impact of state taxes on service, legislators and the governor have no idea of the possible far-reaching negative impact such taxes could have on some service-related business. Initial investigation and discussions suggest the negative impact on businesses would by far outweigh any potential tax benefit.
Many of the service areas not taxed now that would be taxed under the governor’s proposal compete against out-of-state businesses. The additional tax would burden Minnesota businesses as they compete against those businesses in say Iowa, the Dakotas or Wisconsin. In essence, the tax would drive business away, hurting the state’s economy and ultimately resulting in a further reduction of the sales taxes collected by the state.
Additionally, the bookkeeping nightmare of collecting taxes on services not taxed now would force businesses and the state to hire more people to oversee proper collection. Any gain in sales taxes would ultimately be wiped out by the need to create a massive administrative bureaucracy.
Finally, why during a time of budget surpluses are the governor and some legislators even considering expanding the tax base? The governor’s sales tax proposal isn’t about fairness, it’s about increasing the overall tax base of the residents of Minnesota and Minnesota businesses. Minnesotans don’t need to pay more taxes, they need to pay less. And Minnesota businesses don’t need more hurdles to attract customers and employees, they need help.
The governor’s sales tax proposal runs contrary to his quest to limit the tax burden on Minnesotans and to his intent to help Minnesota businesses compete in a global economy.
In the end this sales tax pitch should never have come to the table, but now that it is alive it needs to be quickly killed and buried.