Patricia Mueller: Government should tighten its budget instead of taxing struggling Minn. families

Published 6:30 am Saturday, February 20, 2021

The governor’s budget proposal was presented last month and has been discussed in many of the finance committees in the House. Unfortunately, even as many are still struggling, Gov. Tim Walz wants to increase taxes on many Minnesotans, including taxes that will hit low-income families the hardest.

He has proposed $1.7 billion in tax increases, while including just 0.3 percent in cuts out of his $52 billion budget. This clearly shows that he doesn’t think that the government should have to respond to the economic downturn the way many Minnesota families have – by tightening their budget.

In his proposed budget, Walz seeks a 15 percent increase to Minnesota’s business tax rate, which brings Minnesota to the second highest business tax rate in the entire nation. As we have seen, the costs of raising taxes on businesses often gets passed along to the customer in the form of higher prices for products and services.

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The budget shortfall these taxes seek to solve was exacerbated by the governor’s extended business closures. It was important to learn how to respond to the virus at the outset, but the shutdowns and excessive economic restrictions went on far too long.

Businesses have a vested interest in protecting their customers and employees, and most have gone above and beyond to ensure safety for all. Raising taxes on businesses that have been hurting all year is simply adding insult to injury.

The governor’s proposed budget also gives Minnesota the third highest income tax rate in the nation, and in spite of the governor’s insistence that he is only taxing the wealthy, he raises regressive taxes on cigarettes and vaping products, which studies show impact low-income Minnesotans the most. 

As a matter of fact, according to estimates from Minnesota Management and Budget (MMB), over half of the governor’s $1.7 billion in tax hikes will impact Minnesotans of every income level, and many of them disproportionately impact low-income Minnesotans.

We are in the midst of an economic crisis caused by shutdowns during this pandemic, with many people still out of work or underemployed. Even if the economy seems to have started its recovery, this is not the time to raise taxes on the people who can least afford it. This budget would hurt job growth and hinder our economic recovery by taking more money out of your pockets to pad government agency budgets.

Our budget for the next biennium should focus on funding the services Minnesotans really need and fostering a stronger economic recovery instead of penalizing Minnesotans and maintaining government spending at historic levels.

If we target funding to the programs that we know work, we can trim what is unnecessary while maintaining the services that Minnesotans rely on.

Minnesotans have tightened their belts and trimmed their budgets, and it is time for government agencies to do the same.