Mark Dayton, Minnesota Governor, Calls For Tax Overhaul, Higher Rates For Wealthy

 Mark Dayton, Minnesota Governor, Calls For Tax Overhaul, Higher Rates For Wealthy

MINNEAPOLIS, Jan 22 (Reuters) – Minnesota would overhaul its  state tax system under a $37.9 billion two-year general fund  budget that Governor Mark Dayton unveiled on Tuesday.

The Democratic governor called for a drop in local property  taxes, an income tax rate increase for higher earners, a lower  corporate tax rate coupled with the closure of tax loopholes, a  cut in the sales tax rate, and a cigarette tax hike.

Minnesota would gain $2.13 billion from the tax changes,  allowing the state to eliminate a projected $1.1 billion deficit  in the fiscal 2014-2015 biennial budget, while increasing  funding for education, according to budget documents.

But Republicans, the minority party in the Legislature,  blasted the plan for increasing both spending and taxes.

“Get ready for more taxes,” Senate Minority Leader David  Hann told reporters, adding that services such as oil changes  and haircuts would be subject to the sales tax.

Under Dayton’s proposal, the sales tax rate would fall to  5.5 percent from 6.875 percent, while the tax base would be  broadened to include certain goods and services. For instance,  clothing is currently exempt from sales tax, but the revision  would tax clothing that costs more than $100.

Dayton and budget officials said that middle income  consumers could expect the sales tax changes to be a wash, with  the lower rate overall offsetting the broader base for the tax.

The income tax rate on single residents with taxable income  of $150,000 or more and married couples at $250,000 or more  would increase by 2 percentage points to 9.85 percent.

Minnesota’s corporate tax rate would fall to 8.4 percent  from 9.8 percent, but tax breaks benefiting some businesses  would be eliminated.

Property taxes would fall by $1.4 billion in the upcoming  biennium, which begins July 1, through increased state aid to  local governments and other measures.

Minnesota would join other states in overhauling its tax  system, including Massachusetts where the governor last week   proposed an income tax rate hike and a lower sales tax rate.  Nebraska’s governor proposed a plan to eliminate personal and  corporate income taxes, covering the lost revenue by ending  sales tax exemptions. Likewise Louisiana Republican Governor  Bobby Jindal called for ending the state’s income tax and  corporate taxes with sales taxes compensating for lost revenue.

California voters in November approved temporary hikes in  the sales tax and in the income tax rates for the wealthy.

Continue reading:

Mark Dayton, Minnesota Governor, Calls For Tax Overhaul, Higher Rates For Wealthy

Leave a Reply

Post Navigation

%d bloggers like this:
Donate Bitcoins: 14VqDxDzkhvktP5Q5ejnL4xJHARwbTpfDY
Buy VPN