Neither version of tax bill sits well with GOP

MARSHALL – Calling it an “assault on Minnesota taxpayers,” District 22 Sen. Bill Weber said Friday the Minnesota Senate’s tax bill unveiled earlier this week will result in all Minnesotans paying more with few seeing any real benefits.

Senate leaders say the plan released Tuesday would raise more than $1.8 billion through tax hikes on income, business property and tobacco. In an attempt to close a $627 million budget deficit, the plan would also hit a larger number of taxpayers than what Gov. Mark Dayton has proposed. The state’s top tax rate would rise from 7.85 percent to 9.4 percent on taxable income of more than $140,960 for couples and $79,730 for individuals. The sales tax would also extend to cover things like clothing, consumer services and digital downloads while lowering the state’s sales tax almost a full percentage point to 6 percent.

“I have people say to me, ‘Well we’re raising the income on the top 1 or 2 percent of wage earners,’ when the reality is the bill raises income taxes on single payers between $79,000 and $80,000 and joint filers earning about $140,000. Now, those are good incomes, but it’s far below the 1 or 2 percent they originally talked about,” said Weber, R-Luverne. “In addition to taxes, in the Health and Human Services bill, they’re looking at raising fees on a lot of nursing homes and on professional services people provide. Everyone is going to pay more.”

It has been hinted that some Democrats in the Senate are wavering in their support of the bill. A similar situation exists in the House, where four Democrats voted against a $2.6 billion tax bill that includes the state’s first alcohol tax increase in more than two decades.

“At the end of the day, hard-working taxpayers are gonna pay more,” Rep. Chris Swedzinski, R-Ghent, said. “This isn’t about some guy you’ve never met who lives in a mansion up on a hill. There’s only so much money you can extract. We’ve been saying this for years – if this doesn’t work, then go to the next group of people.”

The House bill’s proposed income tax hikes, likes the Senate’s, zeroes in on the state’s top wage earners. The proposal calls for a new 8.49 percent rate on income of more than $400,00 for couples and $226,000 for individuals and would add a 4 percentage point surcharge on incomes of more than $500,000.

But Swedzinski fears the proposed taxes could, over time, start to hit a greater number of people who aren’t currently included in the top tier.

“All of a sudden you have people making $10,000 paying more taxes,” he said. “That’s why even on the Democrats’ side there’s some angst.”

Swedzinski said a prolonged period of time in-between a tax hike doesn’t justify a rate increase.

“If that’s your justification for doing something, it doesn’t hold much water in my book,” he said. “That was originally supposed to be a temporary tax.”

Swedzinski said he is especially concerned about border cities and how all the proposed tax increases would affect their Main Street economies.

“In some of these border towns, you have people that may not even be doing their shopping in Minnesota,” he said. “If you lose one or two businesses in a district, that 10 to 15 jobs apiece. It’s bad for a small town. People are worried about what’s gonna get hit and how hard it’s gonna get hit.”

Weber, too, said he’s not a fan of a tax hike in alcohol sales. He worries that small-town liquor stores whose profits help support local projects and budgets will feel the brunt of a tax hike.

“It’s ludicrous the number of taxes they are going after,” he said.