29 February 2008

Angry About Minnesota's Latest Tax Increase?

The Minnesota Senate and House recently overturned Governor Pawlenty's veto of a bill that increases the current state gas tax by 42.5% by 2014, removes the caps on license tab taxes, adds a new $20 excise tax on motor vehicle purchases, increases existing motor vehicle rental taxes, increases the sales tax in the seven county metro area (Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, and Washington) by 0.25%, and allows outstate counties to impose an additional 0.5% sales tax.

There is a $25.00 offsetting gas tax credit. Single individuals earning less than $22,390.00 per year, or married individuals earning less than $32,720.00 per year, would be eligible. One would not need to own or lease a car to qualify for this "gas tax credit," so it has less to do with offsetting the impact of the gas tax increase for those who are saddled with it, and more to do with redistributing wealth.

But there does appear to be an opportunity for those in the seven county metro to stop the additional sales tax in their respective counties. The 0.25% sales tax increase will not go into effect in counties where that county's County Board rejects tax. If enough of us in the metro area let our commissioners hear how displeased we are with this new tax, then we may be able to spare ourselves from one of the new taxes. Minnesota Majority has a page with the contact information for all of the county commissioners in the metro area.

I have heard some people mentioning that a 0.25% increase to the sales tax is no big deal. It's only an additional dollar out of our pockets for each $400.00 that we spend. That's true, but that doesn't make it chump-change either. It hits low-income and fixed-income Minnesotans the hardest, and if you look at the taxable sales in the metro area, the money generated would be what the Democrats would label as "windfall profits" if it was to be done by private enterprise. Look at the following:

Source: Minnesota Department of Revenue - 2006 Sales and Use Tax Revenue by County
That's over an additional $88 million taken from just seven counties with just one of the newly imposed taxes. And when one considers the fact that the new gas tax is going to increase the cost of anything that is moved over the road (which is how just about everything that is sold is moved), the taxable sales should at least remain constant, even if Minnesotans limit their spending to offset government greed.

If you are in one of the above counties, be sure to contact your commissioner to express your displeasure at being gouged for more of your hard-earned money to build an overpriced light rail line between two cities that most of us will rarely (if ever) use, and to help cover existing mass transit that fails to even come close to paying for itself annually. If we don't speak-up now, we can all but guarantee that we will be paying millions of dollars more to the state each year.

It's interesting that the DFL (Minnesota's Democrat Farmer and Labor Party) increased taxes under the guise of being responsible. Instead of cutting state spending and living within their means, they have forced that responsibility on the average citizen. Joe Sixpack will need to cut his family's budget so that the "responsible" DFL majority doesn't need to be inconvenienced by cutting the pork out of their state budget.

Our Minnesota Government: Extortion You Can Vote For!


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