19A candidates respond to tax plan

ST. PETER – The three candidates for the Minnesota House 19A special election weighted in on the tax reform proposals presented by Gov. Mark Dayton on Tuesday.

Dayton’s proposal seeks to reduce the state sales tax rate from 6.875 percent to 5.5 percent while broadening it to cover previously untaxed services and goods like clothing over $100 and accounting services. A big change is pushing the recently sought extension of state taxes to currently untaxed online transactions, such retailers and digital goods.

The plan seeks to increase income tax for individuals making over $150,000 and couples making over $250,000 to a tax rate of 9.85 percent instead of the current top tax rate of 7.85 percent.

Other miscellaneous items include raising the cigarette tax by 94 cents, reducing the corporate tax rate from 9.8 percent to 8.4 percent and a $500 rebate on property taxes to home owners.

The proposal overall calls for a 7.6 percent increase in spending next biennium totaling $37.9 billion, $1.4 billion in property tax relief, $1 billion in new spending and $225 million in spending cuts. A $40 million increase in Local Government Aid is included.

Republican candidate Allen Quist objected to the proposal. He joked that because several Democrats objected to the proposal he may find DFL legislators actually willing agree with him on legislation if he is elected. He considers the proposal “dead in the water.” He opposes reducing the sale tax rates while broadening it because the rate has a history of creeping back up, leading to a net tax increase.

DFL candidate Clark Johnson said he is completely open to Dayton’s proposal, though he wants a more polished proposal with data about what the tax will impact by the time the legislation is brought to a vote. He is only interested in any kind of tax increase that will create long-term sustainability to the state budget.

Independence Party candidate Tim Gieseke said he was also open to Dayton’s proposal. However, he was skeptical on several items. He thinks a sales tax on clothing for only above a certain amount is impractical given that people and businesses will find a way around it. He might support it as part of an overall tax plan, but he would want to first thoroughly hear the business community’s viewpoint.

He was also skeptical about raising spending, though he would support it for paying back the state’s school funding shift.

(Josh Moniz can be e-mailed at jmoniz@nujournal.com)

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