Tax talk shifts to income tax
Gov. Mark Dayton has given up his plan to expand the sales tax to business-to-business services, and to expand it to goods like clothing in exchange for a drop in the sales tax rate.
That puts the battle for the budget back to the issue of raising taxes on the wealthiest two percent.
Dayton would create a new tax bracket for single residents earning more than $150,000, or married couples with taxable income above $250,000.
Opponents say this would be a hardship on small business owners who pass their business earnings through their personal income taxes.
Dayton, with a DFL majority in the House and Senate, has the upper hand in this debate. But we hope he will listen to the other side, especially the small business owners and high income earners who can vote with their feet, moving themselves and their businesses out of state if tax increases drive them to it.
Dayton said, upon dropping his business service sales tax plan, that he cares about the impact state taxes have on jobs. We hope so.
If tax increases are ahead, and it’s hard to imagine they won’t come, there should be accompanying efforts to control state spending as well.