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In 2009, Rep. Ann Lenczewski, then as now the House Tax Committee Chair, introduced sweeping tax reform. Here’s what she told MPR about her proposal:

“This bill proposes the most significant tax overhaul in 20 years,” said the bill’s chief author Rep. Ann Lenczeswki, DFL-Bloomington.

In addition to the tax hikes, Lenczewski’s bill removes a variety of tax breaks for homeowners and businesses. Charitable contributions, the mortgage interest tax deduction and the property tax deduction for homeowners are eliminated and replaced with a tax credit based on income. The bill also eliminates several business tax breaks, like the Research and Development credit and parts of the governor’s JOBZ program.

Lenczewski said she wants to clean up the state’s tax code.

“Which is to sweep the tax code clean of all of the preferential treatment and subsidies and things we can’t afford anymore and instead bring a fairer, more progressive income tax to Minnesotans based on the ability to pay,” she said.

Here’s an itemized list of the tax increases included in Rep. Lenczewski’s bill:

  • Cigarette Tax: $204 million tax increase
  • Alcohol Taxes: $209.1 million tax increase
  • Boats, ATVs & Snowmobiles: $10.5 million tax increase
  • iTunes Tax: $3.17 million tax increase
  • Gift Tax: $20.6 million tax increase

Compare that with Gov. Dayton’s tax proposal. Gov. Dayton is proposing a major cigarette tax increase and a major change in the sales tax system. Here’s what Sen. Bakk said about the alcohol tax increase at the time:

Senate Taxes Committee Chairman Tom Bakk, DFL-Cook, said eliminating the current mortgage interest deduction could hurt Minnesota’s high rate of home ownership and higher alcohol taxes would drive some liquor shoppers across the Wisconsin border.

Whether we’re talking about raising the alcohol tax or the cigarette tax, the outcome is predictable. People will change their shopping habits to avoid the additional tax. That isn’t opinion. That’s verifiable fact. In state after state where the cigarette tax was increased, revenues dropped because people drove to a state where the tax was cheaper.

What’s telling is that Sen. Bakk, who thinks he represents the metro suburbs instead of the official district he was elected to, isn’t saying a thing about Gov. Dayton’s tax increases. Presumably, he knows better than to cross the ABM wing of the DFL.

Sen. Bakk was right in 2009. That’s what makes his silence this year that much more deafening.

2 Responses to “Gov. Dayton, Rep. Lenczewski vs. Sen. Bakk”

  • Nick says:

    The DFLers should legalize sunday alcohol sales (only up to 3.2 Alcohol By Weight is currently allowed on Sunday) instead of raising taxes on alcohol. And yes, I’m sick of those liquor store owners that want a day off on Sunday. No one is going to force those liquor store owners to open on Sunday. By the way, Minnesota is only of one of 12 states in the country to ban hard liquor sales and one of only five to ban wine sales on Sunday. Sunday Alcohol Sales bans are a relic of when Prohibition just ended and it just doesn’t make sense in the 21st century economy.

    “Senate Taxes Committee Chairman Tom Bakk, DFL-Cook, said eliminating the current mortgage interest deduction could hurt Minnesota’s high rate of home ownership and higher alcohol taxes would drive some liquor shoppers across the Wisconsin border.”

    For the second part of the sentence, it won’t be just some, but many! Most of MN’s population lives in the Minneapolis-St. Paul and Duluth Metropolitan Statistical Areas. Each area in both MSA’s are an hour or less away driving to Wisconsin. This means that if the people that live in these areas want to buy alcohol on Sunday and will also do so if the alcohol taxes are raised. They will drive to Wisconsin not just to buy alcohol, but also gasoline and groceries. An increase in the alcohol taxes will affect everyone except for the alcoholics, since alcoholics will drink no matter what the price of alcohol is.

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