Gov. Dayton, the DFL and their puppeteers with the Alliance for a Better Minnesota have been telling people that the sales tax increase they’re preparing to pass this session won’t negatively affect the middle class or the working poor. This report from the Minnesota Department of Revenue indicates otherwise.
According to the Department of Revenue report, the proposed sales tax is projected to collect $198,700,000 from auto repairs in 2014-15. “The rich” don’t pay that because they often trade their vehicles before their warranties expire. That means the vast majority of that $198,700,000 tax increase will be paid by the middle class and the working poor.
Another situation where the middle class will get hit with a sales tax increase is the area of personal services. According to the Minnesota Department of Revenue’s projections, they’ll collect $107,600,000 in sales tax revenues from barber shops, beauty salons, nail salons and from body piercings and tattoos. What’s the likelihood that “the rich” will pay a significant percentage of those taxes? I’m betting it isn’t likely that “the rich” will pay a significant portion of that tax increase.
The DFL isn’t telling anyone that their sales tax increases will drive up property taxes on smaller cities. Imagine the outrage that people will express when find out that their cities (think Sauk Rapids, Sartell and similar-sized cities) will get charged sales tax when their city hires an auditor or a city attorney.
Some cities will have their sales tax bill double. Read that again. That isn’t a typo. Some cities’ sales tax bill will double as a direct result of Gov. Dayton’s sales tax proposal. Those cities won’t have an option that doesn’t include either massive budget cuts or massive property tax hikes.
Comparatively speaking, cities getting LGA won’t get hurt that bad by the DFL’s sales tax expansion. That doesn’t mean they won’t get hit by this tax increase. Whenever the DFL has the legislature, one thing’s always worth keeping in mind. In 2007, Rep. Cy Thao made this epic statement:
“When you guys win, you get to keep your money. When we win, we take your money.”
I don’t see any proof that the DFL’s mindset has changed since 2007.