This editorial in the Mesabi Daily News is spot on in its analysis of Gov. Dayton’s tax increase proposal:
It was unveiled at the end of January and found few, if any, friends. But it had a whole lot of enemies, especially in the business community, who pointed out quite accurately that the considerable new taxes would significantly increase the cost of doing business and therefore only be passed on to the regular Joes and Jills of Minnesota.
The governor could not make the case, from the outset, that his proposal to lower the overall sales tax and also corporate tax rates would, at the very least, cancel out the increases.
Simply put, Gov. Dayton’s plan was doomed. First, it would’ve hurt all Minnesotans. Second, it would’ve just added costs to consumer prices at a time when disposable income isn’t increasing. Third, Gov. Dayton got slammed by the business community for his anti-business tax policies. The business community’s opposition to Gov. Dayton’s tax policies, followed by Gov. Dayton’s tepid support for his own plan, essentially put this proposal on life support.
I disagree with this to an extent:
We gave the governor a good mark for being bold in the proposal. But his grade for its execution was a remarkable “F” — “D-” at best. It was so poorly thought out that he couldn’t rally DFL leaders behind it with even a hint of enthusiasm; nor could he have his own administration officials make it understandable to most Minnesotans.
I agree that Gov. Dayton’s tax increases weren’t well thought out. Subjecting kids who babysit or mow lawns to his sales tax was stupid and counterproductive. I disagree that Minnesotans didn’t understand Gov. Dayton’s tax increase proposal. I think lots of people understood it. It’s my opinion that Minnesotans rejected it because they simply didn’t like Gov. Dayton’s proposal.
Anyone paying attention knows that Gov. Dayton’s sales tax increase proposal faced a fierce lobbying campaign from the business community. What went largely unnoticed is the fact that cities and counties didn’t like the sales taxes against attorneys, engineers and other service providers. That was about to add hundreds of thousands of dollars to their cities’ and counties’ budgets annually.
That’s an extensive, though not exhaustive, list of reasons why Gov. Dayton’s tax increase proposal didn’t stand a fighting chance.