Taxes on clothing, over-the-counter drugs, and even dance lessons and tattoos could be back in play at the Capitol as Minnesota Senate DFLers continue to look for ways to raise revenue and reform the state’s tax system.Why now? Well, some legislators just can't give it a (ahem) rest, so to speak:
The Senate plan, released Thursday, resurrects pieces of a controversial tax proposal abandoned earlier this year by Gov. Mark Dayton. It would broaden the sales tax but also lower the overall rate to its lowest level in decades. Corporate income taxes would be trimmed, and the plan includes a yearly rebate for lower-income Minnesotans hit hardest by a clothing tax. Similar to a proposal in the House, the Senate package has a sports memorabilia tax to help pay the state’s share of the new Minnesota Vikings stadium.
“We think his [Dayton’s] policies and principles were absolutely in the right direction. They were bold and thoroughly vetted,” said Sen. Ann Rest, a New Hope DFLer who is chairwoman of the Senate Tax Reform Division. “We hope to convince him this is the right time for reform and that Senate Democrats will stand firm with him in going that direction.”As usual, the proposal includes the sort of "we'll throw you a bone" approach that pretends to help people, but really doesn't:
Unlike Dayton’s proposal, the Senate plan would tax all clothing purchases, not just those over $100. To ease the pain, the state would spend $66.9 million on the income tax credit for lower-income families. A family of four making $44,000 a year would get about $60 a year. The credit would shrink as family income rose.Do ya think that $60 will help a family much? Suppose you buy the kids four new outfits apiece for school and the total cost of this outlay is $500, which isn't an unreasonable expectation. If you figure the tax at about 6%, and it will most certainly be more in the metro, that would be $30. Now if Mom and dad buy anything for themselves, the other half of the $60 is gone. And since most people in the metro make more than $44,000 a year, this is going to be a good sized hit to most family budgets. And if you're a young single hipster on the make, Rest would like a word with you, too:
To make up for the lost revenue, those who buy online goods, custom software, and box seats and suites at pro sporting events would have to pay sales tax. Clothing consumers would pay an additional $541 million in sales taxes over the next two years.
Other new tax targets: tattoos, dating services and personal lessons, such as those for dancing, golf or tennis.When it comes to taxes, all Minnesotans can expect a personal lesson.