I've heard infinite versions of "don't tax me'' or "taxing me or my customers more will destroy my business AND the economy'' in my decades under the dome. And last week's opposition at a House hearing to ending sales tax exemptions on business services was typical in many respects. Just because these fears often turn out unfounded _ our economy was performing better, in the 1990s, when taxes were higher _ doesn't mean these specific concerns shouldn't be heeded.
But I don't recall ever hearing as many tax opponents acknowledge, as they made their sincere case against losing tax exemptions on their own business, that our communities do need more revenue for public investment and for dealing with demographic challenges. Time after time I heard these business owners or their association leaders, who are also citizens, say that they supported or understood the need for more revenue, just "please, not on me or my customers, this time.'' And when all the opponents got through testifying, alternating one-for-one with those who favored the governor's plan, there were still more testifiers left who favored the reasonable increases in Dayton's plan, and the badly needed investments on the budget side, from early childhood education to transportation to workforce training. I didn't hear nearly as many angry diatribes against government and taxes in general as I've heard in previous years.
That consensus for more revenue comes through in the Star Tribune's Sunday poll, showing once again that a majority favor restoring higher income tax rates on the highest income margins, while opinion is evely divided on expanding the sales tax base to more consumer services. A clear majority opposes ending the exemptions for so-called "business-to-business'' services.
This consensus for "reasonably more'' actually is not new. Polls show support for revenue sufficiency was strong all through the 12 years of rule by one governor whose slogan was "give it all back'' and another whose central theme was "no new taxes,'' and legislative majorities that took the same hard and uncompromising line in 2011-2012. Especially after budget crises began recurring regularly in 2001 and beyond, polls consistently showed that most Minnesotans thought revenue increases ought to be at least part of the solution for budget shortfalls. That happened also to be the position of almost all former governors in all three parties through that period. And in almost every reputable poll I've seen, most Minnesotans think those who have been reaping almost all the benefits of increased productivity in recent years, and who have been paying a smaller percentage of their big increases in state-local taxes, ought to contribute reasonably more.
Dane Smith
As a service provider who would have been affected by this tax change, my primary concern is not with the dollars, but with the record-keeping. It's the complexity of the regulations, and the time I am forced to spend tracking all kinds of activities that detracts the most from my ability to be productive. By all means, let's raise more revenue but keep it simple. Tax laws are already far too complex.
Posted by: Robert Beck | April 13, 2013 at 05:31 PM