Democratic Governors Consider Sales Tax Decreases
- Jan 29, 2013 | Gail Cole
If several Republican governors in the nation are considering decreases in income and corporate taxes in favor of sales tax increases, at least two Democrat governors are considering just the opposite: increasing income taxes and dropping sales tax rates.
- Raise the income tax to 6.25%;
- Double personal exemptions;
- Eliminate itemized deductions;
- Repeal the candy and soda sales tax exemptions;
- Raise the cigarette excise tax by $1 (to $3.51 per pack); and
- Decrease the general sales tax to 4.5%.
Governor Mark Dayton (D) of Minnesota has also proposed reducing the sales tax rate in FY 2014-15. He would cut the tax from 6.875% to 5.5% and eliminate numerous exemptions. At the same time, he would expand the sales tax to include a number of business services. His blog touts that the proposed action would be "the largest reduction to the state sales tax rate in Minnesota history." Under his plan, income taxes for higher earners would increase by 2%.
The proposed budgets of both Minnesota and Massachusetts are sparking controversy, as budgets often do. Republican lawmakers in Minnesota criticized the governor's plan; Senate Minority Leader David Hann (R-Eden Prairie) pointed out that "[t]here's a host of things that are going to be taxed in Minnesota that were not taxed before." In Massachusetts, "[l]egislative leaders reacted cautiously." And House Minority Leader Bradley H. Jones called the administration's method of taxation as a means toward revenue "reckless."
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