Dan Schoen Viewpoint: DFL delivered fairness, progress, transparency
I have great respect for my colleague, Rep. Denny McNamara, but the viewpoint he wrote for this newspaper ("'Tax the rich' means 'tax everyone,'" May 15) jumped the gun. The tax bill he criticized was still in the formative stage, and one of the things I learned is legislation is never done until the final gavel of the session. So I thought I would let readers know what was in the final bill.
Honestly, some of the concerns he pointed out were concerns I shared. I sit on the House Tax Committee, and I was able to bring those concerns and the concerns of the businesses and constituents in my district to the table. I am happy to say that the final product addressed many of those concerns.
It is simply false that all Minnesotans -- regardless of what tax bracket they're in -- will face income tax hikes as a result of this budget. What we did was address the fact that for years, corporate and wealthy special interests have been protected at the expense of the middle class in Minnesota. Our proposal increases tax fairness by closing corporate tax loopholes and asking the wealthiest 2 percent of Minnesotans to pay 2 percentage points more in income taxes. Income taxes were last raised in our state in 1991, and were then cut in 1999 and 2000.
The House plan also raises taxes on Internet purchases and cigarettes, but not sports memorabilia and alcohol, as McNamara claimed. The state is going to start taxing "Internet purchases," but we're doing that at the behest of the Minnesota business community. By taxing Internet purchases, we are leveling the playing field between brick-and-mortar and mom-and-pop businesses in Minnesota and online retailers. If you think this won't make a positive difference for our local businesses, ask Target Corporation or Best Buy how they feel about the proposal. Tax-free Internet businesses have really cut into their top line sales and bottom line profitability.
And, yes, we did raise the tax on cigarettes to $2.83 a pack - because we are trying to recover the billions of dollars the state spends on health care-related costs for smokers. These are costs that every Minnesotan pays, regardless of whether they smoke or not. Yes, that will make our cigarette tax 31 cents higher than Wisconsin's, so we may lose some business to our neighbor to the east. Long term, however, we expect that same cigarette tax revenue to fall since we are trying to discourage young people from starting smoking and to help more current smokers quit.
There is one word missing in McNamara's commentary: property, as in property taxes. Of course, I understand why he would not want to talk about property taxes. They absolutely skyrocketed in the past 10 years under the Republicans -- nearly doubling -- thanks in large part to the elimination of programs like the Market Value Homestead Credit.
This session, Democrats provided $400 million in middle-class property tax relief to homeowners, renters, cities and counties. This relief will help nearly 1 million Minnesotans through the Homestead Credit Refund, retooled renters' credit, and need-based aid to towns, cities and counties after years of cuts to local services such as police and fire.
And there's a reason we're raising revenue. We're eliminating our budget deficit and creating a structurally balanced state budget after a decade of deep budget cuts, dishonest shifts and accounting gimmicks. We're accelerating the payback to Minnesota's children after the previous Legislature borrowed $2.4 billion from our public schools across the state. We're making historic investments in education, from early childhood to college.
When Minnesotans elected a DFL governor, and DFL majorities in the House and Senate, people asked what they could expect this legislative session. Our answer was simple: Fairness, progress and transparency. No budget games and no gimmicks.
This session, we delivered on that promise, and I am proud to be part of it.