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Health & Fitness

Smokin' Hot Tax Bill Not So Hot

State Republicans' tax bill doesn't benefit all Minnesotans.

The Minnesota GOP is quite proud of its "smokin' hot" tax bill that would reduce taxes by $200 million over the next three years. If I were them, I wouldn't get too cocky.

First off, the effect of the tax cut will be to delay replenishment of the state's reserve funds. Every family and every business knows the importance of setting some money aside for a rainy day. The state of Minnesota had its rainy days three years ago and again last year. The reserves are gone. Now that things are more stable, we need to start preparing for the next rainy day.

Also, some of the tax cuts are clearly out of line given our on-going economic problems. The Republicans are promoting the bill as promoting job creation and tax relief for all Minnesotans. However, the bill includes a freeze on property taxes for seasonal recreational properties. What? That's not about "all Minnesotans" or "job creation". That's about people who can afford to own seasonal recreational properties getting a break while the rest of us get nothing.

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The bill also gives property tax relief to homeowners faced with large property tax increases. Who's facing large property tax increases? People with large properties. The value of my house went down $10,000, but my property taxes went up $50. The Smokin' Hot Tax Bill isn't going to reduce my taxes, but it might help some people with million dollar homes.

And the last part of the bill that bugs me extends the tax increment financing district north of the Mall of America. That is some of the most valuable property in the whole state. Why on earth would we need to offer tax increment financing for that property? Tax increment financing gives money to the developer upfront which is then "repaid" by the increased property taxes on the developed property. Essentially, tax increment financing results in very little additional tax being collected even though the property is now much more valuable than before. 

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Tax increment financing should only be used for property that's especially hard to develop, such as run-down business districts and so on.  Using TIF for anything else is simply corporate welfare.

I encourage people to take a closer look at what the Republicans call "tax relief for all Minnesotans".  I know it ain't going to help me, and my guess is it ain't going to help you either.

 

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