Priorities must be paid for
The Senate Tax Committee heard a number of bills this week aimed at granting tax credits or exemptions to certain groups of people. I agreed with the theory behind many of these bills. Who wouldn’t want to grant an extra tax credit to certain veterans, or provide an upfront sales tax exemption to small businesses to help them navigate a difficult economy?
I’m supportive of these measures if they’re linked to a mechanism to pay for the new tax break. But that’s the key: It’s a legislator’s responsibility to propose a way to pay for ideas if they’re serious about getting them passed. Unfortunately, none of the bills this week came with a way to pay for their implementation even though, if enacted, they’d cost Minnesota an estimated $445 million.
Granting someone a tax exemption–no matter how worthwhile it may be–ultimately means less money the state is collecting. When Minnesota is facing a $1.1 billion future deficit and owes schools $2.4 billion in back payments, it’s simply irresponsible to propose an idea that takes more money out of the state without also proposing a way to fill that hole.
Committing $445 million to veterans and small businesses might be a good idea but, without proper funding, it’s asking us to take money straight out of the pockets of school children around the state. Minnesota’s first priority needs to be paying back the $2.4 billion we owe schools; any new money we commit simply means the longer schools will have to go without proper funding.
In contrast, I presented my Jobs Bill to the Senate Jobs Committee this week, which aligns with Governor Mark Dayton’s plan for creating jobs in this state. Part of that plan is a $3,000 refundable tax credit to employers who hire unemployed Minnesotans. Unlike the Republican plans that came forward this week, we pay for this tax credit by proposing to close corporate tax loopholes that allow big businesses to circumvent Minnesota tax obligations. In fact, tax proceeds raised from this common-sense tax enforcement would bring more money into the state than the jobs program would cost.
I am very hopeful that Republican legislators realize the importance of paying for our priorities. Simply closing the corporate tax loophole would allow us to responsibly invest in many important priorities that could help thousands of Minnesotans.