Minnesota should make more sales tax reforms
When Minnesota cities and counties pay sales tax on purchases, the bill goes to local taxpayers. So cities, counties and those taxpayers will benefit beginning Jan. 1, when local governments no longer have to pay the tax.
With a state sales tax of nearly 7 percent, major or annual purchases – heavy equipment, vehicles, maintenance machines, office supplies – will cost less. For some counties, the savings could be in the millions.
We think it makes sense to reduce or eliminate government-on-government taxation, which is simply a hidden tax on citizens. At the same time, the state is not going far enough to reduce the overall sales tax burden nor to make it fair.
Sales tax reform should remain on the radar screen for state lawmakers. Why some items are taxed and others are not is beyond any possible definition of the word “just.” If the sales tax were broader, covering all transactions, it could be lowered. As the economy has shifted to service-oriented, a greater burden has fallen on purchases of goods. And state lawmakers carve out other exemptions for pet projects or constituencies.
No one really likes taxes; they are not ideal. But if they are going to exist, they should be rational. Cynics scoff and say the whole system is purely political, not reasonable. That’s true, but political decisions are driven by the advocacy of citizens, applying pressure on lawmakers. We hope citizens – and lawmakers – take note.