When Gov. Dayton vetoed the Republicans’ tax conformity bill, Gov. Dayton complained that Republicans didn’t “punish” corporations enough. Now, they’re spinning the veto by promising “software, forms and everything else Minnesotans need to get their state taxes done will be ready in time.” That’s not all. Cynthia Bauerly, the commissioner of the Minnesota Department of Revenue promises “there won’t be a bigger state tax bite.”
That’s easy for her to say. She’ll have another job by the time Minnesotans file their taxes next year. What’s important is that Commissioner Bauerly’s statement is verifiably false. People with higher incomes who itemize will pay more in taxes. That’s been proven in every state in the US.
What’s also proven is that the Dayton administration is filled with cronies who are political hacks. Why should I trust Commissioner Bauerly, especially when she says something that she can’t be held accountable for? What’s going to happen to her if she’s caught lying next April? By then, we’ll have a Republican governor and a new commissioner. She’ll likely have a lucrative job in the private sector.
In early April, Ms. Bauerly wrote this op-ed in which she said “In his March 25 commentary, John Spry asked if the governor’s tax plan would mean a tax cut for Minnesotans. Let me answer: It does. Over 2 million Minnesota families and many small businesses and farmers will see a tax cut under the Governor’s plan.”
First, it’s important to know that Professor Spry is the leading tax economist in Minnesota. In his op-ed, Dr. Spry wrote this:
Gov. Mark Dayton is proposing a $1.4 billion tax hike over the next four years, according to his official 2018 budget documents. But he is incorrectly telling the people of Minnesota that his tax hike provides “tax cuts for over 2 million Minnesotans.” This difference occurs because the official budget documents include all of his tax proposals. In his public statements, he brags about selected parts of his tax plan, while omitting some big tax increases from his calculations. He proposes increasing taxes on Minnesotans by reinstating the 2 percent tax on everybody’s medical bills that is scheduled to go away. This tax hike raises about $999 million per biennium in tax revenue beginning in 2020, according to his budget documents.
Gov. Dayton also proposes more than $30 million a year in additional business-to-business sales taxes on software used in data centers. There are also other assorted business tax hikes in his budget. Consumers would pay these business taxes through higher prices. Workers would pay through lower wages and reduced employment opportunities. Investors would pay through lower rates of return.
In other words, Commissioner Bauerly omitted some important things. She omitted some important things because Gov. Dayton tried playing games by putting together a bill that included tax increases. Then he put together a bill that cut taxes. When Commissioner Bauerly says that Minnesotans won pay more in taxes next April, why shouldn’t we think that she’s being dishonest? Why shouldn’t we think that she isn’t being fully truthful?