Racing in on the heels of last year’s $11 billion in state tax hikes, another $2 billion in new taxes were proposed yesterday by DFLers in the state House of Representatives. Not to be outdone, DFLers in the Senate unveiled their even-bigger tax-raising plan this morning. 

Democrats in the House have proposed a package of tax hikes and changes in the state’s tax system they term “structural reform.” By reform, they mean some people should pay more, not that the budget itself is being reformed.

 

In either plan, a big part of the money will come from an income tax hike. A new top tax rate of 9% - 9.25% for people earning $169,000 a year or more, or - under the Senate plan - $250,000 for married joint-filers will be created. This is anticipated to raise $467 million in new tax revenue.

 

In the House plan, another $1.5 billion will come from changes in the tax code like eliminating tax credits for education expenses, the gas tax credit (that was supposed to insulate the poor from last-year’s $6 billion tax hike), itemized deductions for property taxes, and deductions for mortgage interest and charitable contributions. The Senate took a more direct path: Raise income taxes in all income brackets for another $2.2 billion.

 

The plan will allow counties to permanently increase their local sales tax by an additional .5%, add a tax on gifts and tax digital music downloads.

 

Watch out, sinners. They’re coming to pass judgment and make you pay. Cigarette taxes, increased 75 cents a pack two years ago by the so-called “health impact fee,” and just boosted nearly $1 per pack by the federal government would get another hike of 54 cents per pack. Alcohol will get a tax-boost of a nickel per drink and a doubling of the receipt tax.

 

Outdoorsmen: get ready to pay more for your boats, ATVs and snowmobiles. The House DFL plan will charge a new sales tax on these purchases in hopes of raising another $10 million for the state’s coffers.

 

Everyone will be impacted in some way by the tax-hikes proposed by spend-and-tax liberals in the legislature. There is another way, but is anybody seeing it?