Sen. Dan Hall: Dayton's Attempt to Tax Rich Hurts Small Business

The following is a column from Sen. Dan Hall, D-District 56. An excerpt:

The Governor’s Tax Plan 

Laws are, too often, the bluntest, most indiscriminate, and least satisfactory way to address a need. Policy-makers cannot craft a law that adequately addresses every legitimate exception. 

The indiscriminate breadth of law is displayed in the Governor's proposed tax increases. The Governor says that he wants to tax high-income earners. Yet, in his attempt, he endangers 90% of Minnesota’s small businesses who (because of broad public laws) are reporting business expenses and earnings thru individual income tax returns. 

The Governor's tax expansion plans have elicited opposition from a wide swath of our community. The following sample of local individuals and interests have told us they don't want to be taxed more by Governor Dayton. The YMCA, local units of government, the folks that take care of Fido (a.k.a. the veterinary), realtors, daycare providers, the folks that service your car.... The list goes on.

Consider this message delivered by one of our District 56 neighbors: 

"Our family runs a business that does close to $100 million in sales and employs 50+ people in our district. 90% of our business is with out-of-state clientele. We did an analysis of the economic impact of having to compete with businesses in other states that do not have to pay the proposed sales tax. Our conclusion was we have three options: 

1) Pass on the tax to customers and go out of business (the tax is more than our profit margin), 2) absorb the tax and lay off many workers and have no net profit, or 3) move our headquarters out of state. We have been good corporate citizens. In fact, combined corporate giving to Minnesota-based charities since 1999 has totaled $2,218,550. If we are forced to move—isn't it realistic to expect that our corporate giving moves with us?" 

Some contend that Minnesota-based businesses that compete nationally and internationally should be taxed differently due to the tax advantages of their out-of-state competition. That argument makes some sense to me—but it doesn't do anything for most small businesses, the YMCA, daycare providers, or others.