Minnesota Senate fights over clothing tax
The DFL-controlled Senate will take up its $1.9 billion tax plan this afternoon in what we expect will be a grueling debate that could last well into the evening.
Taxes Committee Chair Rod Skoe says the tax plan could help wipeout the state's deficit; Dayton won't support any hike on middle- or lower-income families.
Among the most contentious proposals: repealing the state's tax exemption on clothing.
If passed, the move could raise about $541 million in additional revenue, which would help curb the state's deficit. But eliminating the tax-free incentive won't come easy. Even if the Senate does approve the repeal, the House bill doesn't include it, and Gov. Mark Dayton says he wouldn't support any tax that would hurt middle- or low-income families, according to the Star Tribune.
The Senate's proposed changes to the sales tax system would also hit things like haircuts, tattoos, and car repair, while lowering the overall sales tax rate to 6 percent from 6.875 percent. Under the proposal, smokers could see a pack of cigarettes go up 94 cents, Politics in Minnesota reports.
One thing all Democrats in Minnesota seem to agree on: raising income taxes on the state's top earners. The Senate plan would raise state income tax on Minnesota's top 6 percent earners from 7.85 percent to 9.4 percent.