Monday, April 27, 2009

Flatten the tax

Across the United States many state governments are dealing with fiscal shortfalls. In a knee jerk reaction the decision is overwhelming a raise in taxes. In Minnesota the Senate is looking to create a 4th tax tier while increasing the tax rates of the other three. When people are struggling to make ends meet, housing prices plummeting, unemployment rates raising, and runaway inflation just around the corner, why then are so many governments looking to raise taxes?

The cigarette tax just went up more than $0.50 a pack and discussion at the Minnesota State Capital is to increase it again. Really? We all understand that smoking is not a healthy vice. The purpose of the original tax, which just went into effect, was to raise tax while making it less economical for the youth. The proponents of tax increases, especially on cigarettes, will have diminishing returns. Sure, the state will reap a short term gain. Is the short term gain really the type of tax system we want?

NO!!! The trouble with Congress, both state and nationally, is the focus on short term goals. I agree we need a change and increasing taxes is not the change required. It is time to scrap the current tax code and replace with a flat tax. The reason why more taxes are being sought is due to Government becoming too large.

Minnesota Legislature is going to drive business from the state and discourage the wealthy from staying in Minnesota by implementing a 4th tier tax rate. The focus of the debate will be on partisan politics as Gov. Pawlenty has warned the state legislature that any tax hike would be met with a veto. When will the DFL party wake up and realize that taxing Minnesotans more will only make Minnesota less attractive to future investment while driving our young to other states where they can keep more of their money.

Representatives and Senators of Minnesota do something brave and implement a flat tax that encourages business development and puts Minnesota in the lead of attracting top talent – business and personnel – for years to come.