Slides for regional policy meetings 5-10
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Slides for regional policy meetings 5-10
- 1. THE VOICE OF BUSINESS Regional Policy Meeting The time is NOW! • Introductions • What are your priorities? • Higher Ed and Workforce Needs • Tax Reform: Initial thoughts • Wrap-up
- 2. THE VOICE OF BUSINESS Your Policy Priorities • What can we work on to make Minnesota’s business climate more competitive?
- 3. THE VOICE OF BUSINESS Higher Education and Workforce • New hires and applicants • Current workforce • Coming trends in your industry
- 4. THE VOICE OF BUSINESS Tax Reform • It’s coming. • Governor Dayton’s focus: stability, more revenue. • The Minnesota Chamber’s focus: competitiveness Revenue Commissioner Myron Frans Photo: Howard Lestrud, ECM Publishers
- 5. THE VOICE OF BUSINESS Why Reform? • Globalization • Economy • Demographics • Innovation/ Technology • Minnesota Competitiveness
- 6. THE VOICE OF BUSINESS Why Reform? “Our recommendations…will transform MN into a global engine of economic growth and job creation….The sooner MN moves to gain the global competitive edge, the more quickly all Minnesotans can reap the benefits of job growth and economic expansion.” Governor’s 21st Century Tax Reform Commission
- 7. THE VOICE OF BUSINESS A Starting Point… • Expand the sales tax base to include more consumer-purchased goods and services • Decrease the sales tax rate • Decrease or eliminate some business taxes • End result = revenue neutral
- 8. THE VOICE OF BUSINESS Tax Reform Scenario - Assumes $2.1 Billion in Sales Tax Base Expansion FY 2014 Sales tax base expansion at 6.5% $2,100,000 Repeal state property tax ($820,000) 20% exemption for pass through income ~($150,000) Capital equipment up front exemption ($92,000) Exempt technology inputs from sales tax ~($200,000) Reduce corporate income tax rate to 7.0% ($250,000) Sales tax rate cut to 6.0% ($534,000) Low income tax credit ($50,000) Total $4
- 9. THE VOICE OF BUSINESS Option #1: Broad Consumer Sales Tax Base Expansion (~$2.1B) Food Fem. Hygiene Prod Tickets to MN Zoo Funeral services Clothing Caskets & Vaults YM/WCA & JCC Other pers. service Prescription Drugs Publications Inst. Meals Inv. counseling OTC Drugs Textbooks Fundraising sales Brokerage fees Medical Devices Res. Heating Fuels Artistic events Car repair Eyeglasses Res. Water Service School events HH goods repair Baby Products Sewer Service Pers. care services Elec. equip. repair
- 10. THE VOICE OF BUSINESS Option #2: Moderate Sales Tax Base Expansion (~$1.4B) Food @ 3% Fem. Hygiene Prod Tickets to MN Zoo Funeral services Clothing Caskets & Vaults YM/WCA & JCC Other pers. service Prescription Drugs Publications Inst. Meals Inv. counseling OTC Drugs Textbooks Fundraising sales Brokerage fees Medical Devices Res. Heating Fuels Artistic events Car repair Eyeglasses Res. Water Service School events HH goods repair Baby Products Sewer Service Pers. care services Elec. equip. repair
- 11. THE VOICE OF BUSINESS What do you think? • Willing to support expansion of the sales tax base to get lower rate, business tax cuts and more stable tax revenues? • Which business taxes to target? – Property tax (state or local) – Income tax (personal or corporate) – Sales tax
- 12. THE VOICE OF BUSINESS Thank You! ? • Questions? • Join the Minnesota Chamber and the Small Business Policy Committee! ’s
Editor's Notes
- Handouts available: 2012 session Scorecard.
- according to 2010 tax revenues, 40 percent of dollars came from the property tax, 33 percent from the income tax and 27 percent from the sales tax.
- The Chamber has spent 2+ years looking into the issue of tax reform. We want to show you what we think a good starting point looks like, and see what you think of it.
- This shows what we could lower if we expand the sales tax base at a rate of 6.5%. All numbers in thousands so net total = $4,000. Revenue Neutral.
- As of 2010 this expansion is estimated to bring in $2.1 billion in FY2014, the amount necessary to do everything described in the previous slide.
- This option would bring in about $1.4 billion in FY2014. It could be more politically palatable; it also shows that the big ticket items are food and clothing.