Tom Bakk on extending sales tax to clothing

State Senate Tax Committee Chair Tom Bakk is proposing including clothing under the state sales tax. It is a move that has been proposed in the past but has proved unpopular. The bill proposes the clothing tax be used to balance the budget, fund public schools and lower the overall sales tax from 6.875 percent to 6.625 percent, with another reduction 10 years later.

Comments (2)

  1. Submitted by James Hamilton on 03/16/2010 - 03:47 pm.

    Senator Bakk makes a reasonable case for broadening the base for the sales tax, but fails to mention one important reason to do so (a more stable tax base) and may not go far enough (failure to extend it to food as well).

    Increasing the base in order to increase revenues is perhaps not the way to resolve our current budget shortfalls, particularly on a promise of a reduced rate 10 years down the line. Broadening the base and reducing the rate, so that the overall impact is revenue neutral, may be worthwhile simply to stabilize sales tax revenues in a time of declining sales and the increasing number of internet sales which are not captured by our current system.

    I still don’t understand why the Legislature refuses to consider an income surtax as one means of addressing the budget shortfall, together with budget cuts. Is it that Gov. Pawlenty’s “no new taxes” pledge plays so well with the same electorate that doesn’t want its bdgetary oxen gored?

  2. Submitted by Paul Brandon on 03/16/2010 - 05:24 pm.

    The sales tax is the most regressive form of tax; particularly on basics.
    A sales tax on clothing would take a larger percentage of income from the poor than from the rest of us.
    Restoring income taxes to the 2000 level (pre Pawlenty cuts) would be much fairer.

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