|
Friends and neighbors,
I hope that you were able to spend a relaxing Easter with loved ones. The State Legislature has reconvened in St. Paul, and I would like to give you an update about some important new bills pertaining to taxes and fraud.
While you cut your checks this tax season to the IRS and the Minnesota Department of Revenue, we are hearing Democrat bills to further increase taxes.
This week, Rep. Aisha Gomez (D-South Minneapolis) introduced "Wealth Tax" legislation (HF4616) in the Taxes Committee. The bill would establish a 1% tax on individuals and trusts on all "taxable wealth" exceeding $10 million (with a situs in Minnesota). In other words, the State would force taxpayers to add up all of their assets located in Minnesota (cars, homes, businesses, property, retirement accounts, etc.) and if it’s over $10 million, you would have to pay an extra annual tax on everything you already own above that threshold. If passed, Minnesota would be the first state to implement one. Many Americans would celebrate a tax of this nature on the wealthy, forgetting that the first federal income tax was also marketed to the public in the same way. However, it did not take long before income taxes were expanded to affect us all.
California is also proposing a Wealth Tax, but it is on wealth over $1 billion, not $10 million. We are already seeing billionaires flee California, and I can't imagine what would happen to Minnesota under this bill. This could greatly affect farmers, small business owners, retirees, and others. I doubt they would stay in our state to fight the MN Department of Revenue about the valuation of their personal or business assets.
One of the primary reasons that I decided to run for the State House is that I am deeply concerned about Minnesota's accelerating economic decline. Businesses are packing up and leaving the Twin Cities, tanking commercial property values, and leaving the rest of us on the hook to cover the accompanying revenue losses for the state government. With the seventh highest tax burden in the nation, Minnesota's economically illiterate tax and regulatory policies over the last decade are primarily responsible for this, and this Wealth Tax is no different.
Reasons why a Wealth Tax is a dangerous direction for Minnesota:
- Unconstitutional – Even if passed, the concept of confiscating the possessions of individuals goes against private property rights and would likely be struck down in court.
- Capital flight – Wealthy Minnesotans are already fleeing in high numbers to more tax-friendly states. This would accelerate the trend, leading to further erosion of our tax base, and higher taxes for the rest of us.
- Volatility – By taxing an asset that has not been sold, there is no way to know the actual market value of the asset. This would lead to prolonged legal battles between individuals and the state regarding assessment values, and require thousands of auditors.
- Expropriation – This law will force many to sell assets that they already own in order to keep up with the Wealth Tax. This will especially impact operators of large family farms, who may own land assets of great value, but do not make enough annual profit to pay the proposed tax.
- Future investment – Since 2020, Minnesota has already lost out on $6.6 billion in capital investment to more competitive states. Why would anyone invest in Minnesota if they know that their asset will be taken from them upon achieving success?
Click HERE to watch my statement in committee regarding the Wealth Tax bill.
Earlier this year, the Office of the Legislative Auditor (OLA) released a disturbing report, which found that, while under audit by the OLA, employees within the Department of Human Services (DHS) had forged and backdated documents relating to fraud within Minnesota's behavioral health services.
During a Fraud Committee hearing this week, we had the opportunity to hear testimony from OLA staff regarding their findings, and we also questioned DHS Commissioner Shireen Gandhi regarding the steps she has been taking to re-instill accountability within her organization. I was specifically interested to know what actions DHS is taking regarding each of the OLA's findings, along with asking for an update on the criminal investigation regarding this issue.
Click HERE to watch my questioning of DHS Commissioner Gandhi.
For real change to occur, there needs to be real legal and financial accountability for state employees who mismanage our money. I will continue to advocate for the passage of the bipartisan Office of the Inspector General bill and other fraud prevention bills. These bills should be the number one focus of the Minnesota Legislature this session.
|
