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THE VOICE OF BUSINESS
Regional Policy MeetingThe time is NOW!
• Introductions• What are your
priorities? • Higher Ed and
Workforce Needs • Tax Reform: Initial
thoughts• Wrap-up
THE VOICE OF BUSINESS
Your Policy Priorities
• What can we work on to make Minnesota’s business climate more competitive?
THE VOICE OF BUSINESS
Higher Education and Workforce
• New hires and applicants
• Current workforce
• Coming trends in your industry
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
THE VOICE OF BUSINESS
Why Reform?
• Globalization• Economy• Demographics• Innovation/
Technology• Minnesota
Competitiveness
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
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
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
THE VOICE OF BUSINESS
Option #1: Broad ConsumerSales 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
THE VOICE OF BUSINESS
Option #2: ModerateSales 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
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
THE VOICE OF BUSINESS
Thank You!
• Questions?
• Join the Minnesota Chamber and the Small Business Policy Committee! ??’’ss
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