11-16-2000 Agenda - Laserfiche WebLink

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TAX REFORM What is tax reform? • Changing the state and local tax system to improve fairness, taxpayer understandability, government accountability, and global economic competitiveness. Reform Goals • Accountable - Realign the state and local tax and spending structure to promote better understanding and control by citizens. • Modern - Update the tax system to better fit a modern, technological, globally competitive economy. • Fair- Make and keep the overall tax system fair for Minnesotans of all income levels. • Simple - Make the property tax smaller, simpler, and more local. Reform Principles • Be fiscally conservative and prudent - insist that projected budgets are balanced. • Do the right things - reform or eliminate programs if they aren't producing desired results. • Provide incentives - match responsibility and accountability at all levels. Reform Options • Property Tax-make it smaller,simpler, and more local by eliminating the use of the local property tax for the state mandated portion of K12 general education funding - Target state aid to shared state-local services, provide revenue diversification options - Simplify the property classification system - Target property tax relief to those with less ability to pay - Reduce the high share of property taxes now paid by businesses, seasonal properties, rental housing, and other properties that bear a disproportionate burden • - Improve the accuracy of property tax assessments • Sales Tax-broaden the base and lower the rate - Broaden the sales tax base to include more services and goods - Lower the rate to be more like other states - Eliminate sales tax on most capital and inputs used for business production - Reduce the complexity and the number of exemptions - Stabilize the sales tax by addressing e-commerce issues • Income Tax-simplify the calculations and lower the rate - Broaden the income tax base - Lower the rates - Reduce the number of special preferences that benefit only a few - Eliminate biases based on a taxpayer's filing status Key Measures • Total property tax as a percent of state personal income should go down. • Property tax rate on business, seasonal, and rental housing should go down. • State sales tax rate should go down. • Measure of overall tax burden by income (Suits index) should remain proportional. • Percent of state general education formula funded with state funds should equal 100 percent. Contact Information • For more information about the tax reform initiative, see our website at www.taxes.state.mn.us, email us at. taxreform(a7state.mn.us, or call us at (651) 297-1577. You can also write us: Reform Taxes; do Commissioner Matt Smith; 600 North Robert Street; St. Paul, MN 55146.