The Senate tax chairman, who is running for governor, wants to tax clothing as a way to increase school funding and plug the state budget deficit.
Sen. Tom Bakk, DFL-Cook, introduced legislation Thursday to eliminate the sales tax exemption on clothing beginning July 1 and slightly lower the overall sales tax rate a year later.
“This is a bold plan that, if enacted, would repay schools more than $120 million … reduce our budget deficit by more than $257 million in 2011 and permanently reduce Minnesota’s general sales tax rate from 6.5 percent to 6.25 percent, saving taxpayers and business owners millions of dollars on purchases,” Bakk said.
For the current two-year budget, with a $994 million deficit, the added money would be used to balance the budget. After the current two-year budget, the new money would go to schools.
Republicans do not like the idea.
“Minnesota families are currently overburdened with excessive taxes and Sen. Bakk’s call for new tax increases is simply the wrong approach to jump-starting Minnesota’s economy," Senate Minority Leader Dave Senjem, R-Rochester, said.