DFLers move bill to make Minnesota’s sales tax joint highest in America

Two weeks ago I wrote about a proposal from some DFL legislators in St. Paul to hike Minnesota’s state sales tax, with the revenue dedicated to housing programs. Now, the bill — SF 4022 — is here for our perusal.

Mercifully brief, the bill, authored by Senators Mohamed (DFL), Port (DFL), and Boldon (DFL), reads, in full:

Constitutional amendment proposal to increase the sales tax rate by three-eighths of one percent and dedicating the receipts for housing purposes; Creating a homeownership fund, a rental opportunity fund and a household and community stability fund

Two weeks ago, I wrote:

It is true that Minnesota, and the Twin Cities especially, have relatively expensive housing. That is because, by imposing excessive taxes, fees, and regulations, state and local government effectively makes affordable housing impossible to build. The solution is to lighten the burden of these taxes, fees, and regulations.

But the DFL never sees any problem that cannot be solved by throwing ever increasing amounts of your money at it:

Last session, the Legislature approved historic levels of funding for housing, but much of it was a one-time allocation for the 2024-25 biennium. Housing advocates want to see ongoing funding…

If the bill passes and Minnesotans vote to hike the state sales tax by 0.375 percentage points, it would give our state the joint highest rate of state sales tax in the United States, alongside that other beacon of sound tax policy, California, 7.25%.

Figure 1

That, of course, is before we get into the various local sales taxes which are being hiked. This state is, as someone said to me last week, “One Expensive Minnesota.”