How the Democrats tax proposal affects Minnesota
On Monday, Sept. 13, House Democrats released their tax proposal, which is supposed to pay for their $3.5 trillion spending plan. Among other things, the proposal raises the corporate tax…
Today Minnesota Management and Budget released their biannual Budget and Economic Forecast. The state’s economist projected a $1.332 billion state surplus, and that’s after sending $284 million to the budget reserves.
Why it’s good news: This means the economy has been growing, largely due to pro-growth tax cuts at the federal level, aka the Tax Cuts and Jobs Act.
Why it’s bad news: Taxpayers have been sending more of their hard-earned money to state government than is required to fund the (already bloated) budget. Tempting politicians with a bunch of “extra” cash is never good for fiscal restraint.
Economist John Phelan explains more in the video below:
In response to the surplus announcement, Phelan released the following statement to the media:
“We can attribute this budget surplus to economic growth driven by federal tax cuts. This shows again that pro-growth policies are more effective at generating revenue than confiscatory taxes. There is absolutely no argument for tax increases with such a large surplus.
“This doesn’t mean lawmakers should go on a spending spree. Weakening manufacturing indicators driven by federal trade policy, coupled with slower employment growth, shows that we cannot take economic growth for granted.”