Taxing the wealthy - KTTC Rochester, Austin, Mason City News, Weather and Sports

Taxing the wealthy

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Rochester, Minn. (KTTC) --

During this contentious legislative session, we've seen rallies and protests against cutting from state government programs that help the disabled, elderly, and low income residents. But with Governor Mark Dayton insisting to raise taxes on the top 2% of the state's money makers, Republican lawmakers say those are small business owners who create jobs. We went out to see how a potential tax increase would effect them.

"Don't worry, we won't tax jobs out of state," exclaims republican House Speaker Kurt Zellers.

It's been the campaign and legislative slogan for State republicans: "No new taxes", citing small businesses as the potential victims of tax increases. But how far is the rhetoric from the truth?

"A tax on the top 2% is really hitting small business where it hurts," says Steve Yaggy, owner of Yaggy Specialized Transportation.

Yaggy is one of the business owners that would make the governor's cutoff for higher taxes. But he says that doesn't make him rich.

"The people I know that are small business people fall into that category yet, the 1% or 2%, but only because they're running a small business, not because they're rich or they're millionaires," he says.

Many small businesses are S-Corporations, a business classification that keeps them from paying corporate income taxes, but require owners to lump their business income with their own take-away pay when filing individual taxes.

"That doesn't mean you have any money left. You could take that much money into your cash register and have that much in expenses as well," explains Yaggy.

As a business consultant, Jeff Bigler does okay for himself. He has a small business in Rochester with a few employees and does well enough that he can afford to give to a few charities as well.

 

"Lourdes: Building our future, Hiawatha Homes, to name a couple."

 

Bigler says understands how spending cuts could lead to less money for those who need it. But while a roughly $7,500 tax increase would not break the bank for him, he says it would likely lead to less donations and slower business growth.

 

"It limits our choice, giving more government choice as to where my dollars might be spent. And I'd like to have the choice to see where those dollars go."

As for the Governor changing his tax proposal...

"Would you be willing to go to the top 1%?"

"Anything is negotiable, but somebody needs to come with a proposal," says Governor Mark Dayton.

 

For now, Governor Dayton is sticking by his plan.

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