How would you react to a sales tax on clothing?

A bill introduced in the Minnesota Senate this week would impose a sales tax on clothing purchases of more than $200. Minnesota is one of only a half-dozen states that exempt clothing from their sales taxes. Today’s Question: How would you react to a sales tax on clothing?

  • Duane

    I have no problem with a sales tax on clothing $200 or more, however I am troubled that one of the first budget bills to be introduce by the DFL is an effort to increase tax revenue. We need to instill some fiscal discipline in our state government and that is to first look at controlling expenses. I fear there will be more efforts to increase taxes on most of the people of Minnesota. The state did not get hurt as bad as many in this recent slowdown, let’s not damage Minnesota’s economy now.

    • Emery

      With all do respect Duane. There were GOP candidates running for office based on your premise of cuts and austerity. The voters rejected them and their message.

      • Duane

        To expect that most of the voters based their vote on a clear understanding of the position of each candidate I feel is a stretch.

    • GregX

      I think your concern is a good one. I think the DFL should publish a grand plan – showing how expansion of the sales taxes will permit reduction of income and real-estate taxes in an effort to stabilize the revenue stream for government.

      if the goal is solely to layer on more taxes … without re-balancing existing ones … I am not very pleased. I do expect that sales tax on clothes & internet will increase overall revenue – even with a decrease in income and real-estate taxes.

  • Rich

    It’s a start. Internet sales should also be taxed. As an aside, I would eliminate the mortgage interest deduction as well as taxing employer provided health benefits. I can’t imagine anyone voting me into office running on this platform. :^)

    • GregX

      nice smirk ;-) !!

      if you read the linked item – internet sales are included.

      I agree on the Mortgage interest deduction (MID). It “costs them” 1.5 times what they deduct through higher income and real-estate taxes to subsidize the MID for wealthy and their very large home mortgages. its because the MID deduction is computed at your tax rate – if you only pay 24% and the wealthy are taxed at 34% — they get a bigger deduction on a bigger mortgage. You/We are paying for their house.

      We’ve become a “voter-ate” of short term, small picture thinkers. We are in this mess because our boomer fore-fathers thought the artificially invented “on-the-books” growth of the 1980′s and 1990′s would continue forever. In fact they borrowed heavily against that assumption – never paying as they went.

      We – the remainder … have to start paying .. and the old ideas that somehow you/we are responsible doesn’t hold water. The wealthy profited most from the ponzi scheme of our boomer fore-fathers and thus .. they have the most to pay back.

      We just have to pay taxes on clothes and internet – on top of our other ones. Saying we don’t is like denying that you are there.

  • reggie

    I’d vote for you, Rich. I wish the legislature would start with by applying sales tax rules (and include clothing) to online purchases. That’s as much a local-business-friendly leveling of the playing field, as it is a revenue generation tool. I’d also support eliminating most categories of preferential tax credits, deductions, and exemptions, from the home mortgage deduction to the much more problematic corporate tax credits and subsidies. We should not fear tax increases: that’s the only way we’ll ever tame the Federal debt and keep the state’s budget balanced, as is required by law.

  • Gary F

    Read the legislation from the link, it has me somewhat puzzled. Most of the items they list don’t cost $200.

    I’m not sure how many pieces of clothing I’ve ever bought in my life that cost $200. Maybe a suit.

    I do need a new sport coat, I guess I’ll need to purchase it before this new tax goes into effect.

    Stores will then start to carry more and more sport coats, hunting clothing, and sporting clothing that costs just $199.00

    • GregX

      and thus not really a problem for most of us …

      I would have set the tax at 1.5% and made it applicable to all clothing purchases and only listed the excluded items.

      • Gary F

        Then it really won’t create that much revenue if it doesn’t affect most of us. Just another way of punishing achievement.

        • Steve the Cynic

          Depends on what you mean by “achievement”….

        • GregX

          You know, if corporations valued the “achievement” of their non-executive workers – who actually deliver the value that the execu-suits use to claim credit for bonuses … we really wouldn’t be arguing this item.
          Everyone would be making big bucks – and income taxes alone would support our government.

          but instead its the top 1% squeezing every last dime out of the working class. and… then convince them to blame the government for looking for money to pay for social services.

          clue to the wealthy… if the minimum wage was higher – fewer people would need or qualify for assistance.
          duh!

    • Bear

      It is a cosmetic dodge to slip in increased spending.

  • Shannon

    If that’s what it takes to repay and fund our schools, I’m in.

  • Bear

    This is the strangest law. Jock straps are taxed but athletic and protective equipment is except. Can’t remember the last $200 jock strap I purchased. Fur clothing is exempt ?? Dem’s protecting special interests!

    All of these bills are either increased taxes or spending.

    • Gary F

      Jock straps have become more expensive, now that local company, Shock Doctor, recreated that market with high end cups and mouth guards and effectively marketed them to youth. Though not yet $200, a high school parent now hears the cry “Dad, I cant use a $2 mouth guard, nobody uses the old dumb ones you used”.

  • GregX

    Much like the gas tax… too little too late. You can’t drop the other tax rates ( income, real estate) without developing a sales tax for clothing and services. Way more of the economy is happening out there in sales and services. Manufacturing exists – but 10 employees do the same work as 53 from 1960 due to technology. Nearly all working people have more control over what they do (spend) then over what they will earn (wage/salary). Sales taxes applies “conservatively fairly” because it only clicks in when you choose to spend.

    Clothing and services will need to be taxed eventually to balance the revenue stream. Until we introduce those taxes and get the internet tax functional – large chunks of the real economy – that themselves depend on governmental support (courts, laws, patents, licenses, etc.) – fail to pay an appropriate share.

    Until that re-balancing of taxes starts – there is no hope of off-loading the stress on income and real-estate taxes. Its short sighted of the democrats if they don’t outline the larger picture of tax revision they are after. Its short sighted of the GOP if the don’t at least perceive that this is the potential.

  • Steve the Cynic

    I would remove the clothing exemption entirely. In the decades since the exemption was put in place, clothing has become much cheaper, being made mostly in low wage countries, so the cost of clothing oneself is much less of a burden on the poor than it was long ago. As it is, the exemption has become a subsidy for the lifestyles of fashionistas.
    More importantly, to make the sales tax less regressive, services should be taxed. And yes, tax should be collected on internet sales, but that might require an act of Congress. And the gas tax is still too low to incentivize the kind of conservation we need to have happen.

  • JODY

    I think a sales tax on a $200.00 plus item is fine, but not a tax on a $200.00 plus purchase. I don’t think most low income people are buying $200.00 items. But they may spend $200.00 on a school clothes purchase for the kids.

  • Jim G

    I think $200 per item is a reasonable price to start charging sales tax. If you can afford a pair of shoes, suit or dress that costs this much, you can afford to pay for your fashion consciousness, because you already do.

    Last year we had a wedding for my step-daughter and her fiancé. My wife needed a dress for the occasion and so we went to the Mall of America looking for the perfect dress. As she shopped at one upscale department store, I wandered around. Eventually, I found myself in a department where the sales clerks looked at my lack sartorial splendor and asked politely if they could help me find anything specific. I explained our mission. As the pretty young salesperson started asking more specific questions I mentioned I liked one dress on a nearby mannequin. Yes, she agreed it was a lovely dress and it was only $2,500. I cleared my throat and mentioned that might be slightly out of our budget. I thanked her and started looking for my wife.

    That day my wife purchased not one but two beautiful dresses for a total of $425.00. No tax (7.5% of 425.00 = $31.87) was incurred. She couldn’t decide which one she liked best and her sales clerk said the store had a no questions asked return policy. That was a good argument for buying both. Make the final decision later, she counseled. My wife still has both dresses. By the way at the wedding, she looked radiant and we had more in the wedding budget. We used the extra wisely.

    • Steve the Cynic

      If it’s $200 per item, then lawyers will no longer buy three piece suits. The coat, trousers and vest will all be priced separately.

      • Jim G

        That’s probably true for the associates working 70-80 hours a week. The partners will still be buying their silk $5,000 designer suits. If we drop the trigger point too low, I worry about the regressive implications kicking in.

      • Jim G

        I do agree with you that we need to start taxing services. Services are where the growth in the economy has occurred over the years and our tax reform should acknowledge that.

  • John

    I’ll buy anything over $200 online and get it tax free until they start taxing that, then I’ll start making my own. Not into paying taxes.

  • Jeff

    Why not just lower the tax rate and expand it to clothing, food and all services? The vast majority of clothing that people buy is not a bare essential and tends to be a fashion statement anyway.

  • Pearly

    Remindes me of a Beatles song.
    “Should five per cent appear too small Be thankful I don’t take it all
    ‘Cause I’m the taxman, yeah I’m the taxman”

  • Cat

    I support this proposal on taxing an individual clothing item over $200, but wonder why fur items are exempted. Also, I’d like to see an explanation of how this fits in with a big-picture tax plan.

  • georges

    THIS IS A HOLDUP, NO WAY TO MISTAKE IT,
    WE’RE MEN OF VIOLENCE SO DON’T FOOL AROUND.

    IF YOU HAVE MONEY, WE’RE GOING TO TAKE IT,
    YOU TRY AND STOP US, YOU’LL END UNDERGROUND.

    HAND US THE MONEY, DON’T STAND THERE AND SHIVER,

    TAX TIME IS COMING, GIVE ALMS TO THE POOR.

    OR I´LL PUT A BULLET RIGHT THROUGH YOUR BEST LIVER,

    WEALTH IS THE DISEASE AND I AM THE CURE,

    I AM THE CURE,
    I AM THE CURE,
    I AM THE….

    • Wally

      If you use someone’s song in your piece
      You should give them some credit at least
      Or I’ll add to my list
      One more plagiarist
      Or should we just call the police?

      Georges, maybe you don’t think it’s plagiarism, but if you don’t credit the source, sure smells like it. I don’t know every obscure Beatles’ lyric, and I had to google this. I’ve said it before, credit sources!

  • Renae

    Yes. Tax clothing. All clothing. I don’t think of clothing as a necessity anymore. Most people have far too much clothing anyway and can get it for very cheap. It is silly to have a certain price guideline- just tax it all. And while we’re at it, let’s tax internet sales. I don’t love paying taxes, but I also don’t love buying a bunch of junk that is destroying our planet and think it is about time to tax people for their fashion purchases.

  • Connie

    I am in favor of this, especially since it lowers the overall rate. I would also favor taxing all clothing and decreasing the overall rate even more. This would make our sales tax less regressive. The argument to not tax clothing because it is a necessity is absurd. We tax all kinds of necessities and most clothing purchased is not a necessity (let’s be honest). The current law has the same effect as giving a subsidy to clothing retailers.

  • Ann M

    Get rid of the state income tax and tax clothing. Taxes should be based on how a person spends–the more you spend, the more you pay. Minnesota is one of the most highly taxed states.Minnesota taxes and spending need to be reformed in many ways.There are other states that don’t have sales tax or income tax. The lawyers and accountants make a mint preparing income taxes and estate taxes in Minnesota..

  • kim

    I don’t spend much on clothes, so it wouldn’t affect me much. I guess that makes it an ok tax, huh? How about taxes clothes except for stuff bought second hand, since that’s already been taxed once?

    I’m hoping they don’t tax services. I’m self employed, with a small business that is probably a “service”, I dread having to collect and send in sales tax. I dread having to keep track of a bunch of change. Either than or I eat the price increase myself. I’m not real fired up about doing the job of the government in collecting it’s revenues, when I’m not getting paid for my time and trouble,There has to be a better way.

  • georges

    There should not be any sales tax on clothes, or anything else, at the State level.
    Sales tax and property tax need to be local government only. The State should be limited to assessing taxes on income, and user fees, such as State Park stickers, auto license plate tabs, etc.

  • JasonB

    They’ll try to get your money one way or another. It’s the government; that’s their job.

    Establishing a clothing tax is a foothold gaining strategy. No matter how much it is touted as progressive or broad based it will just make it easier to increase down the road when we have another of our regular budget crises.

  • Steve P

    More liberal nonsense with another tax on working people is good????
    The gasoline tax is not used 100% for roads and bridges as it was designed to be used so Dayton wants more $ to fund more non_related things. Lets not forget the new taxes we already have..our paychecks are now much lower but Obama Progressives promised NO taxes on the middle class_ I am middle class and I lost more to the waste of federal government spending. Since the fiscal cliff deal here is what really happened, all while we still give billions to our enemies,i.e., The Muslim Brotherhood in charge of Lybia and Egypt. Do the math.
    New taxes this year:
    Payroll tax: increase in the Social Security portion of the payroll tax from 4.2 percent to 6.2 percent for workers. This hits all Americans earning a paycheck—not just the “wealthy.” For example, The Wall Street Journal calculated that the “typical U.S. family earning $50,000 a year” will lose “an annual income boost of $1,000.”

    Top marginal tax rate: increase from 35 percent to 39.6 percent for taxable incomes over $450,000 ($400,000 for single filers).

    Phase out of personal exemptions for adjusted gross income (AGI) over $300,000 ($250,000 for single filers).

    Phase down of itemized deductions for AGI over $300,000 ($250,000 for single filers).

    Tax rates on investment: increase in the rate on dividends and capital gains from 15 percent to 20 percent for taxable incomes over $450,000 ($400,000 for single filers).

    Death tax: increase in the rate (on estates larger than $5 million) from 35 percent to 40 percent.

    Taxes on business investment: expiration of full expensing—the immediate deduction of capital purchases by businesses.

    Obamacare tax increases that took effect:

    Another investment tax increase: 3.8 percent surtax on investment income for taxpayers with taxable income exceeding $250,000 ($200,000 for singles).

    Another payroll tax hike: 0.9 percent increase in the Hospital Insurance portion of the payroll tax for incomes over $250,000 ($200,000 for single filers).

    Medical device tax: 2.3 percent excise tax paid by medical device manufacturers and importers on all their sales.

    Reducing the income tax deduction for individuals’ medical expenses.

    Elimination of the corporate income tax deduction for expenses related to theMedicare Part D subsidy.

    Limitation of the corporate income tax deduction for compensation that health insurance companies pay to their executives.

    Each of these 13 tax increases will slow the economy, meaning that businesses will create fewer jobs. Fewer jobs will make it even more difficult to land a job than it already is for the more than 12 million Americans looking for work.

    • Rich

      It’s the old saw: voters elect Democrats to give them more
      goodies and then elect Republicans so their taxes don’t get raised to
      pay for the goodies.

    • Steve the Cynic

      A word to the wise, if you fancy yourself such, Steve P: hardly anyone reads comments that are longer than a screenful. They’re almost always vapid ideological rants that repeat talking points we’ve all heard before, so we skim them just enough to see which extremist fringe they’re coming from, and move on.

  • Rich

    All this talk of regressive taxation gets back to a very American problem. The American benefit model is to rely heavily on graduated income taxes, which are referred to as “progressive”, and to offer the majority government benefits universally, i.e. irrespective of need. The European model uses far more flat taxes, such as the VAT or a flat tax on earnings, but offers benefits to those that most need it (universal healthcare being the partial exception). This is why Europe sees it’s system as being more fair despite taxes that American liberals label ‘regressive’. Economically, the European system is much more efficient. ‘Progressive’ taxes discourage work and encourage evasion., and serves apolitical purpose.

    That political purpose is key. American liberals since FDR have been trying to sell the message that government services, which we should all want because they are equally for all, can be expanded while only taxing the rich. This doesn’t work of course, and the middle class ends up paying money to the government in hopes of seeing some of it come back in the form of services that the middle class could have bought for itself, had it not been taxed. To a large degree, the success of American right in keeping tax rates low has been because of the dissatisfaction of the American middle class with the inefficient system of progressive taxes and universal benefits, which repeatedly make American liberals seem economically incompetent. Only in those countries where there are flat taxes and progressive benefits has the scope of government services been able to expand to the level desired by American liberals.

    • Steve the Cynic

      Those are good points, with one exception. Progressive taxes don’t encourage evasion any more than flat or regressive taxes do. Greece, for instance, would not be in the fix it’s in if it weren’t for a pervasive cultural tolerance of the evasion of its consumption tax.

      • Rich

        Economics is a soft science that tries to be hard by using a lot of sophisticated math, but suffers from the same problem as all of the soft sciences:Often the data isn’t very good. There isn’t any way to control other factors, there may not be enough instances of the thing you’re studying for good statistics and the data is rarely well behaved and normal. Economists rely on governments to collect their data, generally and governments aren’t very disciplined in their data collection, and they generally have a bias with regards to what they are collecting. So much of economics is destined to remain sophisticated math on unrealistically simple models, or studies of real systems where the data to make firm conclusions doesn’t really exist.

        • georges

          Economics is a hard science. As hard as they come.

          Economic data is excellent and comprehensive, more than enough to come to any firm conclusion you want to find.

          The problem with economics is that everyone thinks he understands it, and almost no one does. He can’t see the forest for the trees. He concentrates on the plethora of data and becomes hopelessly lost, as he doesn’t have the abilities to understand the whole, and therefore he cannot properly assess the data even though it is accurate and plentiful.

          The few of us who do understand it are reluctant to talk. We know it is almost impossible to change anyones preconceived ideas, no matter how easily they are proven wrong. People would rather believe in themselves than in the facts.

          • Steve the Cynic

            “Economics is hard science”? That’s a good one! LOL!

      • georges

        Nonsense……
        The pervasive cultural tolerance of tax evasion in Greece is the result of the Government spending too much, and therefore attempting to tax too much to cover their drunken sailor spending habits.
        Greece has a government spending problem…..not a tax evasion problem. Reduce the government spending, taxes will also then be reduced, higher tax compliance will naturally follow.
        The Ultra-Libs, however, will always attempt to say the cart pulls the horse. Never listen to a lib….if you want to hear the objective truth. They are strangers.

        • Steve the Cynic

          That’s typical ideologically blinded thinking. You know what the answer should be, so you figure out how to make the evidence fit, instead of following where the evidence leads.

          • georges

            There he is……my lil follower.
            Who cannot ever bring new ideas to the table….but can only attempt to brand others with what ones own self is guilty of doing…….
            Now I will give you the last word…..again. My perpetual gift to you Enjoy. Truman Capote was once asked, “Is it true you sometimes only write one word a day?” To which my lil buddy replied, “Yeth. But it’s the WIGHT word.”
            I always get the RIGHT word, as well as the BEST word. My gift to the shallow is the last word.
            Finis

          • GregX

            After a visit to Greece -not for vacation but for business – you will change your tune. Nothing can be done in Greece -without the application of monetary grease. Officials at gov. offices , managers at warehouses, small town workers…. everybody needs a bit of money to help sir out. … “its not for me – but there are many who need to approve your request you understand – no ??”
            yes ! … don’t get me wrong – it was still cheap – but the posted price was just a means of hiring sign painters …

          • Rich

            There appear to be conservatives that believe everything they ever sort-of-read by Rand and Hayek is true, that we’re already well down the Road to Serfdom, that half of America is addicted to welfare dependency, that America would be a far better place if only the government would let the elite keep all of their money and forced the little people to work hard and show a little gumption. In fact, most of those rich people inherited money, led privileged childhoods, had privileged educations, and those few that truly created something were blessed with as much luck as skill or effort. Most recipients of government handouts are sick, old or have suffered grievous hardship, and most have and will work far harder than the rich people in the room.

          • Sue de Nim

            You’re a legend in your own mind, georges.

  • olcadguy

    Should be over $50, and double the tax on all imports, this is the “Painless” type tax that will not hurt anybody, should benefit AMERICAN MFGS. and create jobs.

  • Sammy

    It seems regressive taxes have increased so much during my lifetime. Maybe it’s necessary. Maybe it’s even a good thing. But I’d like to see a good graphic representation of how taxes have changed over the years; how each income level has fared. I often feel as if these kind of taxes are an underhanded way of shifting burden to those with less.

  • jockamo

    A sales tax on clothing is just another way for the Democrats to stick it to the poor and let their rich friends off the hook.

    Instead, lets declare that the property belonging to churches and religions be treated the same as property owned by normal individuals.

    Also, tax union dues at 50%. And union dues of public employees at 100%.

  • Wally

    Remove all sales tax exemptions. Tax all sales, all transactions, all services: food, clothes, medical, drugs, everything! This would eliminate armies of revenue agents and save millions right there. Sales tax is not regressive and unfair to the poor, but progressive; the more people make, the more they spend, and the more tax they pay. Sales and excise taxes are the only really constitutional taxes we have.