Minnesota Raises Gas Tax

February 27, 2008

Gerald Prante

Gerald Prante

The Minnesota state legislature has overridden a veto by Gov. Tim Pawlenty that will raise the gas tax per gallon by a nickel. Pawlenty argued that it wasn’t right to raise taxes on Minnesota families. While that question is certainly worth debating, where was this Gov. Tim Pawlenty two years ago when he signed into law a bill passed by the state legislature that raised sales taxes on families in Hennepin County (Minneapolis) by $392 million without their approval to pay for a new baseball stadium for the Minnesota Twins?

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A tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities.

A sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding.