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As a rule, we believe that the more money in consumers' pockets instead of the government's pockets, the better off residents are. Then there are times when that belief is challenged by politician's proposals that seem to try to insult common sense.
Minnesota Gov. Tim Pawlenty last week put forth his proposal to fix the state's budget deficit, a proposal that would at least initially make the deficit worse. The principle behind Pawlenty's plan - to cut the state sales tax to leave more money in people's hands to spend - is a solid one that has stood the test of time. But the dollars and cents of this proposal make it seem as if Pawlenty is trying to jump on the buzzword bandwagon with an "economic stimulus" program that amounts to chump change.
Specifically, Pawlenty's plan would cut the state sales tax by 1/8th of a percent. Statewide, that would cost the treasury $77 million dollars - all to give you two pennies back on a $20 purchase.
We're all for "a penny saved is a penny earned" and "find a penny, pick it up and all day you'll have good luck," but it seems ridiculous to believe that 2 cents for $20 would make that much difference. For example:
• If you were to purchase the Panasonic 42 inch, 720p Plasma HDTV listed in the Best Buy circular in Sunday's Faribault Daily News, you would save just $1.20 off the $1,199.99 price. Hardly enough to motivate you to even start the car at $3-plus per gallon - even if the transportation bill makes our roads and bridges safer.
• If you were to purchase the 2007 Chrysler Sebring, well equipped with a V6 engine, sunroof and only 16,000 miles on it listed on Page A9 of the Sunday Daily News, you would save $15.99. Would you take that into consideration as a factor in purchasing the vehicle? Likely not.
So when Pawlenty says that his proposal would "provide a modest stimulus for the economy," we wonder what his definition of "modest" is. It certainly is nowhere close to the good idea the federal government had of returning up to $1,600 to each of our households to help the economy.
Bottom line, it seems a risky venture - even if it partially is aimed to counteract DFL legislators' tax-increase proposals - to take $77 million away from running the state to allow a consumer to save $16 on a preowned vehicle. |