Good Question: Why Are We Still Paying Taxes?

MINNEAPOLIS (WCCO) — When you join a health club, and it shuts down, you don’t have to keep paying your monthly fee. But when the state of Minnesota shuts down, we keep paying our income and sales taxes. Why?

“I’d like to know why we have to pay state taxes when the state’s shut down and not providing the services we get for those tax dollars,” said Bruce, one of the nearly 100 people who submitted this Good Question.

“Why should we have to, if there’s not really a government right now in our state,” asked Cathy, another emailer.

“All tax laws remain in effect, taxpayers have to file on-time and pay on-time,” said Myron Frans, commissioner of the Minnesota Department of Revenue.

Frans pointed out that Minnesota’s tax laws don’t have an expiration date. So just because there’s no deal on how the state will spend our money, it’s still the law that we have to pay.

“All the laws stay in effect until changed or repealed,” Frans said.

Of course, that wouldn’t be the case if the Ramsey County judge overseeing what is deemed a “critical function” of state government had ruled differently.
Judge Kathleen Gearin decided that collecting tax revenue was an essential element of the government’s financial system. As the Department of Revenue’s website explains, that includes “the borrowing and tax collection activities of the government and the systems needed to support these activities.”

So who’s collecting the money?

“We have people downstairs, not many, they’re opening mail, collecting the checks and depositing the checks,” Frans said.

He said the Department of Revenue typically has around 1,500 employees, but now there are fewer than 100 working, Frans said.

He said the real number is actually less than 50.

From the start of the shutdown through July 8, the state has collected $8.2 million in sales taxes. They’ve collected $160 million of withheld income tax, according to the commissioner.

“The court ruled the collections staff was essential, and ruled the payment of refunds staff was not essential,” Frans said. “That’s another disconnect.”

So Minnesotans will not receive a renter’s refund or property tax refund until the shutdown is over.

“If you stopped collecting all money, would that be catastrophic?” asked WCCO-TV reporter Jason DeRusha.

“It would,” Frans said. “It would mean eventually we wouldn’t be able to pay our bills.”

More from Jason DeRusha
  • Why Do We Have to Pay Taxes During The Shutdown? « CBS Minnesota

    […] more, see Jason DeRusha’s report. Share this article No comments […]

  • Not on your life

    Who’s paying taxes?

  • mettahu

    It doesn’t seem fair, does it? If we stopped paying taxes, MN wouldn’t be able to pay its bills. But at the same time, MN state workers have stopped getting checks (except for unemployment) an THEY can’t pay THEIR bills. But of course, to the legislators, THAT’S not a catastrophe. Tsk.

  • G

    What ever happened to ” We the People “? Seems things get voted in or out that obviously the majority did not want…

  • M B

    It’s not the entire legislature now is it? If it was, they’d have the votes to override his veto.

    Stop trying to blame Dayton when he’s the one doing most of the compromising.

    If you are one of the 7,700 millionaires that the Republicans are protecting, then fess up, otherwise, what are you complaining about? His tax hike won’t affect you.

    And I’d be interested to see if we looked back into Pawlenty’s administration, if we’d find those rich folks getting tax breaks.

    • DBB

      Tax the rich….tax the rich… the rich. What do we do with the next deficit? At some point we need to quit spending.

      • june

        Yep, poor poor rich folks. Just can’t catch a break. You rich people are laughing watching us little peons fight for the little scraps we are thrown as you say ” let them eat cake” and when it is all over you will still have your money and we will have even less then before. The rich people are at the banquet table and we are in the kitchen eating. They really do not care if we blame it all on the welfare people or the people working for the state. They like that. Just as long as they are not taxed any more. I heard that any republican who goes into office must sign something that they will not sign anything that raises taxes or it will go against the whole party. Well, karma is going to come back around. There may be a class warfare, who knows.

      • Megan

        It’s not so much Tax the rich, tax the rich, tax the rich. It’s more that they should pay their fair share. Why should they have less of a percentage they have to pay. They shouldn’t.

        • Dave

          What about the 40% of people that pay no taxes? Shouldn’t they pay their fair share? The “rich”, making over 250k as a couple of taxable income already pay about 12% in this state, not to mention 35% + federally, 7.65% for FICA, leaving them with less than half of their money at 45% and if they want to spend any of it, the sales tax is another 7% in stupid state not to mention property tax, sin taxes, gas taxes, etc. I think they pay way more than their fair share, regardless of how much more money they make. People that actually work for a living are being taxed to death – when are people going to realize that? The last thing anyone needs is more taxes!

          The amount we pay for people to lean on shovels / build our roads is a joke, unions are a joke, U of M is a joke, state pensions are a joke, our free money / welfare programs are a joke, this state is a joke. Stop wasting money already Dayton, you tool.

          • Tonto Kowalski

            “What about the 40% of people that pay no taxes? Shouldn’t they pay their fair share? ”

            Are you being serious or are you really THAT ignorant of the situation? I’m being sincere here.

            What would their share be? Most of that 40% is disabled, under 18 years old, or retired. What exactly should they pay?

          • MARK

            45% of $250,000 is $112,500. I’m supposed to feel badly for people who have to get by on a measly $112,500 per year? LOL. The humanity!

            It sounds like you really hate this state Dave. Have you looked into Texas?

            • Tonto Kowalski

              I make 114,500 per year and my wife makes a measly 35k, and can barely make ends meet. There is a lot more to “getting by” than you can estimate from face value, ie a dollar amount.

              • Jim

                Tonto, no offense intended, but I have very little respect for two adults who find it difficult to get by on a combined income of $149,500 in Minnesota. What exactly can you not afford?

                • Tonto Kowalski

                  Jim, if I was just starting out, right out of college, no wife, kids, mortgage or 20 years worth of debt – you’d be right in having “very little respect” but that just wasn’t the case. That’s only been my income since March 14th.

                • Tonto Kowalski

                  Again, you don’t know the expenses and debts incurred prior to getting to that income.

                  I was injured in an accident in 2008 and was partially disabled, lost my sense of smell, wrecked my short-term memory, have severe vertigo and balance issues and incurred $147,000 in hospital bills. Then I worked a 60k job for 2.5 years and went further in the hole. Every Winter we were forced to forego paying the Xcel bill until Spring. That gets to be big. My truck’s transmission went out a couple weeks ago. The same week our gas oven died, or electric dryer died, and our lawn mower died.

          • Tonto Kowalski

            What 40% that don’t pay taxes, Dave?

            Who are those people?

            I dare you to find out.

          • Jim

            Tax levels in this country are at their lowest point in about 50 years, yet all we hear from the GOP is that rich people are being taxed to death. The richest Americans are richer than they’ve ever been, control a bigger percentage of this country’s wealth than they ever have, and pay a lower tax rate than they have in the past half century, yet the GOP just prattles on and on about being taxed to death. It’s truly unbelievable. Unfortunately, middle class workers are being hurt by this government shutdown, all to protect the tax rates of people who make a million dollars a year or more.

            • weird argument

              That’s a big assumption about the middle class. I’m middle class. Everyone I work with is middle class. My whole family is middle class. So far… none affected in any negative way.

              • Liz

                Same here… I haven’t been suffering any more then usual. Granted, the bank account is a little lower than normal, but I guess I didn’t need to buy a new $75 dress for my friend’s wedding. I didn’t want to wear any of my older ones!!

              • Jim

                “weird argument,” does anyone in your family work for the state government? The state government has shut down, locking out the workers, who are largely middle class. The GOP’s argument is that rich people are too heavily taxed, despite the fact that they’re taxed at the lowest levels in decades. To me that’s the definition of a weird argument.

                • Liz

                  Who do you know that works for the government Jim? My aunt and best friend do and, while they’re concerned for their future, they’re not starving. I know 8 people who don’t have a job right now and all of them knew this was coming. So they saved. My friend is actually taking this time to consider going into a different job because it’s about time for a new one for him. He sees it as more of an opportunity to interview and really take the time to look at new career paths. I don’t think he’ll be visition the Dorothy Day Center any time soon.

                • Jim

                  Liz, hopefully people prepared and are not starving. I didn’t write that anyone would starve. I simply believe that this government shutdown is hurting the poor and middle class more than the rich, for obvious reasons. How many rich people do you know that either work for or get assistance from the government?

                • Recall

                  Nah, you’re right Jim. The rich aren’t suffering this one out but some own a business that is regulated by the government in some form or another…so some may be sweating it out. Just hoping those situations don’t cause unfortunate unemployment.

        • outofwork

          they don’t have less of a percentage. in fact they pay more already. where do people get off saying that someone should pay a higher rate than another?

          • factchecker

            Actaully as an overall percentage of their income “the rich” pay less. Check your facts before posting next time. The Star Tribune broke it down in an article a couple months ago.

            • weird argument

              And you take the Star Tribune as fact? Every news outlet has a bias, you need to do your own research if you want it to be true to you.

            • Dave

              LOL you lost all credibility when you said you read it in the Star Tribune! Maybe you should look at a tax bracket sometime instead of getting your info from the lefty media. Anyone can shelter money, so that aside, the more money you make the more you get taxed “factchecker” hahahaha

        • DBB

          We definetly need to look at a fair tax. But it doesn’t matter what the revenues are or where that revenue comes from or even who is paying what share, as long as we keep over spending, we will always have trouble.

        • weird argument

          If the rich aren’t paying their fair share it’s because they are taking deductions and exemptions that the government says its ok to take. Don’t hate the rich, vote different politicians who will stop all the ridiculous write-offs.

      • CJ

        Cut taxes… Cut taxes… Cut taxes… What do we do with the next deficit?? At some point we need revenue.

    • Marv

      I blame Dayton. He is not the one compromising. The legislature passed a budget in May which was the result of a compromise between the Democrats and the Republicans. Dayton vetoed it even though it increased spending by 3 times the current economic growth rate. He did this for purely political reasons – which is a dereliction of duty. He could have passed a lights-on bill (which was another compromise offered by the Republicans) and avoided all this and still got the final deal he now has (which is yet another GOP compromise). Next time you decide to make a comment, get your facts straight.

  • AEllen

    This makes me totally sick to read. It would be horrible if MN couldn’t pay. Even tho the citizens can’t afford their bills, the state will keep sucking their money because they need money. Everyone needs to put their heads back on and realize what they are doing.

    • Dave M.

      Minnesota voters can finally see just how the government system works in Minnesota, now we all just have to remember just how to get even in this mess! Don’t Re- elect! Plain and simple, the whole bunch need to be fired once in for all! They feel our say has no meaning, just in there eyes during re- election! And who’s the idiot that agreed they could still collect there paychecks after the shut down? Seems to me, if they can’t do there jobs, they shouldn’t be paid a dime! And should be FIRED! Period! :)

      • june

        I agree.

      • Megan

        Well said! I also agree! If I stop doing my job I would be fired and stop receiving a paycheck the same should go for them!!!!

      • CJ

        You’re an idiot. Use proper English too.

  • Bill

    Because “WE THE PEOPLE” are modern day slaves owned by the corpoate lobbyist’s!

    • DBB

      Bill, that pretty much sums it up. Well said!

  • Jon Lee

    Of course the government wants to collect “what’s due them”, but on the flip side giving “what is owed” the people aka refunds is not happening “because the government is shutdown….now that is hogwash if I have ever seen it. Try not paying your taxes and see what happens to you however they don’t have to give you your refund until the government re-opens. So wrong.

  • Mike

    Why our we paying taxes? Because it is our obligation to the public schools, safe highways, healthcare, prisons and social services for low-income citizens.
    A better question would be, if you don’t want to pay taxes, then why don’t you move to a tax free state?

  • JL

    thats the scam. we keep paying for something that we have no control nor do we want. the biggest criminals r the politicians. state, county, & the feds.

  • JL

    i love minnesota, just cant stand all the liberals in this state.

    • Jim

      I’m sure things would be all roses and candy canes if the GOP ran everything. Grow up. The problem is partisans like you.

    • Peace

      Then why don’t you move? I’m guessing the “liberals” wouldn’t miss you!

  • George Washington

    “We don’t pay taxes”. Taxes are taken out of our income by the threat of force(Jail)

    Taxes are supposed to be voluntary under the assumption of good citizenship. Even though the illegal income tax is enforced it was never ratified by all the states.

    Why does a person get a patent on a product, idea or service? To protect their hard work,idea and income generated from it. Isn’t your income hard work, ideas and income generated from it?

    What it boils down to is this: They use force to take money from some, so they can control the rest by distributing to them and making them dependant on the state

    • Recall

      You’re one of my kind– you crazy flat tax libertarian. Excellent! and well, said.

  • BAK

    What would you think to have all elected officials terminate their bennifits that they receive after they are no longer in office ? DON”T THINK THAT WILL EVER HAPPEN. It’s not the Republicans Demicrats or the Independents….IT’S THE POLITITIONS. Also how much income is the State not receiving by shutting down the Lottery, DNR, DMV and any other income generating offices?

  • Elvis

    Its crazy, are they lowering the taxes cause of the shutdown? No! There is actually less people working than what they say for the government, yet we are paying, why? If the government can’t do their job we shouldn’t have to pay them! If I’m not doing my job, I don’t get paid! Meanwhile us workers are out here working and trying to make a living while they get paid to sit on their buts! Its not fair to the employees of the government, but the politicians should not get paid!

  • StraycatStrut

    Just the fact that my State taxes dollars in part are going to support Billionaire Mark Dayton in the taxpayer funded mansion on Summit when in fact he keeps harpooning the inflated MN budget makes me cringe….. all the while….laying off 22,000 workers and shutsdown the State. Some deal he is in leadership and wasted taxpayer time and money.

  • Middle of the road

    This reminds me of large corporations. They lay people off and then the fat cats (board and managers) all get bonuses and raises. Funny how government emmulates reality (NOT).

  • Mike Hawk

    END the DEMS. & REPS. Go with flat tax. Restore the Soc Sec. to those who’ve paid it.
    I think it’s called a revolution.

  • common sence

    If all you liberals want to tax the rich, then lets start with the Indian Casinos They have enough for the state alone.

    • Tonto Kowalski

      That is the dumbest idea ever posted in a public forum. I’m being serious.

  • Fire a gov't worker, save a bundle of $

    1,500 employees fewer than 100 of whom are working. Well, there ya go, that’s part of the spending problem right there – 1,400 government employees who can be let go.

  • What the h*ll

    I find it interesting that tax collections will continue and that payment of refunds due will stop during the shutdown.
    “If you stopped collecting all money, would that be catastrophic?” asked WCCO-TV reporter Jason DeRusha.
    “It would,” Frans said. “It would mean eventually we wouldn’t be able to pay our bills.”
    Hmmm….I’m thinking that’s what most state workers and people who count on those tax refunds as part of their income are thinking right about now. Finally, a point we can all agree on!!

    • Get a

      you’re an idiot if you count any sort of tax refund as income.

      • What the h*ll

        In an age where salary is moving at a snails pace compared to the cost of living, I’ll take what I can get back for my family and myself. If the taxes are done and filed, I think one is ok to plan on that $$ coming back into the family budget.

        • Blah Blah

          No really, I agree with get a You should definately NOT be counting on a refund as income. You should add more exemptions to your W4 so that you can invest that money rather than letting the government borrow it for free. This especially rings ture when they are telling you that refunding it is not essential to them.

          • What the h*ll

            Thank you for your tone Blah Blah, I appreciate the sound advice! After having our 1st child, we examined our exemptions and do not give out an interest-free loan to the government any longer! :-) In terms of a renter/property tax rebate, if you know of any way to keep that money in my pocket all year round, I would love to know how!! In the meantime, I’ll consider it an August (or now Sept, Oct, Nov, and it better be by December! :-) boost to the checkbook…the last one I’ll see as a (former) renter!

  • person

    Does this mean we will have a surplus of money that’s not being spent, after this is all over?

  • jan

    My income is from treasury bond interest and social security. I pay quarterly estimated taxes. If the federal government defaults on August 2, my interest income will not arrive. I will have absolutely no income and they expect me to pay taxes?

  • Pam

    Very interesting, last sentence of this story. “The state can,t pay it’s bills unless it’s collecting revenue” excuse me? So it’s ok to layoff workers so they can’t pay their bills but the state can. Fools!

  • Liz

    Does anyone not realize that your taxes go to more than just “fat cats” or whoever you’re referring to? Our schools, roads, healthcare system, etc function thanks to taxes. Although now, only some of those functions are running due to the shut down, however, those that are, still need money.

    I honetly say we should be increasing taxes on things like various taxes on goods. That way, if you’re rich and buying more things or things that cost more, you’re taxed more. If you buy lower cost things, you’re not taxed as much.

    I hesitate to increase income tax because it might just make CEO’s and president’s rethink where their company is headquartered. Minnesota has one of the highest percentage of corporation HQs for a reason. If we start taxing them too much, they’ll leave. None of this “I get paid enough, I don’t mind paying a little more.” Come on. People are selfish and greedy, including yourself. You’re going to go where you have the most money. If someone like Best Buy, Target, GM, etc, leaves, what do you think is going happen? Jobless rate increases.

    • Pam

      I concur with your comments. How about a 1 or 2% clothing sales tax to fund roads, public transit and education. Same spending for health and human services perhaps tweak the programs like former WI gov. Tommy Thompson.Don’t we want better for our state?

  • idiocracy

    less than 100, no! less than 50, wait!… Great math Revenue Department.

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