Leg. starved for solutions

Webster’s clearly defines “food,” but while the dictionary’s disinterested terms probably have universal approval, the Legislature has decided it can improve on that denotation and declared that, as of Jan. 1, some commonly eaten products are no longer food in Minnesota.

Foremost among these products: bread, if it’s made in the same store that sells it. The law applies Minnesota’s 6.5 percent sales tax to products for which a store has mixed two or more ingredients together. These include baked goods such as bread, donuts, bagels and cakes, raising these products’ prices in supermarkets and small bakeries, by defining them out of the category of products considered “food” qualified for exemption from the sales tax. Meanwhile, bread trucked in and simply sold in a store remains untaxed.

A similar confusion surrounds candy prices. Candies containing flour are taxed, while other candies are not.

These convoluted regulations are the result of state bureaucrats attempting to “simplify” and “streamline” the tax laws, but they have only complicated matters for retailers trying to determine which of their products are taxed. Small bakeries and grocery stores have covered their shops with fliers explaining the sudden price increase to bewildered customers and advising them to redirect their frustration to the state officials responsible.

Outrage from consumers and retailers alike is an appropriate greeting for a law creating a larger sales-tax buffet for the Legislature to feast on while at the same time raising the cost for the average taxpayer trying to put dinner on the table. After all, the rationale underlying the food tax exemption in the first place is the common-sense realization that everyone needs to buy food. A tax on food, applying an extra expense equally to those who can afford it and those who cannot, has long been considered the most regressive possible tax scheme. The reason food was originally exempted from the sales tax remains compelling as families struggle through a down economy, and it fully justifies the push expected in the next legislative session to repeal the law.

The law’s timing is also uniquely inappropriate. Minnesota citizens and consumers need to believe their government can pull the state budget and its struggling companies through the economic downturn. The sight of state officials dancing around the definition of food, propounding unintelligible regulations and effectively raising taxes instead of facing up to the same bottom-line dilemmas confronting the citizens and small businesses affected by the new law hardly inspires public confidence. This state deserves a better economic solution than, “Let them tax cake.”