Wednesday, April 04, 2007

Fair Taxation in MN

Star Tribune columnist Nick Coleman hits a home run today talking about the wealthy Minnesotans who are crying because the state legislature wants them to pay the same rate of taxes as the middle class:

But the truth is that while the quality of life in Minnesota has been deteriorating in almost every way that matters to common people, Minnesota's wealthiest have been getting a tax break that they don't need and don't deserve. And the result is that the cost of government has shifted unfairly to the middle class while the things that matter to the middle class -- public schools, roads, public safety -- have declined.

If raising taxes on the wealthiest 1 percent of Minnesotans to the level they were at before conservative Candy Men went on a welfare-for-the-rich binge is what it takes to turn things around, well, I think Minnesotans would make the sacrifice. We aren't stupid.

According to the state's Department of Revenue, Minnesota households earning between $45,000 to $105,000 (the state's median income is about $47,000) pay 12.3 percent in state and local taxes, while households earning above $105,000 pay 10.9 percent. The very wealthiest Minnesotans, earning more than $355,000, pay about 9 percent.

So the rate for the middle class is about one-third higher than for the rich.

You want apocalyptic headlines? Try this: "Minnesota soaks middle class while the rich skate!"

The "progressive" state of Minnesota has adopted a regressive tax system that is becoming more regressive. And it's time to call a halt to that.

For five years, Gov. Tim Pawlenty has been playing a shell game and pretending taxes haven't gone up. All the while, licenses and fees have shot up by $1 billion, and property taxes have been going through the roof -- averaging an 11 percent increase per year. Since Pawlenty came into office, residential property taxes have increased $1.4 billion, or $866 per household, according to Wayne Cox of Minnesota Citizens for Tax Justice.

"We spend less money per capita, when you adjust for inflation, than we did five years ago," says Cox. "That's why schools are in financial disarray and the roads have gone to hell and cities have been laying off firefighters and police officers. The Legislature is trying to get the state back to the level of services we had before."

The Senate tax plan would shift some of the increased tax burden on the wealthiest to property tax relief, a reasonable effort to relieve pressure on middle-class homeowners. To hear Pawlenty tell it, the DFL is just up to its dirty old tax-and-spend tricks. But the real trickster here is Pawlenty, who has started running radio ads, paid for by his campaign committee, trying to confuse voters.

"Call your legislators and tell them you're taxed enough," Pawlenty says in the ad.

OK, Minnesotans believe we are taxed enough. But Minnesotans also believe everyone should pay their fair share.

The richest among us don't.

So don't be fooled by No New Taxes Pawlenty's ads: What they really are saying is, "Please don't ask the wealthiest 1 percent to pay as much as you do."

If Minnesota falls for more of that, we will continue to pay more and more for state government while getting less and less. Meanwhile, a chosen few would continue to be excused from paying their fair share.

The Governor will veto the tax increase, of course, but keeping this issue front and center before the public will help the DFL increase its majority in the next election. And eventually the rich will be forced to pay their fair share of taxes.

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