Even before his election, Governor Dayton ran on the issue of making Minnesota’s wealthiest residents “pay their fair share.” With Minnesota facing a multi-billion dollar budget deficit, he wanted to “tax the rich” in order to solve Minnesota’s economic problems.
When it later became clear that his “tax the rich” proposal would come nowhere close to solving our budget woes, Dayton still pressed on with his idea.
That’s why as chairman of the Minnesota House Taxes Committee, I wasn’t all that surprised when the Governor made his $4 billion tax hike the centerpiece of his balanced budget proposal and asked me to consider it to solve our projected shortfall. It would level Minnesota with the third highest income tax rate in the country, and it contains a tax increase on large Minnesota employers and a statewide property tax increase on high valued properties.
One of the stated goals of the Governor's tax plan is to make Minnesota's tax system more progressive. Yet when the budget forecast improved, Dayton backed away from his plan to implement the highest income tax rate in the country - a rate only the top 1 percent of incomes in Minnesota would have paid.
House Republicans have no desire to raise state taxes on anyone. Facing a $5.1 billion shortfall, we believe state government should spend no more than it collects. We also believe that if we force our residents and our business owners to pay higher taxes in this poor economic climate, it will ultimately kill jobs and force more businesses and companies to close.
We did give Governor Dayton’s job killing tax hike idea a vote, however. It was brought up on the House floor, and it received zero votes. In the Senate, it received one vote.
Despite this nearly-unanimous bipartisan opposition, Governor Dayton has still insisted that the Legislature pass tax increases on the so-called “rich.”
Several days ago, I received some new information that found Dayton’s tax increases would impact many more than Minnesota’s very wealthy residents. After reviewing the update to the Minnesota Department of Revenue’s 2011 Tax Incidence Study, the one thing that stood out was that the Governor’s idea would increase taxes to Minnesotans on every income level, not just the people he considers rich.
In other words, are you ready to pay more state taxes?
This plan no longer taxes just “rich” Minnesotans. It attacks all Minnesotans.
It makes you wonder if the Governor proposed these job killing income tax increases because he thought they would make our tax system more progressive, or if he proposed them simply to avoid making a difficult, fiscally responsible decision. I wouldn't call raising taxes on hard working, low-income Minnesotans very progressive.
Further, the Governor completely ignored another way to make Minnesota's tax system more progressive - reducing taxes on low-income Minnesotans - something the Minnesota House did include in its budget.
It’s time for Governor Dayton to abandon his attack on hard-working Minnesotans and instead offer real reforms which will control state government spending, return fiscal sanity to our great state, and show the world that Minnesota is open for business.
The Minnesota House has not only shown true leadership by proposing nation-leading government reforms, but by providing tax cuts for all Minnesota taxpayers through the income and property tax system. We opted not to take the easy way and force tax increases on job creators. Instead our plan makes the tough choices necessary to streamline government for the 21st century and reduces the tax burden on Main Street businesses across the state.
Our proposals encourage job-growth and expansion by Minnesota companies so we will continue to be on the leading edge of the economic recovery. We strongly encourage Governor Dayton to drop his job killing tax increase ideas and follow suit.