Editorial: Income tax increase just won’t fly
Published 12:00 am Sunday, May 15, 2005
It’s too big; it simply comes far too late in the 2005 legislative session for any serious consideration; it simply isn’t going to fly.
Those are three good reasons why Senate DFLers should either revise downward &045; sharply &045; their proposed income tax increase or just let it go.
The proposal calls for a new, fourth tier in the state’s current income tax system. Currently, the tax rate on those in the highest income level is 7.85 percent. The Senate proposal would create a temporary new rate of 10.65 percent on taxable income for married couples with a combined income of $250,000 or more and a taxable income for single filers above $166,000.
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It’s projected the new income tax tier would raise about $800 million in the next two fiscal years. Democrats say the added revenue would be used to pay more for state K-12 education, preserve MinnesotaCare and provide property tax relief &045; all laudable goals.
But to try to find that money with a new income tax level at this stage of the session, even though it is labeled temporary until the state’s books are balanced, just won’t wash. There are other ways to reach those goals, including increasing taxes on cigarettes and being more equitable in how property taxes and property tax relief are distributed.
Yes, some will make the argument that those earning such six-figure salaries should pay more. But the argument can also be made that to create another income tax tier will hurt business expansion, business recruitment and therefore overall state revenues that flow from business activity &045; not to mention the jobs that are created.
Even the tax proposal’s most ardent supporters know it was likely put forth as an attempt to put another bargaining chip into the pot when conference committees meet to hammer out
But if that’s the case, we find it to be a ridiculous miscalculation.
Bargain for what? And for what political purpose? If Senate DFLers decided to make some kind of foolish last stand behind this proposal &045; which would surely derail the 2005 legislative session &045; they would most definitely not find majority public support.
If this was part of the Senate DFL strategy from the start of the session, then it should have been put forth much sooner so that it could receive real debate, real consideration.
But if it was just something decided upon recently to kind of toss into the final few days like a live political hand grenade, then it was senseless.
(Mesabi Daily News of Virginia)