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Both parties missed a win this session

September 1, 2011
Marshall Independent

To the editor:

In George Orwell's Animal Farm the pig comments: "All animals are equal, but some animals are more equal than others". So too with taxes. Any politician who sputters, "No new taxes" when a government is running a deficit, only transfers the revenue stream downhill, the same direction as what comes out of the opposite end of the pig. Downhill in Minnesota means local tax hikes to replace state revenue. We certainly see this in the "No new taxes" crowd's stealth elimination of Homestead Market Value Credit to property taxes this summer. It's a regressive change with the greatest damage falling on low-income homeowners, not the folks most likely to contribute to political campaigns. That smells like pig and identifies which pigs are most equal in the eyes of those politicians.

Voters in Iowa understood this when they sent our late Governor Pawlenty packing at their straw poll. He had no business aspiring to higher office after leaving our state with an unresolved $5 billion deficit obscured by withholding money from schools and borrowing.

Also nobody ought to be rewarded, read Governor Dayton, when they propose to cure our revenue problems by taxing only one segment of society, the richest. Their income is way too inconsistent in a recessionary environment to rely on as the sole balancing source for curing our deficits. Of course top earners ought to pay more when we are in a pickle, but so also should the better paid segment of the middle class. We in the middle class are highly dependent on state and local public services, and have to be part of any revenue fix.

Another short-sighted governor, the wrestler Ventura, and an over-eager legislature permanently cut income tax rates for all of our tax brackets. Middle income tax rates were cut about 1 percent from 8 percent to 7 percent and the top category was cut .65 percent, from 8.5 percent to 7.85 percent. This worked in boom times but causes a real problem now with our weak economy.

Last session our Legislature did all the cost cutting that was politically possible with our customary divided government. But they also needed to say, instead of "No new taxes," "How about a temporary return to some old taxes until we're out of this mess?" One reasonable scenario would have been to again ask the well off to pay income taxes at their pre-Ventura rate of 8.5 percent on incomes above $250,000. That's about one-half percent below the 9 percent top rate applying to incomes above $65,000 in nearby Iowa; and would not have caused an exodus of high earners from our state. In our opinion it would also have been OK and politically defensible to require the middle class here with taxable incomes of $65,000 and up to start paying the 7.85 percent rate at that level instead of at the 2011 threshold of $134,000. Doing so would have been an exercise in good judgment and a win for both of our major parties.

Tom Runholt




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