Trying to soak the rich in Minnesota

Though the pitched battle is right now just to the east, in Wisconsin, we here in Minnesota are bracing for a big fight over taxes and the state budget.  The newly minted DFL governor, Mark Dayton, who won a three-way race against two Republicans by 9000 votes, proposes to close the gaping $6.2 billion deficit by creating a new tax bracket for the state's highest earners.  Republicans say he's crazy, the state doesn't tax too little, it spends too much--especially, it seems, on public employees and poor people. 

I'm all with Dayton, but I wish he wasn't so apologetic about his own program.  Currently, Minnesota has three income tax brackets: 5.35%, 7.05% and 7.85%.  So, for example, married couples filing jointly pay in at a 5.35% rate if their taxable income is under $33,280, at a 7.05% rate if their taxable income is more than $33,280 but below $132,220, and at a 7.85% clip if their taxable income exceeds $132,220. 

Here's what's wrong with that: it distinguishes between my dentist and me but not between Joe Mauer and his dentist. My dentist earns perhaps five times as much as I do.  Joe Mauer probably earns more than 50 times as much as his dentist.   If my dentist should pay in at a higher rate than I do (and she should), then surely Joe Mauer should pay in at a higher rate than his dentist.  

Dayton's proposal addresses this situation, however modestly, by creating a fourth bracket that would make married couples filing jointly pay in at the rate of 10.95% if their taxable income is north of $150,000.  Moreover, he would impose a three-year 3% "surcharge" on incomes above $500,000. 

I think these would be sensible proposals even if there were not a huge shortfall in the state budget.  But Dayton, when stumping for them, looks and sounds like a man confessing that he poisoned the family dog.  I like an under-confident person, but I'm afraid Dayton conveys the idea that his critics might be right.  Else why the grimaces?

James Surowiecki and Robert Reich have more on the general topic.

Comments

[Timothy Eastwood]

Hmm, that makes sense. The dentist metaphor is brilliant. I quickly understood the situation and I think the other readers will easily understand this as well. It just depends on how Dayton would explain this to his constituents.