Republicans, Democrats both seem wrongheaded

Minnesota Gov. Mark Dayton’s proposed state tax overhaul has generated criticism from various quarters, including in this space, although we believe he is moving in the right direction.

Dayton has a wide-ranging plan in mind. It would expand the sales tax to more transactions, including services, but lower the overall rate from 6.875 percent to 5.5 percent. It would raise taxes on the wealthiest Minnesotans and on cigarettes, by $1 per pack. At the same time, his plan includes a $500 yearly property tax rebate to all Minnesota homeowners. Schools, colleges and job-creation programs would get more funding.

Criticism seems to come from two sources: Those on the right who do not want to see any tax raised. And those lawmakers in Dayton’s own party who want to know how the changes are going to affect their legislative districts. Both criticisms are coming from the wrong place policy-wise.

Republicans need to understand that there is nothing sacred – nothing – about the current tax system. In fact, it is an abomination, chocked full of giveaways to special interests. It is not fair and it is out of date.

For newly elected Democrats worried about the impact on their constituents, their concern is misplaced as well. The goal of a state revenue system should be fair, broad and low taxation. Start there. Not with who will lose what if the system is revamped to meet that goal. If someone is “losing” some giveaway through the reforms, they probably should not have been receiving it in the first place.

We agree that the governor’s plan could be tweaked. But his courage in suggesting a major overhaul should be applauded, not undermined.