New tax bracket not enough for Democrats?
Democratic lawmakers in Minnesota believe they have found the goose that lays the golden eggs. Not only are they proposing a fourth-tier tax bracket that would raise rates on the highest-earners; this week they rolled out a proposed surcharge on incomes above $500,000. It must be nice to feel free to play with other people’s money, without a pang of conscience.
Here’s what House Speaker Paul Thissen had to say about the surcharge: “Our plan acknowledges that the bill we owe to our schools is past due. We owe our school kids over $800 million and the right thing to do is pay them back.”
While it is true that the state owes money to the schools, it is also true that the state created the bill. That is, it determines state aid to schools. So, when it comes to solutions, the state could implement a variety of fixes. It could prioritize funding so that schools get money first. It could force school closings and consolidations to maximize efficiency. It could even change the funding formula so that schools are owed nothing. Is that last one too capricious? Yes, kind of like imposing one-time surcharges on citizens.
What is clear to us is that Democrats want to avoid any hard decisions. New to power, they are seeking tax hikes in order to spend more. This is a different path from the previous Republican rule, under which the state budget increased but not in order to fulfil somebody’s wish list. The state should not be a greedy, grasping thing. It should seek low, broad, consistent, limited revenue that it uses to fund priorities. And only some things should be priorities.