During the Tuesday Minnesota Chamber of Commerce debate among guv candidates in Nisswa, IP nominee Tom Horner asserted that DFL nominee Mark Dayton’s tax-the-rich proposal would amount to a “doubling of the tax rate” on the highest-income Minnesotans. Horner said such a move would be a job killer.
In past debates, Dayton has disputed similar assertions and his campaign assures me that that Dayton “will not approach anything approaching a doubling of the top rate” — currently 7.85 percent — in Minnesota’s state income-tax structure. Dayton didn’t object when Horner said it Tuesday but when I contacted the campaign, Dayton said he wished he had objected and would do so whenever anyone claims he will be double the rate.
The trouble is, Horner has no real backup for his statement, but Dayton still hasn’t specified what he will do to the top tax bracket other than propose to raise it.
Dayton hopes to extract $4 billion in new revenue from the highest income Minnesotans, which would go a long way to fill in the estimated $6 billion deficit that the next governor will face. And he has proposed to create two new top tax brackets, one affecting individuals with taxable incomes of $130,000 or family incomes above $150,000 and another even higher one for families with much higher incomes. But he has never said what the boundaries would be between the two new brackets, nor what the tax rates would be.
Dayton says he hopes to keep Minnesota’s top rate at or below the 11 percent top marginal rate in Hawaii, which is the highest in the country at present. But that’s expressed as a goal, not a guarantee.
Horner is skeptical that Dayton can raise $4 billion without going higher than 11 percent. He believes it will take a significantly higher rate, amounting to roughly a doubling of the current top rate. “That’s my perception,” he said.
My request to the Horner campaign to back up the “doubling” statement produced a call from Jim Mulder, Horner’s running mate, who, until recently, has been executive director of the Association of Minnesota Counties. Mulder said he believed the state Revenue Deptartment had done a study that showed it would take roughly a doubling of the current top rate to raise as much revenue as Dayton wants to raise. But Kit Borgman of the Revenue Department says no such study exists. Horner says they heard about such a study, but perhaps it was not a formal published paper. In other words, he has no formal backup for what he said in Nisswa.
Dayton says he doesn’t plan to get the entire $4 billion just from the income tax. He also has talked about a change in state law to crack down on snowbirds who spend just enough time in another state that they don’t have to pay Minnesota taxes. He also has talked about a higher property tax bracket that would apply only to million-dollar homes.
Until now, Dayton’s explanation for not specifying the rates has been that he doesn’t have the computer capability to model the whole state tax structure.
Dayton spokester Katie Tinucci also emailed me thus:
“We are currently discussing with the Department of Revenue and the Senate Tax Committee what help they can provide us in modeling different scenarios/options. We and they are both very sensitive to the fact that we are making our requests as a partisan political campaign, not as ‘concerned citizens.’ Nevertheless, we hope to soon reach agreements, whereby we will be able to submit a limited number of scenarios to one or both of them.”
Horner says OK, he remains skeptical of Dayton’s ability to raise $4 billion in new revenue without roughly doubling the current rate, but if Dayton puts out a concrete plan, he will reassess.
Until now, Dayton has won plaudits from me among others for putting out the most specifics about how he proposes balance the 2011-12 budget. His failure to specify a rate is a smudge on this general claim. Horner now says he will put out a complete plan on Monday with plenty of detail. Said Horner:
“The critical issue is not who is doing more negative advertising, or trackers or stalkers or whatever [these are shots at Dayton, who recently complained about negative advertising and trackers] but to put specifics on the table. We have to use this campaign to create mandates for what will have to be done.”