In study on tax fairness, Minnesota looks … fair

The 47 percent aren’t getting a fair shake, says a new study. In The Washington Post, Niraj Shoshi reports, “State taxes favor those with the highest incomes. That’s according to a new report by the Institute on Taxation and Economic Policy report, which finds that on average the bottom fifth of earners pay proportionally twice as much of their incomes in state and local taxes as the top 1 percent. Such systems that are skewed toward the poor are also less stable in the long run, given the decades-long trends of growing income inequality, the report’s authors argue. … While Delaware’s income tax is not particularly progressive, it’s heavy reliance on income taxes instead of consumption taxes make its system the least regressive overall. Though not comparable to a state, D.C. ranks as the next least regressive tax system, followed by California, Oregon, Montana and Vermont. D.C., Minnesota and Vermont make their tax systems fairer by providing generous refundable Earned Income Tax Credits to lower-wage earners.” Overall, Minnesota is 45th most “unfair.” South Dakota? Fourth. Which is to say, great for millionaires.

Speaking of neighbors. Dave Zweifel,  the editor emeritus of Madison’s Capital Times, writes: “While [Wisconsin Gov. Scott Walker] claims to have saved the state from former Gov. Jim Doyle’s $3.6 billion budget deficit, he actually enters the new biennium — comparing apples to apples — with a $2 billion deficit himself. At least Doyle had the excuse of trying to balance the budget during the country’s biggest recession since the 1930s. Walker should have been riding the wave of the greatest recovery in two decades.”

Clean the slate and start over. Christopher Snowbeck at the Strib says, “Senate DFLers have introduced a bill that would eliminate the MNsure board, and create a new state department to manage Minnesota’s health insurance exchange. … Under the bill, the governor would have a clearer line of authority over the exchange, [Sen. Tony Lourey, DFL-Kerrick] said, while the Legislature would have more direct oversight for MNsure’s budget. The legislation is not an indictment of the current seven-member board, he said.” Of course not, no one would think that.

The Feds are kicking back $26 million for conservation. The Strib’s Josephine Marcotty writes, “The Red River, the imperiled golden-winged warbler and environmentally minded Minnesota farmers all will benefit from $26 million in new federal funding designed to boost conservation and clean up agricultural water pollution in the state. The three projects, which all must provide significant matching funds from other sources over the next five years, are part of a revamped $370 million program announced Wednesday by the U.S. Department of Agriculture’s conservation arm.”

Ebola. It’s so election-season 2014. The AP says, “State health officials say they won’t be done watching for the spread of Ebola for at least another year. The Minnesota Department of Health is currently monitoring 47 residents who traveled from the West African countries ravaged by the deadly virus. As of Sunday, the state had cleared 216 travelers after a 21-day monitoring period. No cases have been confirmed in Minnesota. Health officials updated state lawmakers on their Ebola prevention efforts Wednesday. The department will ask the Legislature for about $900,000 to cover Ebola-related costs through June of this year.”

Cliffs, big Cleveland-based mining operator is scaling back to just Minnesota and Michigan. Says John Myers of the Forum News Service. “[Lourenco] Goncalves has been the chief executive officer of Cliffs just since August, but he’s already making headlines as he tries to shed debt as well as money-losing foreign operations to save the company’s U.S.-based taconite iron ore mines and processing plants. ‘Cliffs will be a 100 percent U.S.-focused operation; Minnesota and Michigan,’ Goncalves said in a telephone interview Tuesday. ‘That’s where the money is. That’s where we can be a profitable and sustainable business.’”

Ok, let’s think about Vikings stadium-appropriate art. At MPR, Tim Nelson reports, “The Vikings plan to purchase as many as 100 works of original art for the new stadium. Team officials say the art-buying spree will amount to a multimillion dollar upgrade to the $1 billion stadium’s amenities. Minnesota-made works will be the focus, said Tanya Dreesen, who’s leading the art project for the team. ‘You’re going to see different treatments, from wall graphics to original commissioned pieces to photographs,’ she said. ‘And you’re going to see them throughout the concourses.’ I’m thinking: a statue of Randy Moss mooning the stands molded out of recycled e-pulltab machines.

Rochester is thinking very big about its makeover into a “destination medical center.” But check out the salaries projected for those guiding the plan(s). MPR’s Elizabeth Baier says, “But before planning can really get rolling, there’s the matter of who’s going to pay for the bureaucracy needed to make it work. In the first five years, it will take $21 million to pay the salaries and other operational expenses for the two governing boards created by the Legislature in 2013, the Mayo Clinic-led Economic Development Agency and the Destination Medical Center Corporation.”

Inevitably: Peter Cox of MPR writes, “The Minneapolis Police Department’s former deputy chief of patrol has filed a federal lawsuit against the city and Police Chief Janeé Harteau over a recent demotion. Eddie Frizell, who ran unsuccessfully for Hennepin County Sheriff after 22 years with Minneapolis police, was demoted to commander of operations and administration when his position was eliminated in November.”

Yeah, just because you’re using drugs or have skipped out on a warrant doesn’t mean you don’t have your precious Second Amendment rights. Abby Simons of the Strib says, “The Minnesota Bureau of Criminal Apprehension (BCA) quickly shelved a new series of firearm permit-to-carry applications this week for overstepping the bounds of what questions law enforcement can ask residents who apply to purchase or carry a gun. When the updated 2015 Minnesota Uniform Firearm Application Permits went out to law enforcement agencies last week, gun rights advocates quickly cried foul over a questionnaire that asked, among other things, if applicants had served in the military, used drugs or ever fled the state to avoid prosecution. Advocates said the questions violated applicants’ privacy and created a needless hurdle to exercising Second Amendment rights to bear arms.”

Comments (19)

  1. Submitted by Pat McGee on 01/15/2015 - 08:35 am.

    MPD

    There are serious issues in MPD. It is not only the Chief’s relationship with the officers. Civilians are also treated with disrespect. There are at least 5 individuals who have filed
    lawsuits with very credible claims against the chief and the city.

    MPD came in dead last in terms of employee morale and engagement of all city departments. (Ask to see the results.) Other departments are taking active and open steps to address any and all concerns and questions raised by staff in their surveys. MPD is ignoring the issue, except to tell management type staff to not let employees answer the questions truthfully ever again.

    There are also issues with vendor contracts and doing business without signed contracts.

    There are major ethical and legal violations in the department that warrant the light of day. If you can find someone who is not afraid to talk to you.

    • Submitted by Richard O on 01/15/2015 - 01:39 pm.

      MPD – serious issues

      It would be helpful for you to cite some specific examples to support your allegations. Obviously, Chief Harteau is shaking things up.

  2. Submitted by Pavel Yankovic on 01/15/2015 - 08:49 am.

    If one defines fairness….

    as penalizing the hard working risk taking high income earners then Minnesota is very fair. Minnesotans never met a tax they didn’t like as long as those with higher incomes are paying it and the average guy is spared.

    • Submitted by Richard O on 01/15/2015 - 01:52 pm.

      Sorry, the point of the article is that so-called “high income earners” are paying proportionately less taxes than those with lower income. Oh, and you forgot to insert the phrase “job creators” when referring to high-income earners.

    • Submitted by Harris Goldstein on 01/15/2015 - 03:51 pm.

      Hard working risk taking high income earners

      I love the hard working, risk taking, high income earners. I even love the hard working, risk taking, low income earners. The risks they take is a rising tide when they succeed.

      But name a few of these high income risk takers. I’m sure they’re out there but the reality is that most very high income earners are not really risk takers. Most, not all but most, are more like Gregg Steinhafel than Glen Taylor.

      In fact, I’ll go as far as to say that very few risk takers fall in that high income area until some time after they succeed. They get their money not from salary, can’t-fail stock options, and bonuses, but from building a business and owning a majority stake.

  3. Submitted by Greg Price on 01/15/2015 - 08:50 am.

    South Dakota has no state income tax…hard to believe that makes us unfair….

    However….if that also means that we have no mechanism to allow the lower earning percentage of our state to take out more than they contributed…ala the MN socialistic welfare support system….I guess we will have to take that beating.

    Little tough to draw comparisons when MN has over fifteen times our population as well….

    MN biggest issue is that you can’t fight ‘Twin City Hall’….

    Urban socialista’s make the decisions and the rest of the state has to go along for the ride….

    My $.02

  4. Submitted by Dennis Tester on 01/15/2015 - 10:01 am.

    Regressive/Progressive

    “Fairness” depends on how you define fair. If we all paid the same price for a loaf of bread, regardless of how much income we have, most people would say that’s “fair.”

    If we all paid the same price for a gallon of gasoline, regardless of what type of vehicle it’s going into or how well-dressed the driver is, most people would still say that’s “fair.”

    If we all paid the same amount of property tax for the same size house on the same block, regardless of our income, most people say that’s fair.

    But if we all paid the same percentage of taxes on our income, regardless of how high or low that income is, people on the Left think that’s UNfair.

    Why? “From each according to his abilities, to each according to his needs.” – K. Marx

    • Submitted by George Carlson on 01/15/2015 - 12:47 pm.

      Karl Marx and Luke

      “From everyone who has been given much, much will be required,,, .” Luke 12:48 New American Standard Bible

      • Submitted by Dennis Tester on 01/15/2015 - 02:00 pm.

        Notice

        how the government isn’t mentioned there. Christ means for us to give personally to our fellow man, not for the government to take it from us and then give it to someone else after taking their share off the top.

        • Submitted by RB Holbrook on 01/17/2015 - 12:02 pm.

          Not exactly

          I suggest you read Matthew 25:31-46, where Jesus makes it clear that the judgment will fall on nations, not just on individuals.

          I get the overall sense from reading the Gospels that Jesus was not one to split hairs about where the charity to our fellow man comes from

  5. Submitted by Keith Lusk on 01/15/2015 - 10:37 am.

    South Dakota vs Minnesota

    If you read the Washington Post article in full, you’d know that what’s being discussed is the effective amount that high income earners pay in taxes compared to the effective amount that low income earners pay. As a percentage of what they make, low income households pay a higher percentage of their income in taxes in South Dakota compared to Minnesota. As a dollar amount, of course low income earners pay less; they don’t have the ability to pay more.

    South Dakota can be a great place to live, but it’s even better if you’re a business owner or relatively wealthy. There’s no corporate tax, which is a big reason why many businesses move their operations there. There’s no income tax, but you can find a Video Lottery mini-casino on almost every street corner to make up for that fact. Most states also have a cap on usury rates, or the maximum amount of interest that credit cards can charge. South Dakota does not, which is why banks like Citibank and First Premier Bank have their credit card operations there. Google First Premier Bank’s credit cards and you’ll be shocked at what they charge in interest and fees. Do you see how all of these are kind of skewed towards making the rich richer at the expense of the already poor?

    As someone who grew up poor in a tiny little South Dakota town, I can tell you that it’s not easy being poor, especially there. Every time I see someone lambast poor people for being poor, I question whether they’ve ever actually experienced real poverty. Although I love to go “home” to South Dakota, I’m saddened every time I do because I see all of the small towns getting even smaller. “Family” farms keep getting swallowed up by big farms and old homesteads and shelterbelts are being demolished and plowed over to plant more corn. So you can have lower taxes for the wealthy, or no taxes for corporations, but at who’s expense? You got it, the people that are working too hard to try to make ends meet to have the time to stand up and notice that they’re not getting a fair shake.

    I’ll take the “MN socialistic welfare support system” any day over using fellow Americans’ hardships as a means to enrich the already rich. Nobody loves to pay a lot in taxes, but as Supreme Court Justice Oliver Wendell Holmes, Jr. once said, “Taxes are the price we pay for a civilized society.” The least we could do is try to ensure that taxes are applied equally to everyone, regardless of income.

    • Submitted by Todd Hintz on 01/15/2015 - 12:39 pm.

      Tax Rates

      Well said, Keith.

    • Submitted by Dennis Tester on 01/15/2015 - 12:52 pm.

      Flat tax advocate?

      “The least we could do is try to ensure that taxes are applied equally to everyone, regardless of income.”

      If I believed in an income tax, I could agree with a flat tax. But since an income tax is a tax on a man’s labor, it seems to me that any hard-working man would oppose it on principle. A consumption tax is fair in that it taxes the people who consume the most. The more you spend (rich folks we can assume) the more tax you pay.

      Sounds “fair” to me.

      • Submitted by jason myron on 01/15/2015 - 01:21 pm.

        Well, I’m a hard workng man

        that’s married to a hard working woman and both of us bring in a nice income. We do not oppose an income tax, but we also recognize that we live in a society and if those taxes contribute to the betterment of that society, it’s a win/win for all. No man is an island…

        • Submitted by Dennis Tester on 01/15/2015 - 02:02 pm.

          You can contribute to society

          without going through the government. Think of it as eliminating the middleman.

          • Submitted by jason myron on 01/15/2015 - 03:39 pm.

            Sorry…

            I don’t think income taxes are some sort of piracy. It’s the price we pay for living in a country with a multitude of opportunity.

      • Submitted by Dennis Wagner on 01/18/2015 - 07:23 pm.

        To its natural conclusion!

        Given the UN-moveable work reward tax scenario that apparently is a mantra of Mr. Tester. It appears if someone where business savvy enough to control virtually the entire US economy, the other 330M or so folks would be principle bound to extend them additional courtesy to get richer as they got poorer, and to further more or less be in their servitude! The flat tax is not principle based, feel free to cite the principle. Example: If you have $10Bil to lose through social instability in American, should not your contribution to stability efforts be greater than say some that has a newt worth of $100? Your principles and arguments only work because you place them in a working context. Example 2: The flat tax is based on what fairness doctrine? The wealthy have already corrupted the tax system with special breaks, example LT Capital gains are taxed less than blood and sweat income. i.e the argument of risk takers bears no fruit. Sam Walton’s kids took “0” risk yet are rewarded in the “Billions” doubtful that they even work at all! However we digress: An income of $750 Mil a year spends 10% on goods and services (irrelevant if it is before or after wage based taxes) net tax is against 10% of their income. Our family takes home $75K a year and spends 90% on goods and services, our tax is against 90% of our income. Fell free to demonstrate the fairness in B getting taxed against 90% of their income while A the better off of the 2 only gets taxed against 10%?

    • Submitted by Rachel Kahler on 01/19/2015 - 09:59 am.

      Ditto

      Right down to being raised in a small SD town.

      South Dakota’s “economy” has recently shifted toward hiding money rather than making it. Nothing like driving down the main drag of any sizable town in order to reliably find a 1:1:1 ratio of casinos:payday loan:pawn shops. In the meanwhile, the wealthy can shelter their money with absolutely no economic benefit to the citizens of the state whatsoever–except maybe the one or two people who manage the funds and a lawyer or two. If you think that those people are actually contributing to the state’s economy, think again–no income tax, and very little to spend on for consumption tax purposes (or even commerce purposes), and virtual banks take up very little property, so next to no property taxes. I find my visits “home” depressing.

  6. Submitted by Richard O on 01/15/2015 - 01:28 pm.

    ” …a statue of Randy Moss mooning the stands molded out of recycled e-pulltab machines.”

    Ah yes, a stroke of genius. I knew that if I waited long enough there would be a compelling reason for me to visit the new stadium. My sincere “thanks!”

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