Thursday, May 13, 2010

The Minnesota Prelude : Land of 10,000 tax increases.

The Wall Street Journal reports:
Minnesota has a rich Scandinavian heritage, and if Democrats in the state legislature have their way the state is headed toward Scandinavian tax rates. Governor Tim Pawlenty, a likely GOP Presidential candidate, has now smacked this slow, fat pitch out of the ballpark.

Earlier this week Democrats who control both legislative houses passed a three-year $1 billion income tax increase. This would raise the top tax rate to 9.1% from 7.85%, taking the rate even higher than that in New Jersey and New York (outside of Manhattan).

Yesterday Mr. Pawlenty vetoed this tax foolishness, as he has three previous tax hikes as Governor. The tax increase was targeted at the rich, but it applied to individuals with an income of $113,100 for singles and $200,000 for joint filers. Note how the definition of "rich" keeps becoming more expansive.

An analysis by the state department of revenue found that nearly six in 10 filers hit by the higher rates would be farmers or small business owners—i.e., the people who write paychecks. The higher rates would go away in 2013 if the state has a $500 million surplus, though the spenders would make sure that day never arrived.
Here's a truly great quote:
Higher tax rates don't produce prosperity or balanced budgets—as we can see in New Jersey and New York, or Greece and Portugal.
Ouch.