The budget crunch and us

There is a workable solution to Minnesota’s financial problems: tax the rich.

by Tony Brown

I heard Provost Tom Sullivan on the news Friday evening. Applications to the University of Minnesota are up 10 percent, he said, with 36,000 potential students wanting to come to our Twin Cities campus. We will accept only 5,300. Such a highly selective group will no doubt form a strong cohort. Unfortunately, their timing may be off. They will arrive on campus at a time when the stateâÄôs historic, decade-long refusal to adequately fund higher education will begin to directly, negatively and noticeably endanger their access to a high quality education. As I understand, the University has worked very hard to maintain high standards of education as the state turns its back on what is, by any measure, its most valuable asset. Now it seems the state, governed as it is by Tim PawlentyâÄôs run for the presidency, in all its mean-spirited glory, will no longer fund higher education in any meaningful way. The fall from inadequate to meaningless is not a gentle one. Faculty will teach larger and larger classes with fewer and fewer resources. Education will suffer. And why are such dire pronouncements looking all too prescient? Just look at the state budget. Let us assume that if the budget was not so grim, then PawlentyâÄôs run for the presidency would refrain from hamstringing the University. The question for us would then be how to solve the budget crunch. As it turns out, I have the one workable solution: tax the rich. Or more accurately, require the rich to contribute their fair share to the state of Minnesota. If the rich ponied up as they ought to morally and economically, we would have little or no budget problem. By âÄúrichâÄù I mean those whose incomes stretch over $200,000. As the state budget office knows, the rich pay less income tax as a percentage of income than do the middle class. If you earn $75,000 a year, you are paying a higher percentage in state income tax than your neighbor whose income is $300,000. For too long now the rich have been getting âÄî if not a free ride âÄî a highly discounted ride. They tend to pay far less federal income tax as well âÄî as little as 16 percent, though thatâÄôs another (sickening) matter. So what would be a fair state tax rate for the rich? I suggest a flat 20 percent on any and all incomes above $200,000. If your income is, say, $350,000, it will make no discernable difference in your lifestyle if you hoard $325,500 after paying your current 7 percent state income tax rather than the still ridiculous $280,000 youâÄôd hoard after paying a fair 20 percent state income tax. If the rich contributed their fair share to the state that allows them to live their pampered lifestyle âÄî expensive housing, expensive cars, only the best food âÄî we would be far from the dire economic straits we are now in, the straits into which, ironically, all but the rich are being thrown. After all, the various cuts to state services and to state education will negatively impact only the middle and working classes. The rich can always go private. But there is a solution, and itâÄôs very simple. ItâÄôs time the rich paid what they ought to have been paying for a long, long time now. Tony Brown, University faculty