Taxes favor the rich

A new study shows the increasing tax burden on middle- to low-income households.

Once again, a new state tax study has highlighted the inherent unfairness of our tax system. On Monday, a state Revenue Department study was presented to the Minnesota Senate Tax Committee, which showed that wealthy Minnesotans are currently paying a slightly smaller share of their income in state and local taxes, while tax burdens for middle-class families are increasing. Given the alarming, but not surprising, findings of the report, this is just the ammunition state Democrats need to demand an urgent tax reform in Minnesota.

The biennial report also highlighted the current trend of taxes shifting away from businesses and toward individuals. Looking to the future, the study projected that Minnesota’s state and local taxes will become more regressive by 2009. This projection insinuates that the percentage of income an individual pays in taxes declines as his or her income rises.

These findings provide more than a sufficient amount of information for the state to take immediate action to even the tax burden. State Democrats are, for good reason, demanding an increase in income taxes on high-earning individuals. Given the study’s findings that the tax burden is shifting toward individuals, it would be reasonable to boost business property taxes.

Gov. Pawlenty, however, has repeatedly threatened to veto any state tax increases, and his resolve to prevent an increase in taxes will impede any plans of tax reform. Pawlenty’s camp states that it would be very difficult to make the claim taxes in Minnesota are too low, given the U.S. Census Bureau ranked Minnesota’s state and local taxes the fourth-highest per capita in the nation.

This study clearly shows that the people at the top of our society are not paying their fair share. The findings are exactly what the Pawlenty administration wanted to avoid as the new session started and exactly the political ammunition state Democrats were seeking. As the major tax bills for this season are currently being assembled, the proposal for higher income taxes for top earners should and most likely will be included in the bills.