If state must tax more, lines need to be drawn

It’s become quite evident that Minnesotans – all of us – will be paying more in taxes in the near future.

Senate Democratic leaders on Tuesday proposed their tax plan that would, they say, raise $1.8 billion in revenue through tax boosts on everything from income and business property, to tobacco and clothing. A day later, the House debated on its proposal that would result in more than $2.5 billion in tax increases; that plan includes a 4 percent surcharge on those who make more than $500,000 a year (it would end as soon as the state’s $854 million bill to schools is paid off) and an increase in the alcohol tax. The last time that tax was raised, Rudy Perpich was governor and the Twins won their first world championship. So clearly, it’s time that tax – along with some other current ones – goes up, although there is plenty of opposition to it.

No one likes to see tax hikes, and surely most legislators will tell us they have a difficult time supporting aggressive tax increases (some Democrats are even wavering in their support of some of the DFL-backed hikes), but when the alternative measure to wiping out the deficit and getting the state in the black is deep cuts to much-needed programs, we should be willing to bite the bullet to a point on taxes.

The Senate plan would also raise the state’s top tax rate from 7.85 percent to 9.4 percent on taxable income of more than $140,960 for married couples and $79,730 for individuals. When it comes to the income tax on individuals, we favor Gov. Mark Dayton’s approach of slapping the higher tax burden on only the top 1 or 2 percent of wage earners – the Senate’s plan is a little too far-reaching, as it would hit many more people.

In short, the Senate’s tax plan is too excessive, and we hope our leaders in both chambers can find some middle ground on taxes. Legislators also need to consider taking a line-by-line approach to cutting wasteful government spending. Balancing the budget can and should be done using a multi-faceted plan of action.

Higher taxes are going to hit all of us – it’s the price we pay to live in a state that has so much to offer so many people – and there are both good and bad pieces to these current tax proposals, but with a $627 million budget deficit and a consensus that education spending needs to go up and school IOUs need to be resolved, higher taxes are, unfortunately, inevitable.

While there might not be a win-win situation floating around the Capitol, our political leaders should be able to figure out how to avoid a lose-lose one.