Commentary: The time has come for all to pay fair share

Rep. Tim Kelly would like you to believe that the current budget impasse is only the fault of a recalcitrant governor, rather than any fault of the Minnesota GOP (R-E, May 28/29).

First, Kelly wants you to accept that the majority in the legislative bodies, by themselves, get to decide what issues are on the table for the budget. The governor has repeatedly said that he favors tax increases on the wealthiest wage earners in the state. In fact, he even ran on it.

I will get to why that makes sense in a moment but first, a refresher: The governor is a serious player in budget negotiations. Not that long ago Tim Pawlenty forced special sessions because his version of the budget wasn’t passed. Kelly can’t pretend that the governor hasn’t been clear in his “fiscal vision” or that he doesn’t have a voice in the budget process.

More importantly, Kelly further perpetuates myths regarding the state’s economy. Despite his rhetoric, Minnesota doesn’t have a spending problem, Minnesota has a revenue problem. The recession has radically reduced tax revenues, combined with previous poor tax policy under Pawlenty.

The State 2011 Tax Incidence study concluded that the share of tax revenue (between 2006 and 2008) for state income and business tax fell, while local and property tax revenue increased.

The study further concluded that “the Minnesota tax system in 2008 was somewhat regressive.” When the combined effects of state and local taxes are considered, top earners had a lower effective tax rate than households making less than $9.782 a year (Minnesota Department of Revenue).

Far from soaking the rich, Dayton only asks all Minnesotans to pay their fair share. And why shouldn’t the rich have to pay their share?

From numerous national studies, the middle class has been treading water for the last decade at least. The share of total income going to the top 1 percent of earners rose from 8.9 to 23.5 percent between 1976 and 2007. In that same time frame, the average inflation adjusted hourly wage declined by 7 percent.

The growth in the US economy has gone to the top 1 percent over the last decade, while median U.S. household income fell by 4 percent. In the face of this, what is the Minnesota GOP’s solution? Gut all state spending to ensure that the rich stay richer than they have ever been.

Kelly trots out the tired mantra of “job killing tax increases” to justify the state GOP budget. If tax increases killed jobs, we would assume the converse would also be true, that tax cuts create jobs. Instead, we find that George W. Bush had the worst job growth record of any president since the Labor Department started keeping records, and that without even including job losses due to the recent recession.

More to the point, the state GOP budget would be the real job killer. There are numerous cuts in that budget that would have an immediate and profound effect on jobs in the state, from education to health care. Yet Minnesota GOP continues to insist that the Dayton budget would impact job growth without providing any compelling evidence for that assertion.

As the Winona Daily News recently put it, “There is scant evidence to prove that raising the tax rate on the highest earners drives wealth away. ... It’s time for everyone to pay their fair share.”

Rep. Kelly has shown that he can be thoughtful in his approach to issues, but in this case his strict adherence to ideologically based economic policies that fly in face of all the evidence does not demonstrate that trait.

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