Sunday, June 27, 2010


"Taxes should be proportioned to what may be annually spared by the individual."
- Thomas Jefferson to James Madison, 1784. -

"Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise."
- Thomas Jefferson to James Madison, 1785. -

Originally, I had intended this post to be about the divisions in this country as we approach the 234th anniversary of its founding. But I saw this piece in today's Minneapolis Star Tribune written by former Minnesota Senator Mark Dayton, himself a wealthy descendant of the Dayton-Hudson department store chain founders, and it resonated with me. It is, in my view, a strong indictment of the fallacies and end results of the Ronald Reagan/George W. Bush, conservative Republican anti-tax, tax-cut-for-the-rich economic philosophy and practice. It also provides an insight into the potential disaster electing Republican Tim Pawlenty President would be. Sen. Dayton is looking to replace Pawlenty as Minnesota's Governor. The graph at very bottom was taken from a past post in one of TomCat's ever-thoughtful and informative Politics Plus blog.

Does the deficit call for wealthy to pay their share?


Gov. Tim Pawlenty has protected the rich from paying their fair share of taxes, and the results are chronic budget deficits, drastic cuts in funding for education and other essential services, and increased property taxes.

During Pawlenty's two terms, state funding for our schoolchildren has been reduced by $1,400 per pupil. As a result, several districts can afford to provide school only four days a week. Others are forcing more and more children into overcrowded classrooms. Thousands of dedicated teachers are being laid off.

After college, I taught ninth-grade science in a New York City public school, with 32 students in each class. I learned how much skill and dedication it takes to become a good teacher. I also learned that it's not possible for one teacher to meet the educational needs of 32 children.

So, when I visit a fifth-grade class in Rochester with 36 children and only one teacher, I know something is seriously wrong.

And when I see other overcrowded classrooms throughout Minnesota, I know that we are underfunding public education, and that this failure is jeopardizing our children's futures and our state's future.

To make matters even worse, Pawlenty's most recent insistence on protecting tax loopholes for the rich led him and the Legislature to "shift" almost $2 billion owed Minnesota's school districts into the next biennium. Their fiscal irresponsibility has driven the next projected budget deficit to almost $6 billion.

How can the next governor and Legislature balance the state's budget during the first five months of 2011? The best way is to add jobs. Once again, Pawlenty and his policies have failed Minnesota. Since he became governor, there are 200,000 more people living in Minnesota, yet there are 12,000 fewer people working in the state. Yes, there was a national recession; however, during his eight years, Minnesota was one of the 10 worst states for employment growth. Putting more people back to work must be our next governor's top priority.

Until many more people are working, however, there are only three ways to eliminate a $6 billion budget deficit:

1)Raise taxes on the richest Minnesotans;

2)Raise taxes on the rest of Minnesotans; or

3)Cut $6 billion more in state spending.

The second has already happened under Pawlenty. The state auditor reports that property taxes have more than doubled in Minnesota during the past decade. The property tax is the most unfair tax, because it must be paid whether someone has a job or an income, or whether a farm or business is producing a profit. Many senior citizens and others on fixed and limited incomes are being forced out of their homes by rising property taxes.

Option No. 3 is superficially appealing. No one likes paying taxes. It's simple to say, "Let's cut $6 billion, which is 16 percent, of the next biennial budget." However, as my friend Tom Harkin, a U.S. senator from Iowa, likes to say, "For every complex problem, there is a simple solution. And it's almost always wrong!"

Ninety-three percent of the state's budget is spent on education, health care, human services, transportation, public safety, property tax relief and local government aid. Another 3 percent goes to debt service. GOP Rep. Tom Emmer pretends that merging state agencies will eliminate the deficit. That's absurd fiction, and his continued pretension insults the high intelligence of Minnesota voters.

The truth is that state government spends its revenues on us, the people of Minnesota, and on services that benefit us. Certainly there can and must be improvements and greater efficiencies. However, eliminating $6 billion of spending would have severe consequences, which is why Emmer is afraid to tell us what they are.

There is a much better alternative. As governor, I will make the richest Minnesotans pay their fair share of taxes. The Minnesota Department of Revenue reports that, as a percentage of income, the wealthiest 10 percent of our citizens pay only three-fourths as much in state and local taxes as do the rest of Minnesotans. The richest 1 percent, who on average make over $1.2 million a year, pay only two-thirds as much.

If they all paid the same percentage of their incomes as everyone else, there would be an additional $4 billion in revenues for the next biennium. That would eliminate two-thirds of our state's next budget deficit.

It would allow us to begin to restore our commitment to education. To serve our senior citizens. To lower property taxes.

The current candidates for governor should be judged by this very important measure. Are they for protecting tax breaks for the richest Minnesotans, or for building a better state for all Minnesotans?

More than anyone else, I will close tax loopholes favoring the rich, make them pay their fair share of taxes, and invest that money in better education and a better future for all Minnesotans.

Former U.S. Sen. Mark Dayton is a DFL candidate for governor.
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Conservative Republicans, the wealthy elite, and Tea Party activists love to complain about taxes, even though many of them pay none at all or pay a much lower proportional percentage than do working and middle income Americans. They infer that they are being punished for being wealthy for showing initiative and generating wealth. They scream this nonsense even as they freeze wages, scale down benefits, and export the jobs of their employees. And even after taxes, they still have far, far more money left over to play with than do working Americans. Patriot, Founding Father, and President Thomas Jefferson is spinning in his grave...



Jerry Critter said...

The rich are definitely in the minority in this country. Why is it so difficult to tax the shit out of them?

Why do they hold so much control over all the rest of us?

The people who make the laws are or are controlled by the rich...and we vote for them!

Lisa G. said...

I agree that the rich should pay their fair share of taxes at the state and Federal level. The tax breaks they've received from Repub administration is nothing short of obscene.

Tim said...

I've written of this before, back in the early 50s the tax rate was 93%. Seems we look at those years with fondness. House were built, roads were constructed, and almost everyone who wanted to work did. This was a lucrative time for our Country. The tax rate now is around 47%. I think we could raise it a tad.

TRUTH 101 said...

I don't know anyone elsea economic situation around here but mine is middle class. I have no problem at all if my taxes need to be raised so government can pay to do everything we ask of it. Another 10 bucks a week isn't going to make a bit of difference in my life any more than another 100 bucks will make a difference to a guy making 400 grand a year. Or $20 to a guy making twice what I do.

But for some reason so many in our Nation are easily duped by the tea baggers and right wing schills. Government isn't the problem. The lying, greedy bastards who run the republican party and right wing propaganda tanks like Heritage Foundation, along with the weak minded fools who buy into their crap because it's so easy to just say "Yeah. I hate paying taxes to" that are to blame for the state of our Union.

Wish my local paper would have some progressive commentaters. It's a right wing rag.

Jack Jodell said...

I love how you cut to the chase, and I agree. And, as I pointed out in a 6 part series early in 2009 which gave the profession of every member of Congress, very, VERY few have come from "average" middle or lower-middle income occupations. That's why they don't understand the majority of the country and why they are beholden to big money.
Lisa G,
Criminal, too. Lots of it was used to set up offshore factories and jobs.
Obviously, I agree. It seems that the more we cut taxes, the less we get in return.
Well said. You took the words right out of my mouth with that true and brilliant comment!

mud_rake said...

One of the most strange [among many] facts about this 'tax the rich' scenario is the fact that dittoheads without two nickels to rub together will argue that the rich are taxed enough.

Can't get my head around that bit of trivia, but then, in the World of Right-wing Delusion, nothing makes much sense.

Jack Jodell said...

I think the reason for that seeming paradox is that a lot of those people are wannabes who identify with the rich and naively believe they'll become one of them. And, of course, being self-centered to begin with, they want to make damn sure if they do get rich, no nasty taxman is gonna take it away from them.

Jerry Critter said...

I also think that all they hear is "tax increase". They think that means their taxes will go up. Increase the marginal tax rate all you want. More than 95% of the people will never see the increase.

Jack Jodell said...

Good point. The right has been very successful in brainwashing the public into believing that a tax hike for the rich is really a tax hike for all.

We are a nation of big crybabies when it comes to taxation. Our taxes are about half of what is paid in most of Europe, where they take it like adult men and women and realize that taxes provide for the necessities of a modern civilized society (education, roads, mail, health care, unemployment compensation, elderly care, defense, etc.). We just want everything for nothing.

TomCat said...

Jack, you've covered all the bases in this fine article. In addition to raising taxes on your top bracket, you also need to cut way back on welfare for the rich.

Jack Jodell said...

You are exactly right. Our wealthiest elite are the most pampered and biggest crybabies in the world! And they have the balls to disparage those on welfare at the very bottom of the economic scale---somebody needs a castration, and badly! :-)

Tim McGaha said...

My only problem with taxation is that it's much more complex than it needs to be. When it's easier to solve a system of second-order differential equations than it is to figure out your annual tax bill, you know your tax code is hideously broken. I have no problem paying my fair share, and I'd gladly pay a premium for a simpler, more predictable system.

A tax form that could be printed on a postcard sounds about right.

TomCat said...

Every year we spend more on corporate welfare than we do on entitlements.

Jack Jodell said...

That is a very valid point. But, of course, the reason it has gotten so out of hand is due to big money and special interest groups pressuring for loopholes.
That is a didgusting and needless trend that needs reversing in a big way!

John Schroy said...

This article starts with a quote from Thomas Jefferson:

"Taxes should be proportioned to what may be annually spared by the individual."

We should note that Jefferson did not speak of an income tax, but rather of a tax on excess wealth.

The super-rich don't really mind those who cry "soak the rich" because they understand that the target is income, not wealth.

A 50% tax on a person with zero wealth and $300,000 in income, amounts to a tax of 50% of his wealth.

However a 50% tax on someone with $100 million, earning 3% on these assets, represents only 1.5% of his wealth.

Many of the super-rich are liberals precisely because they understand the difference between income and wealth.

Imagine, what would happen if the Democratic Party were to propose abolishing the income tax, but impose a 10% tax on the wealth of all those with more than, say, $50 million dollars in assets.

Surely, in Jefferson's terms, this money could be spared by the super-rich, but the out-cry would be so great that the next day many of the Democratic Party's greatest supporters would become Republicans.

However, there seems to be no chance of the great masses catching on to the difference between income and wealth any time soon.

See: Why are the super-rich often liberals?

Anonymous said...

you guys are fucking idiots.