Viewpoint: Cutting spending would end need to 'raise revenues'
If Rep. Julie Bunn (DFL-56A) can't look us in the eye and tell us she may raise our taxes, she probably shouldn't be raising them.
Just weeks ago, I received a survey request from Rep. Bunn seeking input on whether the Minnesota State Legislature -- in facing a $5 billion budget deficit and a constitutional need to balance the budget -- should "raise revenues" or "cut programs" (or do both).
I was initially puzzled. Does Rep. Bunn, an economics professor, believe that "raising revenues" is something different than raising taxes? Or was Rep. Bunn simply hoping her constituency isn't bright enough to appreciate the difference?
Rep. Bunn's April 8, 2009 article in the Woodbury Bulletin, "Senate and the House propose tax reforms," solves the mystery.
Rather than inform residents of House District 56A that she and her fellow DFL legislators are indeed considering income tax increases (something that won't sit well with voters in light of rising unemployment, increased property taxes and reduced family income),
Rep. Bunn tells us that "tax reform" could provide a new option for lawmakers to "find more revenue." If only the rest of us could "find more income" that easy.
As expected, the DFL-sponsored "tax reform" legislation targets only those who earn more (can't we all assume such people did nothing to warrant earning more?).
While the first tax reform proposal purports to "balanc[e] the burden for the personal income tax more fairly" and would extend "sales tax to clothing, legal and accounting services," the second proposal intends to increase the "progressivity of the Minnesota tax system."
These two proposals share Rep. Bunn's position that "higher income households pay a significantly lower percentage of income on taxes than lower and middle-income households."
As Rep. Bunn hopefully recognizes, higher, middle and lower income households pay the same amount of taxes (dollar for dollar) for income within the same income tax brackets (I know from experience -- having paid taxes as a high, middle and low income earner over the course my lifetime).
Of course, higher income households also pay taxes on income not earned by lower and middle class households (and at even higher tax rates).
Although higher income households will inherently have more income "left over" after paying taxes (apparently a "wrong" that Rep. Bunn believes must be corrected), it's because they earned more -- not because they didn't pay their "fair share" of taxes.
In fact, higher income households pay more taxes than all other households.
Again, in the interest of full disclosure, Rep. Bunn (and the DFL legislators who sponsored the legislation) should come clean.
These tax proposals are yet another misguided attempt to redistribute wealth.
Class envy and higher taxes, however, are not the solution to the current economic downturn. Time and time again, tax increases have been proven to stifle economic growth.
Why would a small business owner, facing the prospect of higher income taxes, add (much less retain) employees, give raises, or provide benefits?
Thankfully, Rep. Bunn also reports that the "state of the economy is compelling lawmakers to [also] take stock" of their "spending habits." It's high time they do so.
They might find that cutting spending (Minnesota has spent more per capita than the national average for state and local governments for decades) would eliminate the need to raise revenues -- er, I mean, the need to raise taxes.
Brian L. Williams is a resident of West Lakeland Township.