When we ponder the machinations in St. Paul, it's good to remember what Mencken said:
Democracy is the theory that the common people know what they want, and deserve to get it good and hard.
Back in November, the good people of Minnesota accepted the notion that DFL governance would lead to, as we've heard, a "better Minnesota." So yesterday we got a look at how it's gonna be now that we have a Better Minnesota. And it won't be cheap:
[Governor] Dayton, who campaigned in 2010 calling for the state to "tax the rich," would create a new tax rate of 9.85 percent, to be paid on taxable income above $250,000 for joint filers and above $150,000 for single filers. That would net about $1 billion from 53,000 returns and give the state one of the top five top rates in the country.
For the first time, Minnesotans would pay sales tax on clothing -- items above $100 -- and on services like haircuts, auto repairs and legal fees.
Cheap? No. Good and hard? Mais oui. And if you're lucky enough to live in the metro area, there's more, because we hafta pay for the choo-choos:
The seven-county metro area would pay an extra 0.25 percent sales tax for improved transit -- a measure local business groups have supported. He also would increase spending on economic development by $86 million.
Presumably, the "local business groups" aren't located along University Avenue.
There's a boatload of tinkering involved in this proposal, which raises taxes in some places and supposedly lowers them in others. The big savings, supposedly, is in property taxes, where a $500 rebate is in the offing. Notice, however, that it's a rebate, not a permanent reduction in the rates. Rebates can be taken away at any time. And don't be surprised when the solons say, oh, darn the luck, we have a budget deficit, so we'll need to suspend that rebate.
Not surprisingly, the Republicans in St. Paul pointed out that the increased taxes are going to get passed on:
"I don't know how you can say you're going to collect $2 billion more in sales tax and not have the people of the state pay that," said Senate Minority Leader David Hann, R-Eden Prairie. "If you go out and get an oil change on your car, you're going to pay a sales tax on it. If you go out and get a haircut, you're going to pay a sales tax. If you join a health club. Those are things you are not paying sales tax on now."
All true. And there's this important point:
“We are going to raise two billion dollars in sales taxes but nobody’s going to pay them?” he asked. “How does that work? So the businesses are going to be absorbing these taxes and what is going to happen? It’s not going to pass them to ordinary people and consumers? So, of course, people are going to pay.”
Yep. Enjoy your Better Minnesota, people.
Cross-posted and comments welcome at Mr. Dilettante's Neighborhood.