Paying Your Fair Share!
To: The Honorable Tim Walz
Office of Governor
130 State Capitol
75 Rev Dr. Martin Luther King Jr. Blvd.
St. Paul, Minnesota 55155
Dear Gov. Walz:
It is that time of year when we citizens should be in contact with our governmental leaders. It is also that time of year when we hear there are Minnesotans among us who are not “paying their fair share.” We know who they are. According to the Department of Revenue, 24,000 of these skinflints currently live in Minnesota. When we first heard about these people, we presumed a dire budgetary deficit must be threatening high-priority programs. And in fact, the gap between the projected budget and revenue receipts was reported to be $17.5 billion.
But wait a minute! That is a $17.5 billion surplus, not a deficit.
A $17.5 billion surplus must mean that someone is paying their fair share. Who determines what someone else’s fair share is? Do we have a yet-undisclosed governmental department that calculates “fair share,” and if so, how is it measured? Whenever a governmental person bemoans someone not paying their “fair share,” it is usually quickly followed by a plan to increase taxes on that undeserving group. Years ago, Sen. Russell Long, the late chairman of the U.S. Senate Committee on Finance, summarized this approach as “Don’t tax me; don’t tax thee; tax the fellow behind the tree.” In Minnesota we seem to have a veritable forest of tax opportunities.
We already tax that fellow behind the tree. Minnesota’s tax regime is one of the six most progressive in the country. Progressive, by the way, means higher taxes are paid in proportion to one’s higher income. Analysis of the total impact of all Minnesota taxes by the Institute on Taxation and Economic Policy confirms the steeply progressive nature of the Minnesota tax regime. Perhaps this is why Minnesota currently has the highest budget surplus in its history, and on a per capita basis, one of the highest in the entire country.
The unfortunate subtext of the refrain of “not paying your fair share”: It’s unfair that some have more income, undoubtedly achieved by shady practices. It’s unfortunate we can’t put a tax on envy.
Let us be very clear about this matter. This is not the usual screed about all taxes being bad. Most of us in Minnesota—those of us who voluntarily remain in this state and who have just recently sent in large checks to the Minnesota Department of Revenue—fully understand and support robust government policies to increase the quality of life that we all enjoy in this state.
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Anyone who serves on the audit committee of a publicly traded company or works for a public auditing firm knows the importance of “tone at the top.” That is why we are urging you as governor to adopt a different “tone at the top.” If there are important governmental programs that require additional revenue, they should be identified and justified on the program’s merits. Paying for these programs should not adopt the rhetoric of envy or revenge aimed at a small, identifiable percentage of our citizenry—particularly when that segment of our tax-paying population pays more per capita than any other segment of our population.
It has become easier for people to move from one state to another. States are frequently in competition with each other. Given our weather—and potholes(!), Zoom technology, and the fact that residents of high-tax states can no longer deduct more than $10,000 from their federal income tax—we should be very mindful about keeping Minnesotans in Minnesota. People like to feel appreciated.
Let’s get back to those 24,000 people earlier vilified as “tightwads” who are not “paying their fair share.” We want them to continue to stay here and pay those taxes. Tone at the top helps. And for that reason, we think that the governor should send a note of thanks to those 24,000 people so that they at least receive their fair share of gratitude.
Vance K. Opperman
Thankful for those who stay