(The tax incidence study, selected information displayed)
Based on this table from Minnesota tax incidence study using the 2011 estimated numbers (no 2008 numbers available), we can calculate the increased tax income, if the richest 10% paid the same overall tax rate as the poorest 10%,
Subtract the tenth decile (10.1%) from the first decile (22.1%) for 12% or .012 as a multiplying number. Oops, that is .12 not 012, other numbers fixed.
Note the tenth decile makes 79,700,616 in thousands of dollars which rounds to 80 billion.
Multiply .12 by 80 billion to get 9.6 billion in additional taxes in one year.
Minnesota is facing a projected budget deficit of more than $4.8 billion over the next two and a half years. To get to that comparison, we need to multiply .96 a year by 2.5 years which gives a comparison amount of 24 billion.
So if the richest ten percent paid the same overall tax rate as the poorest ten percent, then five times (24 of 4.8 billion) the budget deficit would be covered, so we could even balance the budget will a lesser increase, to decrease sticker shock!
So what if we had the richest ten percent just pay what the average Minnesota pays, 11.4%.
(.114 -.101)tax rate difference X 80 billion $ a year X 2.5 years in this budget = 2.6 billion
So if the richest ten percent paid the same overall tax rate as all of the rest of us, then half (2.6 of 4.8 billion) of the budget deficit would be covered. And taxing the rich for even half the budget deficit seems very consistent with Star Tribune poll results!
So then why isn't Republican Governor Pawlenty doing this popular move? Could it be because Pawlenty is looking to please the national GOP for a presidential nomination?
Wait, wait, not only has Republican Pawlenty opposed having the richest pay the same overall Minnesota rate as the poorest, but under Governor Pawlenty the rich pay even less while the poor pay even more.
( From the Minnesota 2009 tax incidence study with Pink Pawlenty years' highlights added and yellow highlights for comparisons added)
As you can see from this Minnesota study, that overall tax rate for the poorest ten percent of the population increased from 18.2% to 22.1%, while overall tax rate for the richest ten percent of the population decreased from 9.0% to 8.8%, during Pawlenty's administration. And for the average Minnesotan the overall tax rate increased from 11.3% to 11.4%. That is why Pawlenty is nicknamed Pawlenty Robbing Hood, for taking more taxes from the poor, while giving more tax breaks to the rich.
(Kudos to Brian Falldin for the picture)
Steal from the Poor, Give to the Rich
Now, you know that Republicans will complain about redistribution of wealth if we tax the richest the same as the poorest in Minnesota taxes. However, it has been the Republicans all along who have been redistributing the wealth by making the rich, even more richer!
The top 1% richest improved in wealth by 256% percent over the past 25 years.
So the DFL budget solution of budget cuts combined with "tax the rich" fourth tier income taxes is popular, workable, fair and fiscally responsible. |
