Craig Westover: Taxing the rich would cost us all

  • Article by: CRAIG WESTOVER
  • Updated: August 25, 2010 - 7:26 PM

Targeted tax hikes would miss their mark and do collateral damage.

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swmnguyAug. 25, 10 7:21 PM

How come when we taxed the wealthy at vastly higher rates than we have for the past decade or two, our fiscal situation was much, much better? Why was our public infrastructure better? Why were schools better?

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swmnguyAug. 25, 10 7:22 PM

Mr. Westover makes the popular new argument against restoring taxes to the historic levels we had when our economy was growing and we developed a strong middle class. The general argument that the rich can avoid taxation by various means, therefore they shouldn't be taxed; and to then argue against morality in public policy is a very weird argument for a Republican to make in public.

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Mark27Aug. 25, 10 7:29 PM

I think most people recognize there will be a downside to having higher taxes on the rich than other states in the country. The author's case strikes me as exaggerated, but nonetheless noteworthy insofar as all actions have consequences. But the bottom line is this...Minnesota has a monstrous $6 billion deficit that an economically questionable balanced budget mandate is gonna force us to erase in one giant gulp in the middle of the worst economy since the Depression. Suggesting that upper-income Minnesotans shouldn't have a disproportionate role in stepping up to the plate and helping with this crisis is madness. A more comprehensive approach to the situation than what Dayton is proposing is needed, but given how fragile the livelihoods of the struggling masses are right now, we need a budget-balancing approach that will cause the least harm to the fewest amount of people....and an income tax increase on the wealthy is the best way to accomplish that. For a generation now, we've kept the wealthiest Minnesotans and Americans completely off the table from any sacrifice at a time when Joe Sixpack is being ripped apart limb by limb. Something's gotta give, Craig, and it can't ALWAYS be the working person who falls on the sword.

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progrowthAug. 25, 10 7:44 PM

”The evidence presented in this paper supports the basic theoretical presumption that state and local governments cannot redistribute income. Since individuals can avoid unfavorable taxes by migrating to jurisdictions that offer more favorable tax conditions, a relatively unfavorable tax will cause gross wages to adjust until the resulting net wage is equal to that available elsewhere. The current empirical findings go beyond confirming this long-run tendency and show that gross wages adjust rapidly to the changing tax environment. Thus, states cannot redistribute income for a period of even a few years. The adjustment of gross wages to tax rates implies that a more progressive tax system raises the cost to firms of hiring more highly skilled employees and reduces the cost of lower skilled labor. A more progressive tax thus induces firms to hire fewer high skilled employees and to hire more low skilled employees. Since state taxes cannot alter net wages, there can be no trade-off at the state level between distribution goals and economic efficiency. Shifts in state tax progressivity, by altering the structure of employment in the state and distorting the mix of labor inputs used by firms in the state, create deadweight efficiency losses without achieving any net redistribution.” Martin Feldstein and Marian Vaillant Wrobel Journal of Public Economics Volume 68, Issue 3, 1 June 1998, Pages 369-396 http://dx.doi.org/10.1016/S0047-2727(98)00015-2

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klotzmAug. 25, 10 7:58 PM

history shows that they WILL spend more. Get it through your head...WE CAN'T TAX OURSELVES TO PROSPERITY.

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barefootpaulAug. 25, 10 8:07 PM

...you must also believe there's no smart, successful people in Sweden. I don't recall hearing about any mass migrations to Mississippi even though there are tax advantages in it. Maybe there's other reasons for choosing where you reside?

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joeeeeeeAug. 25, 10 8:11 PM

how much money are talking about here. Some guy makes 500k in a year; how much more money would he owe in Minnesota state income tax under Dayton's plan?

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barefootpaulAug. 25, 10 8:12 PM

Your argument is true for those of lower incomes who actually spend the earnings they keep. Not so much for higher incomes. How does this argue against a more progressive tax structure?

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kmsheggAug. 25, 10 8:23 PM

In order for Swedes to manage with what is left after the government appropriates the majority of their income, they live with many fewer goods and services. This is not necessarily a bad thing, but for Americans to switch from their form of extreme consumerism to live within their new means will require a huge shift in attitude and spending habits.

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b127oaktreeAug. 25, 10 8:36 PM

We can be California, Governor Dayton, Yes we Can ! With Governor Dayton, We can be Michigan, Yes We can !!!!!

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