Wednesday, September 22, 2010

Appraisal of Mark Dayton's tax plan

Communist   DFL candidate for governor Mark Dayton has released his tax plans, and, well, it looks like a great way to reduce revenues in the long term.  A quick summary of some highlights lowlights:

1.  Increase state income tax by 3.1% (to 10.95% from 7.85%) on incomes greater than $130k (individuals) and $150K (married).  Note first a significant marriage penalty in a day when everything from educational attainment to being law abiding corresponds to having married parents, and furthermore it gives the prosperous (as opposed to the rich like Mark Dayton) a significant reason to leave the state.

2.  Add a property tax surcharge of 2% on homes with a value above $1 million.  OK, so for the rich, Dayton creates a reason to....again...leave the state.  Transaction costs on leaving the state for a lower tax state (say far off South Dakota) are paid for year.

3.  Casino near the Zoo  Mall of America.  First of all, the governmental costs of dealing with problem gambling often override the revenues--incarceration, divorce, etc., among problem gamblers.  So it's not guaranteed revenue to begin with.  Second, the state has given an exclusive license for casinos to our Indian tribes.  So what Dayton proposes to do is to simultaneously increase the misery of gambling families and native americans.

More or less, what Mr. Dayton proposes is a fairly systematic way to drive prosperous and wealthy entrepeneurs out of the state, leaving more room for trust funders like Dayton.  While this may make it easier for him to attend society events due to less traffic, it's not a good deal for those of us who need to work for a living.

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