Via Minnesota Politics the news that the governor and the House Republican leadership want to cut the renters' tax credit.
Since I'm not likely to get the renter's tax credit this tax year anyway I want to believe that my opinion is not affected too much by the fond memories of the $300-500 checks that conveniently arrived just before the State Fair.
I've seen this kind of chicanery before about when paying more in tax is not actually a "tax increase," when the difference between user fees and taxes becomes emotionally heated, and when broadening the definition of taxable income or narrowing the definition of exempt income is not a tax increase even though some people pay more taxes after the change.
The 1990-1993 National Government in New Zealand had a peculiar fervor against raising taxes, but they introduced many new fees for previously free [at consumption] government services, reduced or eliminated many excemptions, and brought more income within the definition of taxable income. All the while saying that they had not raised taxes, which they defined narrowly as not raising the personal or corporate income tax rates, or the Goods and Services Tax (a value added tax) rate.
No-one likes paying more taxes. But when governments become fixated on not altering tax rates despite a persistent gap between government revenues and government expenditure this kind of inefficient fiddling at the margins is the result.
The level of taxes we have now is not perfect, it's the end result of bargains and legislative deals over several years. If in fact the people of Minnesota want state government to provide services provided or financed by local governments or private companies in other places then maybe our state taxes will be a little higher. Maybe in a few years if there's another boom they will be a little lower.
Taxation rates are a means to the end of having publicly provided services. There's nothing particularly special about whether they're 9.5% of total state income or 10.5%. The real question which is "what services do want the state government to finance/provide?" gets squeezed out by the reductive focus on keeping tax rates just as they were in 2002.
Posted by robe0419 at May 2, 2005 9:01 PM