Today's Democratic Party default is always higher taxes

The Minnesota Prelude - Land of 10,000 tax increases

Excerpt:

Earlier this week Democrats who control both legislative houses passed a three-year $1 billion income tax increase. This would raise the top tax rate to 9.1% from 7.85%, taking the rate even higher than that in New Jersey and New York (outside of Manhattan).

Yesterday Mr. Pawlenty vetoed this tax foolishness, as he has three previous tax hikes as Governor. The tax increase was targeted at the rich, but it applied to individuals with an income of $113,100 for singles and $200,000 for joint filers. Note how the definition of "rich" keeps becoming more expansive.

An analysis by the state department of revenue found that nearly six in 10 filers hit by the higher rates would be farmers or small business owners—i.e., the people who write paychecks. The higher rates would go away in 2013 if the state has a $500 million surplus, though the spenders would make sure that day never arrived.

This budget brawl was precipitated by a 4-3 Minnesota Supreme Court decision to invalidate $2.7 billion in emergency budget cuts, technically called "un-allotments." Mr. Pawlenty made those line-item cuts earlier this year to close a $3 billion budget deficit. One reason for the budget gap is that Democrats in St. Paul, much like Democrats in Washington, D.C., approved nearly $1 billion in new health-care entitlements. The practical solution here would be for the legislature to approve the Governor's cuts, which won't put the fragile economy at risk.

This Minnesota drama is typical of the fiscal battle taking place in at least a dozen state capitals, and soon to occur in Washington. Today's Democratic Party default is always higher taxes. Dominated by government-employee unions, they refuse to rethink government spending despite the steep recession. Last year six states raised income tax rates, and this year another five are attempting to do so.

That didn't work so well in 2008 or 2009 in Hawaii, Maryland, New Jersey or Wisconsin—states that still have budget holes even after trying to soak the rich. Maryland lost revenue from millionaire tax filers after it raised rates.

Mr. Pawlenty's veto sets the stage for an extended budget showdown that should help him politically. Higher tax rates don't produce prosperity or balanced budgets—as we can see in New Jersey and New York, or Greece and Portugal.

Comment: I really appreciate how Pawlenty has held the line against tax increases!