Minnesotans who make more than $1 million a year already are projected to pay $1.081 billion in state income tax for the 2011 tax year.The Minnesota rich are not unanimous in wanting to pay more taxes.
Some of the state's top earners said in interviews this week that the "tax the rich" plan rings hollow to them. Few would comment about the potential hit to their own paychecks and lifestyles. Most insisted that their chief concern is the broader impact on the state economy.Something tells me the reporters writing this story don't have a Rolodex of "rich" people's names to call asking about increasing taxes, so one really has no idea how many "rich" folks agree that they want to pay more taxes, but except for Bill Gates and Warren Buffett who both have said they would be willing to pay more, I doubt most "rich" folks want to pay more. But I could be wrong.
Raising taxes on the "rich," I assume, is for the most part raising taxes on small and medium size businesses. These businesses would likely curtail profit sharing for their employees. Increasing taxes on businesses would probably discourage new businesses from re-locating to Minnesota, and create higher unemployment. This is not rocket science.
The governor's plan would raise Minnesota's tax rate to twice that of Illinois. Twice. Double.
Currently, only seven states have a higher top income tax bracket than Minnesota.So, for all the pain and all the downside in raising taxes, it still doesn't get the state very far along in meeting the budget gap and its unintended consequences would probably exacerbate budget problems down the road.
Back of the envelope calculations: $5 billion gap/5 million people = $1,000/Minnesotan. $1,000 divided by 50 weeks is $20/person/week.
Oh, and this just in: Minnesota's credit rating was just lowered.
The $700 million might be needed just to pay the increased interest rates that will now be levied on Minnesota as their credit rating tanks. I assume the gap of $5 billion is borrowed money. Back of the envelope calculations: $700 million / $5 billion --> 14%.