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Minnesota 2020 Journal: Good Talking Point, Poor Policy

August 02, 2013 By John R. Van Hecke, Executive Director & Fellow

Despite data affirming Governor Dayton’s public policy directional course change, conservative public policymakers remain utterly convinced that tax increases and government spending are bad. Their conviction flows from ideology, not facts, so their certainty is unimpeded by experience. That might be a good short-term communications strategy but it's poor public policy.

Earlier this week, Minnesota’s Department of Revenue released projections predicting that Minnesota’s property tax burden is easing. Minnesota property owners are paying fewer regressive property taxes as the State of Minnesota’s increased revenue sharing policy lightens community service funding burdens. Counties and communities, experiencing increased state revenues, are expected to decrease local reliance on property taxes to fund community services.

Conservative policymakers diligently labor to convince us that the 99%’s economic interest is the same as the 1%’s interest. The data don’t support this. Minnesota’s median household income is $58,000 but that figure varies considerably across the state. Minnesota’s highest median household income by county is $79,000 in Washington County while Mahnomen County, ranked last, is $38,000 annually. Conservative fiscal policy asks us to functionally assume that we all live in Washington County, behaving as if our median household income is $79,000, even when almost every Minnesotan lives in one of the other 86 counties.

Consider income distribution. Median household income is determined by ranking every Minnesotan’s household income, highest to lowest, and then finding the midpoint. That’s the median. In other words, half of Minnesota’s households earn more than $58,000 annually and half earn less. The problem comes in determining that household income’s larger familial and community impact.

Forty-three percent of Minnesotans households earn less than $50,000 annually. That’s 900,000 households out of a state-wide total of 2.1 million. A little over four percent of Minnesota households—89,000—have an income surpassing $200,000. Stated differently, 96% of Minnesota households earn less than $200,000 annually. That’s 2 million out of 2.1 million households earning less than the top four percent of all income earners. Confronting this data, it’s hard to understand how conservative policy advocates have convinced any Minnesotans to align their policy interests with those of the top four percent. Yet, conservative policymakers continue insisting that doing more for very high income earners aids middle and low-income Minnesotans.

Responding to Governor Dayton’s declining property tax projections announcement, State Senator David Hann (R-Eden Prairie), insisted that increased state revenue sharing will only result in increased local government spending. Quoted in local media, Hann said, “Based on history, when you give local governments additional resources, they spend it.”

Hann and other conservative leaders could’ve said that they preferred a regressive, property tax-based public revenue system because it eases the overall tax burden on high income earners. They could’ve said that they liked creating additional barriers to overcoming poverty and wage stagnation’s deleterious consequences. They could’ve said that Pawlenty-era taxation structures should’ve been preserved because they effectively asked more of low and middle-income earners while delivering fewer public services.

Instead, Hann attacked the Revenue Department’s projections as more wasteful government. Hann and his colleagues did not offer data analysis supporting their contention. Therein lays the conservative strategy. Insisting that something is true does not make it true; repeating an assertion just makes it familiar even if the familiar does more harm than good.

Until the mid-19th century, Americans, like Europeans, did not regularly bathe. The practice changed as growing bodies of scientific research data, examining problematic public health concerns, began connecting unhygienic practices with disease. Washing reduced the likelihood of disease transmission. Convincing people to bathe regularly, even daily, while also frequently washing hands would, researchers argued, dramatically increase good health.

On the surface, it seems simple enough except that people associated bathing with disease transmission, not prevention. Hippocratic medicine postulated that ill health flowed from unbalanced humors. Bathing increased risk of humor imbalance. Teaching people to understand modern disease pathology and to behave accordingly took generations.

Growing literacy rates accelerated public health practice changes. A new, instructive literature appeared, aimed at consumers. One example is an 1861 pamphlet, “Baths and How to Take Them.” The educational effort highlights the challenge of overcoming deeply-held hygienic practices. Despite an astounding body of research data, daily bathing wouldn’t be fully embraced in America for another hundred years.

When I hear conservative public policy leaders dismiss public tax revenue data out of hand, I appreciate the power of repeated, unchecked assertion. Conservative messaging continues with remarkably little resistance. It serves the needs of the wealthy few, over the needs of the many. But, increased state revenue sharing will allow local governments to decrease dependency on regressive property taxes. Fiscal data, like truth, will out.

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  • Dale says:

    August 2, 2013 at 9:30 am

    I would love to see REAL “Truth-In-Taxation”  As in the level of government that mandates a program must fully fund that program at the mandated level.  Too many programs are mandated by one level of government but must be carried out, without full funding by a lower level of government.  If the Federal and State governments would fully fund ALL programs that they have mandated, property taxes would probably go down even further.

  • Richard Coad says:

    August 12, 2013 at 11:24 pm

    Building blocks 101: Distribution of decent jobs for decent lives and decent living; taxation versus wise investment, Ben Franklin’s gifts to Philadelphia and to Boston make a fine example. Mal-distribution of wealth, while true, is not a problem. Rather than make huge lump sum winners,much of whose winnings are taxed heavily, immediately, rhymes with overtaxed. Rather,invest such gambling “rewards” wisely,remembering Franklin,in place of what “some wealth” refuses to do for how many elections in a row now. Rhymes with Greenspan and Rove and their bidness partners. Oh my, we live in a time predicted by Tom Peters and his dictum: hierarchs rise to their level of incompetence and plateau out, rising no further. Well, when you’re on top there’s nowhere else to go. Rather like the old saying, “Just as surely as cream rises, .... floats.
    Money: If “some of us,” insist that we ship our jobs overseas and across borders far and near, what’s not to understand. We should have sent the bills overseas immediately.Of course credit card companies thought spending could be revived by running up personal debts just like the housing “boom,” rhymed with “bomb” didn’t it. Using Enron as an example, we should have fired immediately from the top down keeping all those who knew how to run the business and run it well. Well, they’re the ones who would have fixed what was wrong and improved what was right, as good Americans have so often done in the past. There would have been no confusion that, somehow, European Colonialism was different from American Capitalism. In particular among Presidential candidates.
    To wrap up for now: Royalty. There are two kinds; Natural and the self-anointed, self appointed who seem to comprise the “who.” misplaced usually at the front end of the reporter’s mantra: Who, what, where, when, how and why.The first seems to drag anchor like Poe’s Mariner; those midst will seldom finish first in a turtle race, only the last, Why has both legs and will hunt.Unfortunately the rest will drag a leg, held back by the requirements of exhaustive, inclusive and compelling. Those who would be the first must meet all three; exceptions, none. Example: Diana versus the Queen of England. When the dust settled the people, and not just those from England, voted with both their feet and flowers.