Bob Gustafson of the MMM caucus throws out a question:
>As a Middler, I like the part of Dave's thinking that
>talks about more local accountability, deciding
>ourselves how much we should tax ourselves. I was
>confused by the contradiction however when Dave then
>tried to suggest a more "painless" way of keeping NRP,
>his "Let's tax business for a greater portion". The
>question raised is why do we always have to find
>someone else to pay for what we want? Let's stick with
>being accountable on NRP.
As the so-far-only member of the Open-Minded, Self-Doubting Liberal (OMSDL)
caucus, I am often asked to re-inventory my own thinking. I'll try to come
up with an internally consistent answer that doesn't evaporate on contact.
I think local accountability is a positive value - usually. But an important
qualifier is that it is only one of many positive values, and far from
supreme.
Bob put the word "painless" in quotes, but I didn't. In advocating against a
referendum and for a tax hike, I'd prefer to argue on the basis of fairness,
another positive value. Now, as an OMSDL, I say fairness has many possible
definitions. Bob and I might agree it is more subjective than ideologues
often allow.
In my world, progressive taxation is fairer than flat or regressive
taxation - usually. In my world, the wealthier should pay a higher share of
their incomes to support public sector investment, because they have the
increased ability to pay.
The legislature has left Minneapolis more to its own devices to find revenue
to match our spending (local accountability). However, the legislature does
not allow us to set the progressivity of our chief revenue generating
tool -- property tax rates (lack of local control). Furthermore, they have
restricted local referendums to an even less progressive structure.
Referendums are now essentially a flat tax based on market value - which is
often really regressive in my view because it is a wealth tax with little
regard to the income of the property owner.
So, when I recommend against a referendum, I am recommending for more
progressive revenue-raising. I do believe businesses should pay at a higher
rate, since the big commercial-industrial payers are corporations.
Corporations exist only as a creature of government (which by law allows
executives and shareholders to shuck personal liability) As a society, we
did this to help job creation and risk-taking. But I believe we need to take
something more - and making them pay a larger share of the local tax burden
is one way to do that.
A few minor points. There is local accountability in this because if we bust
our corporation's chops too much, they can leave and go to St. Paul or Eden
Prairie. Minneapolis suffers, directly. Also, I don't want to argue that
commercial-property taxes are perfectly fair for all payers. Just like
residential property taxes, they don't take into account ability to pay
(corporate profits). But I do believe residents suffer more by property tax
unfairness than businesses and corporations. Sue me; I'm a Democrat.
Also, unfair taxation can certainly harm job creation and other societal
goods. However, Minneapolis has been doing pretty well in the business
department, so I think this sort of "economic correctness" is often oversold
and under-values the profits and job creation that comes from stable,
enriched public sector investments.
Bob also mentions that taxing customers and visitors, as business taxes do,
violates the principle of local control - or is insufficiently locally
painful (Bob, you masochist!). Not entirely, because if we tax those groups
too high, they leave or don't come and we're hurt. But beyond that, there's
a decent fairness argument for taxing outsiders who use our resources
(lakes, roads, rights-of-way) and really don't pay. Also, taxing business
customers (indirectly by taxes raising prices) only pays us back for use of
the city's infrastructure and educated workforce, and other municipally
enhanced goods. By kicking more into NRP, they help make a safer, more
attractive, more stable city in which they can prosper, especially by
preserving the value of a major asset (property). It's a judgment call
what's fair, but there's my spiel.
Clear as mud, right?
David Brauer
King Field - Ward 10
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