Minn. lawmakers rejects Dayton income tax plan

Published 6:46 am Friday, March 4, 2011

ST. PAUL, Minn.  — Gov. Mark Dayton’s plan to raise income taxes on the state’s top earners caused an outbreak of political scuffling at the Capitol Thursday, with Republicans bringing the plan to House and Senate votes that the Democratic governor blasted as political game-playing.

The income tax increase, which would bring in an estimated $2.4 billion and which Dayton has proposed to help eliminate a $5 billion state budget shortfall, failed unanimously in the House of Representatives and mustered only a single vote in the Senate. Republicans voted no because they say income tax increases would damage job growth and the state’s economy; Democrats voted no at the urging of Dayton himself, who said his proposal is not finalized and deserves public testimony and committee debate.

Republicans said they wanted floor debates on Dayton’s plan because the legislative session is passing quickly and that it was important to debate a plan that would create a fourth income tax bracket on top earners. Republicans control both legislative chambers, making approval of Dayton’s proposal very unlikely.

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Dayton, who campaigned on raising income taxes on the wealthy, has proposed eliminating an estimated $2.4 billion of the budget shortfall by increasing taxes from the current 7.85 percent to 10.95 percent for single filers who make above $85,000 and couples who make more than $150,000.

Republicans have not yet proposed their own plan to eliminate the projected $5 billion gap between state revenue and spending obligations, which Democrats charged made their criticism of Dayton’s plan hypocritical. But the party united in opposition to Dayton’s favored approach, arguing it would be terrible for Minnesota businesses.