You are here

Wall Street Journal

A political lesson in the Upper Midwest.


Wisconsin and Minnesota are often lumped together as similar states, but this year they are showing how elections matter. In November the Badger State elected a GOP legislature and Republican Scott Walker, who is trying to cut spending and taxes, while Minnesota voters narrowly chose liberal Democrat Mark Dayton, who is doing the opposite.

And then some. To close Minnesota's budget deficit, Mr. Dayton first proposed to raise the state's top income tax rate to 13.95% from 7.85%. That would have given Minnesota the distinction of having the highest state income tax in the nation, racing ahead of current leaders Oregon and Hawaii at 11%. The Dayton plan would even have topped New York City's combined state-city rate of 12.62%.

Mr. Dayton, who inherited his wealth from a department-store empire, saw his proposal routed in the state legislature. But he still wants to raise the top rate to 10.95%.

He defends this tax wallop by arguing it is about "restoring tax fairness" in Minnesota. Fairness? According to the state's own tax data, the richest 10% of Minnesota families already provide 54% of the state's income tax revenue. The bottom 10% make money off the income tax as they get cash-back tax credits.

We won't repeat our lecture about high state taxes driving citizens to move to lower tax climes. Our point today is about political choices. In Wisconsin, government unions are fighting furiously against Mr. Walker's cuts in state employee benefits. Their alternative? Raise taxes the way Mr. Dayton wants to do. In recent years, this has become the default union policy and thus the first priority nearly anywhere that Democrats get power.

New Democratic Governor Dan Malloy is trying to raise income, sales, liquor, cigarette and other taxes in Connecticut. In California, Democrat Jerry Brown wants a $12 billion extension of income and sales tax hikes that were supposed to be "temporary." New York Governor Andrew Cuomo is trying to hold the line against a tax increase, despite pressure from fellow Democrats who dominate the state assembly, but he's a rare exception. We can't remember when the fiscal policy gulf between the two parties was as great as it is today.