I'd like to know exactly which Minnesota revenue report John Burns is referring to in his June 9 letter. The top 1 percent is actually those earning over $380,354. I wonder how many of the 1 percent reached that level because they sold a business or farm which makes it a one-time spike.
Perhaps the 13.9 percent tax rate he stated for a household earning $32,000 is correct, but that does not mean that the $32,000 household actually pays 13.9 percent of their income in Minnesota taxes. The tax rate does not reflect the tax credits that household receives.
Here is an example for a single parent with two children earning $32,000: First, the parent would not pay any federal income tax and would receive enough money in refundable federal tax credits to more than pay for the 7.65 percent Social Security and Medicare taxes.
Second, this parent would not pay any Minnesota income tax and would actually get a tax refund, again because of tax credits. Third, this parent would receive enough in federal and state refunds generated by all of the tax credits to pay for the Minnesota sales tax as estimated by the IRS.
Fourth, if this parent paid $1,200 in real estate taxes, he/she would receive approximately 40 percent of that tax back under the property tax refund program. So I guess that only leaves this parent paying $720 in state and local taxes. The only other taxes this parent would pay would be gasoline tax and perhaps vehicle registration, cigarette or liquor tax.
If the children are in school (K-12), this parent would receive 75 percent of the cost of school supplies, band instruments, music and dance lessons and any other eligible expenses from Minnesota education credits. If the children are in a Minnesota public college they would be able to have most -- if not all -- of their college tuition paid through grants.
Mr. Burns wants people to pay their "fair share". What is the definition of "fair share"? Maybe fair share is total cost divided by number of residents, or total cost apportioned by services received.