PoliGraph: Rybak is right on taxes

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Before former Gov. Tim Pawlenty arrived in Boston, Mass., a few weeks ago to speak at a tea party rally, Minneapolis Mayor R.T. Rybak gave his take on the former governor’s record.

“The facts are this: Under Tim Pawlenty, the average tax rates went up for the bottom 90 percent… of Minnesotans. The richest 10 percent had their average taxes go down,” Rybak said during an April 14, 2010, conference call with Boston reporters. “So if the Tea Party wants to represent the top 10 percent of the country and raise 90 percent of the people’s taxes, they’ll love Tim Pawlenty.”

There’s truth to Rybak’s claim, but he leaves out an important detail.

The Evidence

Rybak is talking about the effective tax rate, which is the ratio of taxes to income.

Generally speaking, he’s correct. Between 2002, the year before Pawlenty took office, and 2008, the wealthiest Minnesotans – the top 10 percent – saw their effective state and local sales tax rate decline slightly. Meanwhile, lower earners generally saw their rates increase slightly.

And Pawlenty’s policies played a role in that shift. For example, he supported cuts to Local Government Aid, which prompted some local governments to raise property taxes for many Minnesotans. That increase largely hit middle-and-lower income earners, according to the Minnesota Department of Revenue. A new cigarette fee backed by Pawlenty also changed effective tax rates.

But something else happened during Pawlenty’s time in office: The richest Minnesotans got richer, in part due to unusually high capital gains income. So, while taxes may have increased for everyone in the state, in terms of percent of income, those changes were less dramatic for the state’s wealthiest.

The Verdict

Rybak is correct that effective tax rates went up a bit for lower earners, and down slightly for higher earners. These changes have to do with how much money Minnesota’s wealthiest made during Pawlenty’s tenure, but they were also affected by changes in tax policy.

Though Rybak didn’t provide all the details in his conference call, his claim is close enough to be accurate.

SOURCES

Minnesota Department of Revenue, 2011 Tax Incidence Study, March 2011

Interview, John Stiles, spokesman, R.T. Rybak, April 28, 2011

Interview, Aaron Twait, Research Director, Minnesota Taxpayers Association, April 28, 2011

Interview, Paul Wilson, Director of Tax Research, Minnesota Department of Revenue, April 29, 2011

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The Humphrey School

  • http://residualforces.com AAA

    “But something else happened during Pawlenty’s time in office: The richest Minnesotans got richer, in part due to unusually high capital gains income. So, while taxes may have increased for everyone in the state, in terms of percent of income, those changes were less dramatic for the state’s wealthiest.”

    You’re comparing apples and oranges if you admit that.

    I hope you give Republicans leeway like this when they use their standard talking points. I won’t be holding my breathe.

  • Bill Prendergast

    Jeepers, a story here *acknowledging* that Pawlenty economic policy actually *raised* the taxes of most Minnesotans? The liberal blogs have been pointing that out ever since Pawlenty promoted the state cuts to Local Government Aid (the cuts that effectively raised our property taxes.)

    You guys can’t start reporting that now. That’s *substantive* journalism that could *help* voters make more informed decisions at election time. You better watch it down there at MPR; people in politics are going to get P.O.’d if you guys keep doing stuff like that. Jeepers.

  • Ross Reishus

    Jeepers is right. Your interviewer in the most recent Governor Dayton piece was unrelenting in her suggestions of how raising taxes would undermine Minnesota’s economy, and Pawlenty gets a free ride until now? Jeepers indeed.

  • Ralph Crammedin

    It’s painful to watch you guys bend over double backwards to avoid offending the GOP. Republican tax policy for decades, at both federal and state levels, has been to lift money from the Middle Class Wallet and deposit it in the Very Rich Vault.

    Any article that fails to mention this Fact (Fact!) exhibits bias in favor of the Republican Tax Fairytale. You may as well be honest and say it. The Wingnuts have already declared you librul, regardless.

  • Colin Lee

    Wow, it’s long overdue that a reporter finally reported this. We’ve been saying it for a decade.

  • Sean Walther

    I have a general comment about PoliGraph: It seems like DFL politicians’ misleading statements get more leniency than Republican politicians misleading statements. Let’s face it, both parties stretch the truth for their purposes. How about providing useful, direct, and factual information that our state’s politicians can’t seem to muster.