Pawlenty Sure Loves Him Some Regressive Taxation!

Minnesota’s Republican governor, Smilin’ Tim Pawlenty, has presidential ambitions. He also has a long history of cutting taxes on the rich and then, while pretending to be anti-tax in order to please Republican presidential tastemakers, using “fees” to hit middle-class and lower-class Minnesotans where it hurts.

Minnesota 2020 has the scoop on how Pawlenty’s regressive taxation works:

From fiscal year (FY) 2003 to FY 2008, real (i.e. inflation-adjusted) per capita state fees increased by 20.8 percent. In other words, growth in state fees has exceeded both inflation and population growth by nearly 21 percent.

Based on projections for FY 2009, real per capita state fees have increased by 19.1% from FY 2003 to FY 2009. Because state tax revenue is more than seven times greater than state fee revenue, a 19.1 percent increase in fees is no where near enough to make up for a 13.0 percent decline in taxes, so total state own-source revenue (i.e., all state revenue generated by the state excluding federal aid) is down 9 percent.

Most importantly, the increase in state fees has financial implications for the typical Minnesotan.

* Getting married? Congratulations. That marriage license will cost you $110-$40 (57 percent) more than six years ago.

* Lose that birth certificate? In 2003 it would have cost you $20 to get it replaced. Today it will cost you double.

* Going pheasant hunting? Good luck. Your pheasant stamp will cost $7.50-50 percent more than six years ago.

Each of these fees has one thing in common: the increase is much higher than inflation. While some fee increases may be necessary to pay for increased costs, it is clear that fee increases are also being used to back fill a hole in the state budget.

Fees are Regressive

Minnesota’s revenue system has become regressive, meaning lower-income households pay a larger percentage of their income in taxes than do higher income households. Regressivity in Minnesota’s tax system increased from 2002 to 2004 and is projected to increase again by 2009.

According to the Internal Revenue Service, fees are “considered regressive because they take a larger percentage of income from low-income groups than from high-income groups.” There can be no doubt that Minnesota’s increased dependence on fees has shifted more costs to those with the least ability to pay.

But Smilin’ Tim doesn’t care about all that — especially not now, when he plans to run for national office. Why? Because of what Paul Krugman explained about the Republican Party a few days ago:

Forty years ago the G.O.P. decided, in effect, to make itself the party of racial backlash. And everything that has happened in recent years, from the choice of Mr. Bush as the party’s champion, to the Bush administration’s pervasive incompetence, to the party’s shrinking base, is a consequence of that decision…

Contempt for expertise, in turn, rested on contempt for government in general. “Government is not the solution to our problem,” declared Ronald Reagan. “Government is the problem.” So why worry about governing well?

Where did this hostility to government come from? In 1981 Lee Atwater, the famed Republican political consultant, explained the evolution of the G.O.P.’s “Southern strategy,” which originally focused on opposition to the Voting Rights Act but eventually took a more coded form: “You’re getting so abstract now you’re talking about cutting taxes, and all these things you’re talking about are totally economic things and a byproduct of them is blacks get hurt worse than whites.” In other words, government is the problem because it takes your money and gives it to Those People.

There’s a reason Republicans generally don’t do well in cities, especially big ones — these entities know that they need government to survive. (Well, so do suburbs, but they often try to pretend they don’t by mooching off the core cities they surround.) If you’re a white person and you live in a city, you’ve probably made your peace with nonwhites and don’t begrudge them their share of the fiscal pie. Conversely, this is also why Republicans do their best in the South and in white-flight exurbs such as those that make up most of Michele Bachmann’s congressional district.