As reported by KARE11.com on May 11:
Earlier in the afternoon Pawlenty, as promised, vetoed the Democratic budget-balancing bill that passed Monday. The bill would have raised the income tax rate on the highest earners in the state, those joint filers with adjusted gross taxable income of $200,000 and single filers who make more than $113,300.
The tax hikes would've applied to roughly 122,000 Minnesotans, who would've seen their rate rise from the current 7.85 percent to 9.15 percent. But Pawlenty, in his veto message, said those are the people most likely to use their extra income to create new jobs…
"It is nonsensical to increase taxes on job providers merely weeks after I signed a bill to provide tax incentives for Minnesota businesses to grow jobs," Pawlenty said in a letter to opposition leaders explaining his veto.
The KARE11.com report obviously was off base on its economics in declaring that the tax hike would have affected only 122,000. The impact of higher taxes spread throughout the economy, including, as the Governor noted, hiking taxes on job creators.
Raymond J. Keating
Chief Economist
Small Business & Entrepreneurship Council
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