A recent Free Press editorial addressed the issue of tax reform in Minnesota. The editorial seems to imply that tax fairness is associated primarily with relating tax payments to benefits received by the taxpayer.
Another commonly used criterion of tax fairness is ability to pay; this has been the rationale underlying our reliance on income as a tax base.
In my judgment, Minnesota has been well served by a heavy reliance on an income-based tax. Public investment in human capital, education, training and human health has helped the state to have a productive labor force. This is demonstrated by our favorable ranking compared with other states in terms of employment and income — to be employed, a person must be employable.
Perhaps the best example of a tax that is related to benefits received is an excise tax on gasoline that is earmarked for road construction and maintenance. But other examples are not easy to find.
Certainly society would not be well served by using benefits received to assess taxes used for the support of education. Households without children might see few personal benefits; rejection of school bond issues is common in such communities.
In my judgment, tax policies should not thwart prospects for public investment in human capital.