Wealthy Minnesotans react to Gov. Dayton's tax plan
The wealthiest 5 percent of Minnesotans have plenty to say about Gov. Mark Dayton's proposal to raise taxes on them, and only them.
Dayton is asking the state's top earners to help erase a $6.2 billion deficit. His plan to tax the rich, including a temporary surtax, would give Minnesota the highest state income tax rate in the country.
Yet some couples, including Steven Foldes and his wife, Riv-Ellen Prell, say they're willing to pay more to the state.
Foldes and Prell have made a good life for themselves in a stylish mid-century home near Cedar Lake in St. Louis Park. She's a professor at the University of Minnesota, and he's a vice president at a healthcare-services company.
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Together, their taxable income is more than $150,000, so they'd be on the hook for higher taxes under Gov. Dayton's tax plan.
But don't call them wealthy.
"We don't consider ourselves wealthy, but we know we do very well relative to many other people," Foldes said.
The word they prefer is "fortunate." Foldes and Prell are both highly educated, and over the years they've spent their earnings on the things that matter most to them -- such as their children's college degrees. Now in their 60s, they are edging closer to retirement.
They estimate they would pay about an additional $2,000 in taxes under Dayton's plan.
"Because we've been very fortunate, I believe it's my responsibility as an American and a Minnesotan who values and loves my state and nation to continue think about other generations, and to do what I can," Prell said.
And they aren't thinking about packing their bags for a lower-tax state.
"The only thing that would cause me to leave Minnesota is the weather," Foldes said.
Foldes said he enjoys the quality of life in Minnesota, its natural beauty, its growing diversity, and close friendships with other professionals and like-minded people.
But the couple are liberal DFLers, and their philosophy on government and taxes aligns more closely with Gov. Dayton's than with Republicans who control the Legislature, and who've said they won't go along with Dayton's proposal.
Foldes and Prell agree with the governor that the wealthiest people aren't paying their fair share of taxes, and that the middle class is over-taxed.
Yet not every top earner sees it that way.
Jeffrey Mayhew, a conservative from Orono, said he also believes in issues of fairness, and thinks the wealthy are getting picked on. He said Dayton's plan seems to be pitting the masses against the upper class.
"It seems to be a liberal way of saying, 'We're going to give everything to you, and don't worry about paying for it. We're just going to go to 'these people' paying for it over here, and it's not going to affect your income or your taxes,'" Mayhew said.
Mayhew thinks the rich can't solve the problems of what he considers wasteful government spending. Sitting behind the desk of his insurance agency in Plymouth, he said he works 50 to 70 hours a week, and he's being penalized for his success.
Under Dayton's plan, Mayhew said he would pay $10,000 or more a year in additional taxes. Like the couple in St. Louis Park, he declined to say publicly exactly how much money he makes.
And even though Dayton's tax plan is aimed at wealthy people, not corporations, Mayhew said higher personal income taxes will hurt the state's climate for businesses because employers would have to pay their workers more to be competitive with other areas.
"How are we going to attract companies when the cost of doing business is so much higher than other parts of the country?" he said.
Mayhew would also be on the hook to pay Dayton's proposed new state property tax on homes valued at more than $1 million.
A new revenue forecast released next month will paint a clearer picture of Minnesota's financial situation. If it improves, Dayton has said he'll roll back his proposed cuts, but he hasn't said he'd scale back his proposed tax hikes.
