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Letter: The pretend tax cut

“Daddy, what is a tax cut?” asked my daughter.

(Aha, I thought, a chance to teach her a lesson in basic economics.) “It means you pay less in taxes now than you did before.”

“So after a tax cut, the taxes should be less now than they were before?” she queried.

“That is correct,” I answered.

“So in 2013 when Minnesota taxes were raised $2.1 billion we would be paying more taxes?” she asked.

“Yes,” I replied, “we would be paying $2.1 billion more in taxes.”

“So when about 500 million dollars’ worth of that $2.1 billion are cut, is that a tax cut?” she wondered.

“Well, that is what the politicians call it,” I muttered.

“But aren’t we still paying $1.5 billion more in taxes now than we were two years ago?”

“Correct again,” I sighed.

“Daddy, help me to understand that we are now paying $1.5 billion more in taxes than just two years ago and yet we are told that we just had a big tax cut. It seems that we should be paying less in taxes now than two years ago if it were truly a tax cut.”

“You know honey, you are right!”  “If it were a true tax cut, I would be paying less in taxes now than I did two years ago, but I’m not; I’m actually paying more taxes.”  “Perhaps we should more accurately call this a “Pretend tax cut.”

It is a simple matter of record that Minnesota taxes are much higher now than in 2012. It is time elect those who understand what a tax cut really means.