Tax Hikes on Wealthy Face Tough Chances

A record eight states raised income taxes on their top earners last year, but similar proposals face much tougher chances in Minnesota and New Jersey this year. Republican governors in both states have ruled out raising taxes on the wealthy, even amid crippling budget shortfalls. But that hasn't stopped Democrats in both legislatures from trying.

Minnesota has a huge problem on its hands after the state Supreme Court issued an opinion last week that ripped a $3 billion hole in the budget with less than two weeks remaining in the legislative session. Under enormous pressure to balance the books, Democrats in the state Senate on Monday (May 10) unveiled legislation that would solve the problem partly by raising taxes on the rich. But that was an immediate deal breaker for Republican Governor Tim Pawlenty, as the St. Paul Pioneer-Press reported .

"The DFL's (Democrats') proposed tax increase is like Jason in Friday the 13 th - it's scary and it keeps coming back," the governor said in a statement. "I know the DFL doesn't look to me for advice, but here's a tip: People want government spending cut, not taxes increased."

New Jersey Democrats are getting just as blunt a reception from their new Republican governor, Chris Christie, who has been unequivocal in vowing to veto any tax increases the legislature sends him.

That appears a distinct possibility after Democrats on Monday pressed ahead with a plan to create an income tax surcharge on individuals making more than $1 million per year, as The Philadelphia Inquirer reported . Democrats previously had indicated that they wanted to reinstate an income tax surcharge for those making $400,000 annually, but the new plan appears to reflect a calculation that Christie will seem out of touch with voters if he vetoes a tax increase for those earning $1 million while pushing ahead with deep budget cuts that would hit the poor hard.

Christie, however, could hardly have been more forceful in his rejection of the Democrats' plan.

"Let me be real clear on it," he said. "They can call it whatever they want to call it. They can package it however they want to package it. They can send it to me with a bow on it. They can send it to me in a nice box, gift-wrapped. They can throw it over the transom and leave it there and hope nobody smells it. No matter how they send it to me, it is going back. It is going back with a veto on it. We are not raising taxes in the state of New Jersey this year."