Archive for the ‘Economy’ Category
Tuesday morning, GOP legislators, led by House Minority Leader Kurt Daudt and Senate Minority Leader David Hann, visited the St. Cloud Regional Airport to discuss the just-ended session. After brief presentations by Daudt and Hann, they opened things up for questions.
Rep. Daudt first noted that the DFL legislature raised taxes by “$2.1 billion” and fees by another $300,000,000. Sen. Hann and Rep. Daudt both talked about not needing that tax increase to solve a $627,000,000 deficit. Both legislators spoke about the need to spend money more wisely, with Sen. Hann noting that the DFL didn’t include any reforms in their budget or policy bills.
When asked about the $400,000,000 in property tax relief, Rep. Jennifer Loon verified that most of the relief came in the form of increased payments to cities and counties. When asked if LGA payment increases helped cities like Duluth, St. Paul and Minneapolis just spend more rather than provide property tax relief, Sen. Hann and Rep. Daudt said that there’s a history of that. Adding to that, Sen. John Pederson said that, while the DFL was screaming about people’s property taxes going up, St. Cloud’s property taxes were actually going down.
Another piece of legislation that was brought up was the energy bill. The bill passed in the House but, ultimately, it didn’t pass in the Senate. Still, it’s almost a guarantee that the DFL will bring it up early in 2014. Sen. Pederson said that one of the Senate DFL’s selling points for the legislation was that it would lower electric rates. Republicans questioned that talking point by asking why northern Minnesota needed the carve-out if their rates were dropping.
The most chilling part of the press conference was hearing Teresa Bohnen, the president of the St. Cloud Chamber of Commerce talk about how businesses are hurting and that the tax bill won’t help with that. Afterwards, Rep. Daudt said that businesses are planning ahead for the tax increases. He then said that that’s why job growth is slowing down. Rep. Daudt said that we won’t see a spike in unemployment but that we’re likely to see job creation stagnate.
The other point they made was that, while the middle class won’t get directly hit with tax increases, the middle class will get hit with higher priced products as a result of the tax increases on “the rich.” Rep. Jeff Howe said that the warehousing tax will trigger higher prices, adding that that tax increase “wasn’t well thought out.”
With Minnesota’s 2013 legislative session in the books, it’s time to total up the DFL’s damage to Minnesota’s economy. The tax increases will hurt Minnesota’s economy the most are the business-to-business sales taxes on warehousing and telecommunications. The warehouse tax has been tried in several states, including Massachusetts. It’s been quickly repealed because it does lots of damage in a short period of time. I suspect that the DFL will repeal the warehousing tax early next session. If they don’t, the damage that tax will do will be considerable, both in terms of economic damage and in political terms.
Another tax increase that will hurt Minnesotans is the cigarette tax increase. In Chicago, where the cigarette tax is high, 75% of cigarette packs don’t have a tax stamp on them. That’s how many cigarette smokers buy their cigarettes on the black market in Chicago. Follow this link for more on cigarette tax avoidance.
Another way that the DFL hurt the middle class they claim to fight for is through the energy bill, which I wrote about here. Here’s what Rep. Mike Beard, the premier authority on energy issues in the Minnesota legislature, said about the DFL’s energy bill:
House Democrats passed their hugely controversial Energy Policy omnibus bill this week that increases even more aggressive, unfunded renewable and solar mandates on utility companies.
Besides huge technological difficulties implementing the new law, it will increase electric costs for all ratepayers (homeowners, businesses, hospitals, you name it) and decrease the reliability of our state’s energy sources.
This bill benefits, to the best of my knowledge, a few Minnesota solar companies that rely on a mandated pool of government money to survive, even though they have over three decades of federal mandates throwing hundreds of billions of dollars at their industry.
The DFL’s energy bill, passed in the name of global warming, will drive up electricity prices:
REP. BEARD: I still have a picture of a poster in my office that Jimmy Carter’s administration put out in 1978, thirty-five years ago, that by the year 2000, fully 20% of our power would come from solar PB. He dropped $12,000,000,000 on that adventure. And what do we have to show for it? Nothing. One tenth of 1% today, thirty-five years later, is solar PB. And so we’re going to take another run at that windmill, and I’m not talking about the ones on Buffalo Ridge. We’re picking winners and losers and we’re desperately hoping that these are winners this time.
In short, the DFL raised taxes on the middle class by raising the cigarette tax. The middle class will get hurt through higher electric bills thanks to their energy bill. The DFL passed that bill to satisfy another of their special interest allies, namely environmental extremists.
Finally, their multitude of tax increases on small businesses will chase some businesses from Minnesota. Other businesses will keep part of their operations here while expanding their businesses in states more hospitable to businesses.
After proclaiming that the GOP’s budget was filled with gimmicks, especially including the school shift, the DFL’s budget failed to pay off the school shift. In 2012, the GOP legislature passed a bill that would’ve paid off the school shift, which Gov. Dayton promptly vetoed. After refusing to pay off the school shift, Speaker Thissen had the audacity to say that their budget didn’t include shifts or gimmicks.
Thanks to the DFL legislature, Minnesotans will have fewer dollars in their pockets and capital will continue leaving Minnesota at an alarming rate.
This article is fantastic news for Minnesotans:
DFL legislative leaders say plans to raise the gas tax for road projects and a metrowide sales tax for transit projects are dead for the year. “I would say they’re probably both dead,” said DFL Senate Majority Leader Tom Bakk.
Senate leaders have been pushing to increase the gas tax to pay for additional road and bridge projects. But historically high gas prices and opposition from Governor Dayton has proved too big of an obstacle.
There’s still next year but that’ll be a tricky subject. Will the DFL want to raise more taxes heading into an election year? Speaker Thissen’s statement is interesting:
DFL House Speaker Paul Thissen suggested there was discomfort in raising gas and sales taxes at a time when they’re also raising other taxes to balance the budget and spend more on schools.
That’s an interesting statement considering the fact that the DFL insists that they’re only taxing the rich. If the DFL Tax Bill is only taxing the rich, a gas tax increase wouldn’t be an additional tax on the middle class. Likewise, the metro-wide sales tax wouldn’t be a major addiotional tax.
The bad news is that Gov. Dayton, Speaker Thissen and Senate Majority Leader Bakk have agreed to a new Tax Bill:
Although a new fourth-tier income tax rate on the state’s highest earners has been part of the mix since the start of budget negotiations, it has been unclear until tonight what that rate would be, 9.85 percent. That is higher than the House’s original position of 8.84 percent and lower than the Senate’s proposal of 10.7 percent. The 2 percent surcharge on those taxpayers to pay off the money the state owes the schools has been dropped. Gov. Mark Dayton said that money will be allocated this biennium toward a payment, and he expects to have the debt paid off during the next biennium.
While new taxes on alcohol have been dropped from the bill, cigarette smokers are likely to pay about $1.60 a pack more, a House position. Additionally, smokers could be subject to new taxes announced today to fill any funding shortfall to pay the state’s share of the stadium for the Minnesota Vikings.
Right now, 19% of cigarettes sold to smokers come from the black market, the internet, other states or gaming casinos. When this cigarette tax increase goes into effect, 30% of cigarettes will be sold through the black market, the internet, other states or gaming casinos. Meanwhile, convenience stores will lose customers, which will result in smaller profits and fewer jobs.
Simply put, this cigarette tax will shrink cigarette tax revenue to the state because people will change their buying habits.
Further, the income tax increases will be stifling. In addition to the higher tax rate, small businesses will get hit with fewer deductions and a sales tax increase will be levied on warehouses, electronic repairs and telecommunications.
Finally and most importantly, the DFL’s tax increase and their budget won’t strengthen Minnesota’s economy because it only focuses on the middle class. This budget hurts businesses. You can’t be create jobs if you hate the employers. It’s that simple.
This article is the article everyone’s expected since Election Night. Unfortunately, it isn’t the article we’d been hoping for.
Thissen, Gov. Mark Dayton and Senate Majority Leader Tom Bakk of Cook said they agreed on spending targets and will give conference committees a few other guidelines, such as:
- The sales tax would not rise on consumer goods, including clothing, but businesses could pay sales tax on goods sold to other businesses.
- Income taxes would go up on people in the top 2 percent of Minnesota earners, couples with $250,000 or more taxable income.
- An income tax surcharge would be added for Minnesota’s richest of the rich, with proceeds going to help repay money the state has borrowed from school districts.
- Cigarette taxes would rise.
- Some business tax breaks would disappear.
- All-day kindergarten would be funded.
- The state would spend $400 million in property tax relief, such as by increasing aid sent to local governments.
Thanks to this agreement, companies will leave Minnesota. Businesses staying will get with multiple tax increases. Businesses will get charged sales taxes on services. Additionally, they’ll get hit with higher income tax rates. That’s bad enough but that isn’t all. Current deductions will get eliminated, too.
Why would a business stay in Minnesota and absorb all those tax increases in a single year? The simple answer is many won’t.
The supposed property tax relief is a mirage. When liberal mayors get their increased LGA checks, it won’t go towards property tax relief. It’ll go towards increased spending. That isn’t a prediction. It’s noting what’s happened in the past without fail. Anyone that thinks Chris Coleman won’t increase spending on things that aren’t necessities isn’t paying attention. He’s done it in the past. He’s a creature of habit. He’ll do it again.
The three Democrats said middle-income Minnesotans would not pay more taxes other than for cigarettes. But when reporters pushed him on the subject, Dayton said that some of the business taxes could trickle down to consumers in higher prices.
Whether it’s in the form of a direct tax increase or it’s in the form of higher prices charged by businesses who’ve gotten hit with a tax increase, the net effect is that the middle class will get hit with higher prices, leaving people with less money to spend on the things of their choosing.
Most importantly, this budget won’t strengthen Minnesota’s economy. The best outcome we should expect from this budget and these policies is that it won’t hurt the economy too much. Fewer jobs will be created as a result of the tax bill. Company profits will be significantly smaller. People will have less disposable income thanks to the energy bill that’s about to get signed.
Gov. Dayton has sent out emails touting a “better budget for Minnesota.” That’s what we deserve. Unfortunately, the DFL has seen to it to give us this budget, which doesn’t strengthen Minnesota’s economy.
It’s no longer debatable whether the DFL hates business. They certainly hate entrepreneurs. Rep. Ryan Winkler’s minimum wage legislation is the ultimate combination of nanny-statism and heavyhanded government:
The Minnesota House likely will approve a minimum wage increase later this week, after a committee Monday expanded the bill’s reach by doubling state-required parental leave for a new child.
Under the amended measure by Rep Ryan Winkler, DFL-Golden Valley, employers would be required to grant 12-week leaves after a birth or adoption.
The House Ways and Means Committee tacked the provision onto Winkler’s bill that aims to raise the minimum wage to $9.50 an hour in 2015 from today’s $6.15. Then the wage would automatically increase.
Why would employers do business in a state that requires 12 weeks of maternity leave? For an employer, that means an extra 6 weeks of doing without an employee. That’s almost a fourth of the year without an employee. This is nanny-statism that’d make Michael Bloomberg proud.
That’s before talking about raising the minimum wage by almost 50% in 3 years. To cover the cost of higher wages, they’ll hire fewer people. Rep. Winkler should rename his legislation the ‘Growing the Nanny State and Killing Jobs bill’ because that’s what this bill will do.
A few weeks ago, Rep. Winkler tried spinning his legislation by saying that raising the minimum wage doesn’t hurt employment. At the time, I argued that that isn’t accurate. It’s true that raising the minimum wage doesn’t always hurt employment. It’s equally true that there are times, like during a weak economy, when raising the minimum wage kills jobs.
Businesses that are having trouble making money simply won’t hire people if the cost of wages increases. When the increased minimum wage is increased dramatically, like what’s being done in Rep. Winkler’s legislation the hiring freeze is that much more dramatic.
Further, employers seeking to expand will cross Minnesota off their list of destinations when they see this level of regulation and overbearing government. Business starts will shrink. Mitch’s post shows that people are already leaving Minnesota:
Though data can deliver mixed messages, data from the Internal Revenue Service (IRS) point to one clear and worrisome fact: Minnesotans and their wealth are moving to Southern and Western states. Between 1995 and 2010, an average of $340 million in income—based on 2010 dollars—moved each year from Minnesota to other states—a movement totaling more than $5 billion over 15 years. The states that on net receive the most Minnesota income tend to be low tax states such as Arizona, Colorado, Florida, Georgia, Nevada, South Dakota, Texas, and Washington.
It pains me to say this but it’s got to be said: Minnesota isn’t special anymore. The lakes are still beautiful. The woods are still picturesque. The regulatory burden is excessive. Do-gooder organizations like Conservation Minnesota are attempting to kill industry in northern Minnesota. Tax rates are confiscatory. The special interests, aka AFSCME, MAPE and ABM, run the DFL. They say jump. The DFL asks ‘off what’?
Sacred cows abound within the budget. Bills pass through this legislature because we have to ‘invest in higher education’ or all-day Pre-K or whatever else the special interests demand of the DFL.
It’s time for the DFL to wake up to the fact that they’ve reached a breaking point on excessive taxation, irresponsible spending and overregulation. These statistics prove that people are voting with their mortgages (and their feet) on what’s excessive.
These paragraphs are a stinging indictment of Rep. Winkler’s bill:
Republicans and business leaders generally said the higher wage would hurt Minnesota firms. “There is no capacity on Main Street to absorb any more expense,” Rep. Jim Abeler, R-Anoka, said.
Rep. Bud Nornes, R-Fergus Falls, said he talked to a restaurateur who makes $60,000 profit a year. The new minimum wage requirement would cost him $60,000, Nornes said. “Why should he stay in business?” Nornes asked. “We’re going to lose some.”
As damning as that information is, and it’s plenty damning, it’s nothing compared with this admission:
However, Rep. Tim Mahoney, DFL-St. Paul, added: “It is a small number of businesses that will be hurt.”
Isn’t that reassuring. It’s only a few businesses that will get hurt. I’m sure that’ll ease those businesses’ minds.
The DFL can argue all it wants but capital flight from Minnesota exists. It’s just that the delusional idiots running the DFL think it doesn’t exist. In the end, reality trumps theory.
This Tribune op-ed highlights the tax increases being imposed on Minnesotans. Here’s a glimpse:
The tax plans and budget proposals that’ll be debated and hammered together in St. Paul in the coming weeks do include healthy tax hikes on wealthy Minnesotans. But they also include taxes and fees every one of us will pay, no matter what our income level. In fact, some of the new and rising “revenue sources,” as lawmakers like to call tax hikes and fee increases, would be paid, disproportionately, by lower-income Minnesotans.
Most notably on the table are tax increases on beer, wine and booze, in a state that hasn’t had a tax increase on liquor in 26 years. But now we face the prospect of paying 7 cents more in taxes per drink and as much as $4 more in taxes for a case of beer.
The state’s cigarette tax also is almost certain to go up, to $2.83, a $1.60 increase, under a House proposal.
And if you thought Minnesota’s first-ever tax on clothing died when the governor dropped it after his initial budget proposal, well, not so fast. It’s still alive in the Senate, along with a long list of other previously untaxed services, including on car repairs, over-the-counter drugs like aspirin, tattoos and even dating services.
Sports fans can be on alert, too. The Senate has a new 13 percent wholesale tax on sports jerseys and other memorabilia to help cover the state’s portion of funding for a new Minnesota Vikings football stadium. The total sales tax on sports memorabilia, including sales tax, could push 20 percent in Minnesota.
If you think this was a Strib op-ed, I have to say that it isn’t. It’s in the Duluth News Tribune. If you thought that the Strib editorial board would write something like this, you really need to get back in touch with reality.
Two weekends ago, Matt Entenza tried spinning the DFL’s tax increases, which I wrote about here. Here’s how Entenza tried spinning the DFL’s tax increases:
Part of what Democrats are responding to is an election where people said ‘We’re tired of higher class sizes. We’re tired of roads that are falling apart and a Human Services Department that doesn’t work as well as it should.
Policy lightweights like Entenza know that raising taxes on cigarettes, income and liquor won’t fix a single pothole. They’re fixed by revenues from the gas tax. Period.
The heart of the DFL’s tax increases are summarized in this theory:
The type and formula of most schemes of philanthropy or humanitarianism is this: A and B put their heads together to decide what C shall be made to do for D. The radical vice of all these schemes, from a sociological point of view, is that C is not allowed a voice in the matter, and his position, character, and interests, as well as the ultimate effects on society through C’s interests, are entirely overlooked. I call C the Forgotten Man.
Last fall, the DFL ran on the Forgotten Man theory of taxation. This year, however, the Senate DFL, the ones that can’t count straight, have decided that the middle class aren’t paying their fair share. In addition to raising the plethora of regressive taxes listed earlier, the Senate, in Sen. Bakk’s finite wisdom, has decided to raise income taxes on the middle class.
What’s interesting is the sports memorabilia tax. It should be renamed the Boy-did-I-screw-up-the-Vikings-Stadium-funding-bill tax increase. Thanks to the Dayton administration’s willingness to buy into the gambling industries’ wildly optimistic projections on e-tabs, the state is forced to rethink their funding of the Vikings stadium.
Had the Dayton administration been honest about the e-tabs projections, the stadium likely wouldn’t have gotten support. Then again, if the DFL had honestly campaigned on raising taxes on everyone, they wouldn’t have gavels this year.
Thanks to the Duluth News Tribune’s editiorial, Minnesotans are finding out that the DFL won’t hesitate in lying about taxing the middle class and the working poor.
Tags: Tax The Rich, Mark Dayton, Tax Increases, Cigarette Tax, Income Tax, Liquor Tax, Sports Memorabilia Tax, Tom Bakk, Middle Class Tax Increase, DFL, William Graham Sumner, The Forgotten Man, Economics, Philanthropy
Rep. Pat Garofalo ripped the DFL as out of control during this speech during the DFL tax increase debate:
There were 2 highlights during the speech. Both related to the silica sand tax included in the House DFL tax increase bill.
Here’s what Rep. Garofalo said about that tax:
You’re gonna actually tax an industry out of existence with a tax on silica mining. I actually had a liberal activist say to me they thought that by raising taxes on silica mining, they would somehow impact the fracking in North Dakota. (Laughter in background) Spoiler alert. They’re gonna get the sand from other states. Doesn’t matter. It’s gonna have no impact whatsoever on other states’ ability to do fracking of natural gas and oil but it will kill jobs here. And it’s not business groups saying that. It’s not small businesses saying it.
We’ve heard from the local 49ers. We’ve heard from the local unions. In fact, members, this is how totally delusional this tax increase is: Mark Dayton actually labeled the House DFL silica sand tax “ridiculous.” So when a tax increase is so high that Gov. Dayton labels it ridiculous, you know you’re checked out for lunch.
That’s stunning. A DFL activist thinks that killing jobs in Minnesota will shut down the Bakken. That isn’t stupid. That’s beyond frightening. And that isn’t the most frightening part of this.
The truly frightening part of this is that Gov. Dayton, the man whose every thought is to raise taxes, thinks the silica sand tax is “ridiculous.” When a taxaholic like Gov. Dayton thinks that a tax increase goes too far, red flags should go off immediately.
I wrote here about the differing DFL tax bills, characterizing them as disastrous and counterproductive. Little did I know just how disastrous and counterproductive the DFL tax bills were. This is downright frightening.
Tags: Tax Increases, Silica Sand Tax, Paul Thissen, Unemployment, Cigarette Tax, Environmentalists, Mark Dayton, Tom Bakk, Sales Tax, DFL, Unions, 49ers, Fracking, Bakken Oil Field, Natural Gas, Pat Garofalo, MNGOP, Election 2014
At the start of this session, I said that the DFL would sail through because Alida Messinger would give them their marching orders. When Gov. Dayton introduced his bill, businesses far and wide criticized it for imposing a sales tax on transactions between businesses and lawyers, accountants and other service providers. When the House DFL introduced their tax bill, it was criticized for imposing a gigantic, disastrous income tax increase, raising the top income tax rate from 7.85% to 12.49%. It’s difficult to imagine how the Senate DFL’s tax bill could be worse.
Difficult but no longer impossible:
Democrats in the state Senate released a plan today that increases income taxes on wealthiest 6 percent of Minnesotans, raises the sales tax on clothing and services, and increases the cigarette tax.
Republicans don’t like it and even some Democrats in competitive districts are uneasy about the taxes and spending. But DFL leaders say the $1.8 billion dollar tax increase is needed to erase the state’s budget deficit and increase spending for schools and property tax relief.
It’s incredible that the Senate DFL took the worst part of Gov. Dayton’s tax proposal, the sales tax increase on services, watered down the worst part of the House DFL’s tax increase, then added their own terrible wrinkle by raising income taxes on the middle class.
While Senate DFL leaders praise the bill as good tax policy, some of their rank-and-file members remain apprehensive about it.
“This is going to be a hard one for me to support,” said first-term DFL Sen. Melisa Franzen. Franzen, who represents the swing district of Edina, Minnetonka and Bloomington, worries the bill could harm the state’s business climate.
“If the cost of doing business in Minnesota is going to rise and small business is going to be impacted, that is something that I have to take into account,” Franzen said.
Sen. Greg Clausen, DFL-Apple Valley, worries about the income tax portion of the bill, but said he thinks many of his constituents could live with it since the bulk of the extra spending is dedicated to education.
“There certainly are people out there that say ‘no new taxes.’ Whenever they see a tax they don’t support that,” Clausen said. “But I think there is also a group of people who recognize that there are needs in our state.”
First, Sen. Rest is wrong that the Senate bill is “good tax policy.” It isn’t good tax policy raising the cigarette tax because it’ll significantly hurt convenience stores while cutting cigarette tax revenues without reducing smoking.
Hurting retailers and Minnesota’s general fund while doing nothing to tamp down smoking is a nasty negative trifecta of tax policy.
Second, there’s no way the cost of doing business in Minnesota doesn’t increase. Businesses will get hit with higher income taxes & higher business costs thanks to the sales taxes on services. That’s before talking about how the cigarette tax increase will hurt convenience store sales.
If the DFL doesn’t pull its act together quickly, they’ll find lots of complaints on the campaign trail next year.
A number of years back, I heard a joke, part of which I can’t remember. Still, I can remember enough of it to make a point. Historic military figures were looking at the Soviet Union’s military hardware. When the tanks rolled through Red Square, Alexander the Great replied, “If I had had these chariots, I would’ve ruled the entire world.” On his left stood Napoleon Bonaparte. After Napoleon read the current copy of Pravda, he replied “If I had this as the official newspaper, nobody would’ve heard of Waterloo.”
The point of the joke isn’t to get people laughing. It’s to make the point that there’s a more insidious type of Pravda operating inside the United States. For the last 5+ years, I’ve called that operation the Agenda Media. The Agenda Media doesn’t think it’s their responsibility to get people important facts. In their minds, their responsibility is to push their politicial agenda. If that means omitting important facts, that’s what they’re willing to do. This video is a perfect illustration of the Agenda Media’s selective editing:
Thankfully, citizen journalists with cell phones are recording things as they happened. Thankfully, citizen journalists with video cameras are informing people by filming protests like this, then posting the video to Youtube, then reposting the videos to their Facebook page, then posting the links to their videos to Twitter.
There’s a more important point to this. OFA isn’t just about protesting against constitutional conservatives. They’re identifying people in communities who might vote for progressives. Conservatives will show up to counterprotest against OFA. The big question is whether they’ll get into the neighborhoods and identify people that might appreciate the conservative/capitalist message.
Ted Cruz, Mike Lee, Tom Coburn, Ron Johnson, Paul Ryan and Rand Paul should be the blueprint for Republicans for 2014. They’re picking fights with President Obama, Nancy Pelosi and Harry Reid, which is essential to winning elections. They’re framing debates. For instance, Sen. Coburn is highlighting tens of billions of dollars of duplicative spending that should be eliminated in this budget. Sen. Johnson is highlighting how government is used as a weapon against the citizenry. Paul Ryan is fighting for a pro-growth budget that will eventually balance within a decade.
It’s despicable that the Agenda Media would distort what happened at a protest. As despicable as that is, that’s only part of this story. OFA is already identifying potential Democrat voters. Republicans need to start this week at identifying potential conservative voters.
Tags: Organizing for Action, Gun Control, Protests, Agenda Media, Censorship, Voter ID, Democrats, Tom Coburn, Sequester This, Ron Johnson, Victims of Government Project, Mike Lee, Cut This, Not That, Ted Cruz, Second Amendment, Paul Ryan, Balanced Budget, Rand Paul, TEA Party Conservatives, Election 2014
This Strib/DFL hit piece is what I’ve been expecting considering the infighting between Ann Lenczewski and Tom Bakk over their tax increase bills. Here’s the lede in Neal St. Anthony’s Strib article:
Regardless, businesspeople aren’t united on these issues. Case in point: Even “United for Jobs” members are lobbying for increased funding for their favorite causes or to retain their tax breaks.
And not every businessperson opposes a tax hike if Dayton can make the case.
“An increase in the marginal income tax rate would have no affect on our business or whether to expand,” said Harvey Zuckman, 62, executive vice president and an owner of Minneapolis-based FirstTech, who also is president of the Twin Cities Metro Independent Business Alliance.
“Our hiring decisions are based on consumer demand and revenue. I put the question to our MetroIBA members and a number had a similar response.”
By St. Anthony’s standards, anything short of unanimity of opinion equals division within the anti-tax increase ranks. It didn’t occur to St. Anthony that there are lots of disagreements within the business community. Apparently, St. Anthony isn’t too sharp on DFL tax increase history. Apparently, St. Anthony doesn’t know about this DFL tax increase disaster. Similarly, St. Anthony isn’t aware of Gene Pelowski’s opposition to Rep. Lenczewski’s 2009 ‘tax reform’ legislation:
Pelowski said lawmakers won’t have enough votes to override a Pawlenty veto of a DFL tax plan, and said the proposals are a “fiction” that will force lawmakers to scramble to craft another budget proposal after Pawlenty’s veto. “We have to do what is real and not go through an exercise of what-ifs,” Pelowski said. “There are no what-ifs. There is only the stark reality of this budget deficit.”
This year’s fight within the DFL on the differing tax increase proposals isn’t something unanticipated. Here’s a post I wrote about the infighting within the DFL over Rep. Lenczewski’s ‘tax reform’ proposal from 2009:
“This bill proposes the most significant tax overhaul in 20 years,” said the bill’s chief author Rep. Ann Lenczeswki, DFL-Bloomington.
In addition to the tax hikes, Lenczewski’s bill removes a variety of tax breaks for homeowners and businesses. Charitable contributions, the mortgage interest tax deduction and the property tax deduction for homeowners are eliminated and replaced with a tax credit based on income. The bill also eliminates several business tax breaks, like the Research and Development credit and parts of the governor’s JOBZ program.
Lenczewski said she wants to clean up the state’s tax code. “Which is to sweep the tax code clean of all of the preferential treatment and subsidies and things we can’t afford anymore and instead bring a fairer, more progressive income tax to Minnesotans based on the ability to pay,” she said.
Here’s Sen. Bakk’s response to Rep. Lenczewski’s proposed tax increase:
Senate Taxes Committee Chairman Tom Bakk, DFL-Cook, said eliminating the current mortgage interest deduction could hurt Minnesota’s high rate of home ownership and higher alcohol taxes would drive some liquor shoppers across the Wisconsin border.
Simply put, the DFL has been split on which taxes should get increased for years. The notion that the business community is hopelessly split in its opposition to Gov. Dayton’s tax increases is DFL spin.
Convenience store operators think that raising the cigarette tax will hurt their retail outlets. What’s more, they can verify the fact that the DFL’s cigarette tax increase will hurt their businesses.
With regards to the Dayton/DFL income tax increase on “the rich”, Teresa Bohnen really has talked with 4 different companies who will likely expand their companies in other states:
St. Cloud Area Chamber of Commerce President Teresa Bohen says she’s recently talked with four local companies who say they may have to transfer their investments to other states, if the Governor’s plan goes through.
Most important in this is whether the Dayton-DFL tax increases will hurt Minnesota’s economy, strengthen Minnesota’s economy or cause Minnesota’s economy to tread water, gaining a little hear, hurting a little there.
What’s most likely to happen as a result of the Dayton-DFL tax increase is that convenience stores will get hurt, some businesses that were started in Minnesota will expand in other states while other businesses won’t be affected by the tax increases. In other words, the best Minnesota should hope for from the Dayton-DFL tax increase is for Minnesota’s economy to continue treading water.
That’s unacceptable. Then again, that’s what doesn’t get reported when the Strib writes articles that could pass for DFL press releases.
Tags: Ann Lenczewski, Tax Reform, Tom Bakk, Mortgage Interest Tax Deduction, Mark Dayton, Tax Increases, Cigarette Tax, Liquor Tax, Unemployment, Economic Stagnation, Outmigration, Convenience Stores, Gene Pelowski, DFL, Teresa Bohnen, St. Cloud Chamber of Commerce Small Businesses, Capitalism