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A Taxing Thought on the Minimum Wage
By Speed Gibson
July 14, 2017

You may remember how a Stillwater restaurant added a “minimum wage fee” to their tabs in 2014, in response to a 75 cent increase in the Minnesota minimum wage. Liberals, amazed that the owners didn’t just draw on their assumed millions stashed under the floorboards, said they should just raise prices if need be, not play politics. Conservatives like me cheered for a business willing to push back with what liberals hate most: the truth. And then I realized that there was a greater point being made here, intended or not. As an added, involuntary, cost to a business, the requirement to pay above market minimum wages is a tax.

Albert Einstein’s two great theories largely sprang from his ideas of equivalence. An astronaut in a rocket accelerating at 1 G in free space experiences the same effects as another still sitting on the launch pad on Earth. Gravity, he thought, must also be some form of acceleration, hence his General Theory of Relativity.

So, is there an equivalent tax to mandated minimum wages? Let’s take some full-time employees making $10 an hour. Assuming none are subsequently laid off, the new law takes effect and now they make $15 an hour. Each makes an additional $200 a week, or equivalently $200 a week now leaves the owner’s cash register. No additional work was performed. The money simply moved from the owner to the employee.

But a tax law could equivalently demand that the $200 “shortfall” be sent to St. Paul, then distributed to the employee via a refundable income tax credit based on the $400 paid and reported. Either way, the owner, employee and State checking account balances all read the same afterward.

I therefore conclude, if the minimum wage looks like a tax and acts like a tax and is compulsory like a tax – it’s a tax, with one remaining difference to now resolve: display that tax on the receipt like the courageous Stillwater restaurant owners did.

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This LTE is filled with progressive hypocrisy about health care. For instance, the writer highlighted the Bible verse that says “Sell your possessions, and give to the needy.” That verse is found, according to the author, in Chapter 12, verse 33 of Luke’s Gospel.

As a Christian, I’m tired of Democrats cherry-picking that verse each time they want to guilt Republicans into expand a government program. That entire section of the Bible says “Do not be afraid, little flock, for your Father has been pleased to give you the kingdom. Sell your possessions and give to the poor. Provide purses for yourselves that will not wear out, a treasure in heaven that will never fail, where no thief comes near and no moth destroys. For where your treasure is, there your heart will be also.”

It’s pretty clear that Democrats aren’t following this verse’s directive. When government levies taxes to pay for government programs, that isn’t selling one’s possessions and giving the proceeds to the poor for their benefit.

That passage finished by saying that “where your treasure is, there your heart will be also.” Isn’t it clear that this passage is talking about personal behavior, not public policy? The point is that we shouldn’t use Bible verses to push public policy positions. We should use Bible verses to examine our personal behavior.

The next paragraphs illustrate the author’s true intent:

Do so by calling those Republican leaders and screaming against the repeal, voting for mercy, compassion, humanity, common sense and morality, to save the health and lives of millions of people who depend on Obamacare.

If not, next will be Medicare and Social Security for this ruthless immoral gang.

It’s obvious that the author simple wants to maintain the status quo on 20th Century programs rather than see if there’s a better way of helping the least fortunate amongst us. PS- Trusting in government creates its own problems. Isn’t it time we stopped thinking that it’s the solution to our every problem?

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Elizabeth Warren’s go-to line is that the American economy is rigged against the little guy. She’s actually right. Big government, high tax rates and a complicated tax code give the rich too many undeserved advantages. This op-ed, written by Rep. Ron Estes, (R-KS), asks some pointed questions that Sen. Warren and Sen. Sanders probably don’t want to answer.

For instance, I’m fairly certain Sen. Warren wouldn’t want to reply when Rep. Estes said “Today’s code is riddled with special interest giveaways that are essentially tax earmarks or “spending” in the tax code, to quote Martin Feldstein, the chief economic adviser to former President Ronald Reagan. Tax earmarks are tax increases on everyone who doesn’t receive the benefit. They keep rates artificially high for everyone to favor the few. Do Bernie Sanders and Elizabeth Warren believe families should be paying higher rates so that officially recognized Eskimo whaling captains – one beneficiary in today’s code – can pay less?”

Sen. Warren and Sen. Sanders have advocated for higher tax rates but they’ve never advocated for cleaning up the tax code. Cleaning up the tax code is important because, the words of “Apple CEO Tim Cook, said on 60 Minutes in 2015, ‘This is a tax code … that was made for the industrial age, not the digital age. It’s backwards. It’s awful for America. It should have been fixed many years ago. It’s past time to get it done.'”

Rep. Estes said that there’s another important reason for updating the tax code:

In 2016, Americans spent $409 billion simply complying with the IRS code, according to the Tax Foundation.

What a waste of money. That’s money that should’ve been spent on creating jobs. Instead, it was spent on Big Government. Many of these carve-outs were put in place by lobbyists who advocate for the corporations that hired them. Small businesses don’t have the advocates that big corporations have.

Sen. Warren and Sen. Sanders love big government. That means their policies lead directly to the policies and conditions that they complain about. Their policies also lead to income inequality. Policymakers should implement tax reform. While that’s happening, reporters should report the progress that’s getting made. Once the bill is signed, though, the MSM should question Democrats about their tax policies. They should specifically ask Sen. Sanders and Sen. Warren why they favor policies that increase income inequality while slowing economic growth in the middle class. They should ask Sen. Schumer why he hasn’t told Democrats to jump on board with tax simplification.

Those are things that might happen in a dream world. Unfortunately, the MSM won’t ask those questions because they agree with Sen. Warren and Sen. Sanders. The MSM, aka the Agenda Media, will work tirelessly to protect Democrats. Anyone that thinks the MSM is fair-minded and that they seek the truth isn’t thinking straight. The MSM is mostly corrupt and shouldn’t be trusted.

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According to this WCCO-TV article, Gov. Dayton will decide by tonight whether he’ll veto any of the 10 bills agreed to, passed and sent to his desk last week. The most likely outcome is that Gov. Dayton vetoes the tax bill but signs the other 9 bills, thereby avoiding a government shutdown but vetoing the Republicans’ tax cut bill.

By doing this, Gov. Dayton would give Republicans a major weapon against the DFL in the 2018 gubernatorial election. By vetoing the Republicans’ tax cut bill, Gov. Dayton will certify that the DFL a) is untrustworthy and b) thoroughly hates tax cuts of any sort or size.

WCCO/DFL stenographer Esme Murphy was wrong in stating that “If the governor vetoes even one of the bills, that means it would be back to square one: more negotiations, another special session and a new deal would have to be reached or the government would shut down on July 1.” There wouldn’t be a government shutdown if Gov. Dayton vetoes the transportation and/or tax bills.

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True to form, Gov. Dayton inexplicably vetoed middle class tax relief that Republicans supported and that the DFL rejected.

In rejecting the Republicans’ bill, Dayton said that the bill’s cuts are “irresponsibly large” and focus “tax relief to some of the most fortunate.” Responding to Gov. Dayton’s veto letter, the Center for the American Experiment replied “The House and Senate agreed to over $1 billion dollars in tax cuts last week, much of it focused on the middle class. The largest chunk—nearly $220 million—went to cut taxes on social security income. The bill also included substantial increases in subtractions and credits for expenses related to child care, education, scholarship program contributions, and student loans.”

The truth is that Gov. Dayton won’t sign a tax bill that demolishes his tax increases from 2013. For all their talk about loving the middle class, the truth is that the DFL loves tax increases exponentially more than they love the middle class. The DFL’s last centrists have either died or switched parties. Gov. Dayton and President Obama are leading the way in making them politically irrelevant.

UPDATE: All 89 DFL legislators (57 in the House & 32 in the Senate) voted against the GOP tax cuts.

Anders Koskinen’s article on Gov. Dayton’s tax ‘relief’ bill is enlightening in that it proves that Gov. Dayton still hasn’t learned that sending money to cities and counties doesn’t shrink families’ tax burdens. It just adds to those cities’ and counties’ spending.

The key part of Koskinen’s article is where he writes “the proposal ends up seeing the state spending $1.60 in subsidies for every dollar of direct tax relief. Dayton’s proposal includes $21 million in middle class tax cuts, $61 million of child care tax credits, and $34 million of property tax credits for farmers. A further $186 million, however, is a series of subsidies.”

Lt. Gov. Tina Flint-Smith adds “Our tax bill would provide significant relief to farmers by buying down the cost of local school district levies. I urge the Legislature to provide this needed tax relief for Minnesota farm families this session. In 2013, the DFL majorities in the House and Senate passed a bill with the same promises. It failed miserably. I wrote about those failures in this post and this post.

Despite all the DFL’s claims, property taxes skyrocketed anyway. While it isn’t shocking, it’s more than a little disgusting.

The DFL theory is that sending money to cities and counties should reduce the need for raising taxes. The reality is that it increases cities’ and counties’ spending. That’s been proven repeatedly. That’s why I called the DFL’s tax relief proposal a theory. It certainly isn’t verifiable fact.

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Salena Zito’s article about Wisconsin becoming a red state is must reading for Minnesota conservatives. That’s because it provides the blueprint for turning Minnesota red.

Salena’s article starts by saying “Eight years ago, Wisconsin Democrats were in the catbird seat; they held the Governor’s office, the majority in both chambers of the state legislature, two U.S. Senate seats, five of the state’s eight congressional seats and handed Barack Obama a rousing victory in the presidential election.” That’s the Wisconsin of 2008. That isn’t the Wisconsin of 2016.

What changed in that time? Since the 2008 election, “Republican Gov. Scott Walker has won his seat three times (there was a recall election in between his two outright wins) and Republicans have twice taken the state attorney general’s office, won control of both state legislative chambers (and retained them twice) and won a bruising state Supreme Court race.”

In short, Reince Priebus and Paul Ryan put together a blueprint that’s caught fire:

House Speaker Paul Ryan has played a big role in the redirection traditional Democrats towards the Republican Party with his stabilizing, responsible economic message; while his district voted for Barack Obama in 2008, it supported Mitt Romney in 2012 when he was on the ticket as the vice-presidential nominee.

The Cheeseheads’ Three Amigos turned the Republican Party of Wisconsin into winners on a mission:

What’s possible in Wisconsin is possible in Minnesota, too. The thing that Gov. Walker, Chairman Priebus and Speaker Ryan have in common is that they’re principled leaders. That means this trio isn’t afraid to push conservative initiatives. More than any other trio in US state governance, this trio has created a reform movement that’s attracting erstwhile Democrats into their movement:

And despite the news media nationalizing the raucous 2011 state capitol protests in Madison when Walker passed Act 10, which curtailed collective bargaining for most public employees, the conservative movement stubbornly continued to attract independent and Democratic voters to their message and their candidates. Walker won the recall election the unions forced with more votes than he did when he ran the first time. He won reelection in 2014 even as experts also predicted he would lose.

That led to this:

Folks have altered their allegiances politically said Todd. “The government sector unions broke the bank and forced a reckoning that surprisingly found trade union members on the taxpayer’s side,” he said.

Minnesotans don’t need another Scott Walker, Paul Ryan or Reince Priebus. Minnesotans just need principled leaders who are conservatives, too.

The one remaining state-wide elected Democrat in Wisconsin is U.S. Sen. Tammy Baldwin, who will have to try to defend her seat in 2018, the same year that Walker will likely seek a third term as governor. Those two races will be a true test to see if the Democrats understand their faults and display a willingness to comprehend and reconnect with their electorate.

If not, they risk placing Wisconsin on the battleground map in 2020 alongside Ohio.

It’s too early to predict a Republican winning the governorship in Minnesota in 2018. Still, with Republicans flipping Minnesota’s State Senate, it isn’t unreasonable to think it’s a possibility. Already, things are starting to look like it will be a good year for Republicans in 2018. Democrats will be defending 10 red-state seats in the US Senate. Once President Obama leaves office, Democrats won’t really have a national spokesperson. Meanwhile, Donald Trump will be the Republicans’ chief spokesman. He’ll be touting the many popular accomplishments of his administration, including tax simplification, returning to the rule of law and replacing Obamacare with something that’s actually affordable.

It’s time to make Minnesota a red state.

This article about President-Elect Trump’s deal with Carrier includes the obligatory ‘this sets a dangerous precedent’ quote. In this article, Steve Weitzner of Silverlode Consulting is quoted as saying “It’s a potentially dangerous policy where you reward a company that threatens to leave. It’s a dangerous precedent. Why wouldn’t every other company make the exact same pitch? In this case, you’re rewarding a company that is actually cutting a lot of jobs in the state.”

If this were done in a vacuum, Weitzner would’ve made a salient point. This isn’t happening in a vacuum, though. This was a stop-gap measure aimed at preventing a single company from leaving. The biggest thing that will incentivize other companies into staying is passing the Trump-Ryan tax simplification legislation. The other biggest thing that will incentivize companies to stay is Trump’s regulatory reforms.

What corporate CEO would have their job if they left a nation with low marginal corporate tax rates, a reasonable regulatory environment and a well-trained workforce? That’s a three-legged stool to build a vibrant economy around. That’s a foundation upon which a thriving economy is built.

Let’s be clear. The questions Weitzner asked are legitimate questions. If the Trump administration wasn’t intent on tax and regulatory reform, the Carrier deal wouldn’t be getting positive reviews. That’s why it’s important to look at this deal in its totality. It’s worth noting that companies will return to the US the minute it looks like President Trump’s tax and regulatory plans are becoming reality.

Finally, imagine a company CEO getting a call from President Trump telling them that their company would get hit with expensive tariffs if they left the US. I can’t imagine that being a pleasant conversation.

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This Our View editorial in the Mankato Free Press gets it wrong. That isn’t surprising. It’s predictable. Let’s look at what the MFP got wrong.

MFP’s headline is simple: “Our View: Legislature: Make divided government work.” Let’s be clear about something. Republicans gained seats in the House during a presidential election. While they were expected to hold onto their majority in the House, it was expected that they’d have fewer members than they started 2015 with. Republicans gained a net of 6 seats in the Senate, defeating 4 incumbents, flipping 3 open seats previously held by the DFL, then losing Senate Minority Leader Hann’s district in Eden Prairie.

The thing that brought the GOP their majorities is known to everyone paying attention to this election. In district after district, voters frequently rejected the ACA, often by wide margins. What’s astonishing is that 52 of the 76 GOP victories in the House races were won with more than 58% of the vote, something that’s unprecedented in MNGOP history. In race after race, MNGOP candidates said that fixing MNsure and the ACA were the most important, most frequently, issues mentioned by voters.

Republicans have offered plans to fix the most important parts of the ACA. The DFL has offered a one-time fix for skyrocketing health insurance premiums. Factor in that the DFL created MNsure without a single Republican vote. That brings us to this indisputable truth: the DFL needs to come in the Republicans’ direction. In the vast majority of races, voters rejected the DFL’s ideas on health care.

These paragraphs are especially disgusting:

Recent news stories reported that DFL Gov. Mark Dayton and GOP House Speaker Kurt Daudt “struck combative tones” for the upcoming legislative session with the Republicans in control of the Legislature. We hope both leaders get rid of those combative tones sooner than later.

The people of Minnesota find such tones tiresome. Last year’s legislative session left too much important work undone. Tax breaks for famers and small business, major bonding projects and road funding were left at the table.

There was a time when politicians worked to do what’s best for Minnesotans. That’s disappeared with Dayton. He’s done what his special interest puppeteers told him to do. It’s his obligation to move in Speaker Daudt’s direction because voters rejected the DFL’s ideas on health care. Voters rejected the DFL’s tax policies, too. Again, it’s Gov. Dayton’s and the DFL’s obligation to move in the Republicans’ direction on fixing MNsure and taxes.

If Gov. Dayton, Lt. Gov. Smith and the DFL insist on not listening to the message voters sent on Election Day again, they’ll soon be removed from controlling any of Minnesota’s levers of power. That’s because they’ll soon be dealing with a Republican governor and GOP majorities in the Minnesota House and Minnesota Senate. It’s that simple.

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The big story from Tuesday night was that Republicans pretty much had their way with Democrats once the urban votes were counted. Donald Trump was on the verge of victory seemingly for hours. Minutes ago, he won Pennsylvania, officially giving him 278 electoral votes. That’s without adding Arizona’s 11 electoral votes (Trump leads there 49.7%-45.4%) and Michigan’s 16 electoral votes (Trump leads there 48.1%-46.8%). If Trump wins those states, that puts him at 305 electoral votes.

Though Trump’s victory was the night’s biggest news, it wasn’t the only good news for Republicans. At this point, Republicans have lost a net of 1 seat in the US Senate with 2 races heading for runoffs. That gives Republicans a minimum of 51 seats in the Senate. Add to that the fact that Republicans easily held onto their majority in the House and you’ve got a banner night for the RNC and America’s blue collar workers.

This means that Merrick Garland won’t be confirmed as the next Supreme Court justice. In fact, the next question will be whether President Obama pulls the nomination or whether Garland withdraws his name from consideration.

Throughout the night, commentators kept saying that Trump had a path to victory but that it was a narrow, uphill path. After Trump won the must-win states of Florida, North Carolina and Ohio, those commentators said that Trump had done what he had to do before mentioning the fact that Mr. Trump hadn’t yet penetrated the Democrats’ Blue Wall. That commentary disappeared when Wisconsin fell. Suddenly, those commentators realized that Mrs. Clinton was on the defensive. They realized that she was suddenly in the position of needing to run the table to win the White House.

By the time they called Pennsylvania, the writing was on the wall. Reality had started sinking in. Most commentators in the network studios understood that Donald Trump was all but officially the president-elect of the United States. This is how Fox News called the race over:

The incoming Trump administration and the Republican House and Senate now have a mandate to get things done. The first 100 days of the Trump administration figure to be busy. They’ll have to nominate the man or woman who will replace Justice Scalia. They’ll want to work with Congress on building the wall. Hopefully, they’ll repeal and replace Obamacare. They’ll want to get started with reforming the tax code, too.

Those things wouldn’t have been possible if not for the Republicans’ big night on the nation’s biggest stage.