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Last week, I received an email from Sarah Anderson talking about the state budget surplus. Rep. Anderson wrote “Dear Neighbors, today the state budget forecast was released showing a whopping $1.54 billion surplus.” We have another $2.45 billion in the State’s rainy day fund. Despite all this money sitting in Minnesota’s coffers, it’s stunning that the DFL is pushing tax increases.

It’s time to ditch Minnesota’s ‘business model’ and establish new priorities. The achievement gap isn’t closing, at least not compared to what they should be for all the money that’s gotten spent.

Minnesota’s economy isn’t terrible but it isn’t exactly hitting on all cylinders, either. The DFL spent most of the last decade building Minnesota’s government instead of building Minnesota’s economy. In 2013, Gov. Dayton and the DFL legislature passed the biggest tax hikes in Minnesota history. Since then, the middle class of all age groups have left Minnesota. The only income group that’s increasing their percent in the state are the lowest incomes.

It makes sense. From an education standpoint, Minnesota is mediocre. From a taxes and regulations perspective, Minnesota isn’t competitive. It isn’t close. If the DFL doesn’t admit that their blueprint isn’t working, we’ll quickly turn into a cold California. Why does the DFL think that raising taxes will strengthen the economy?

In 2007, the DFL insisted that spending should be indexed to inflation. Now Melissa Hortman insists that, because spending isn’t tied to inflation, the $1.54 billion surplus is really only $382,000,000. According to Hortman, that’s justification for additional tax hikes.

The moral to this story is that the DFL doesn’t understand a thing about economic competitiveness. They want their tax hikes regardless of whether it hurts or not. This move hurts badly. Throughout the state, people from all income groups (except the poor and the working poor) are leaving for lower-tax states. That’s what’s driving the worker shortage.

Let’s hope Hortman and Walz don’t kill Minnesota’s economic competitiveness entirely. BTW, this is how socialism kills economies. When people lose the ability to make profits, they either leave the state or they stop making what they’d been making.

This MPR article highlights what happens when politicians dabble in economics.

The article starts by interviewing a couple of business owners about the effect that the Trump/GOP tax cuts have had. Ultra Machining president Eric Gibson told MPR that he’s happy for the tax cuts, saying “From a business owner perspective, we’ve got a lot of great things going on right now. From a tax perspective, as an example, a lot of what we can reinvest in the business is from those tax reductions.”

At Yeager Machine in Norwood Young America, company president Mike Yeager said “I like what the Republicans and President Trump have done for me personally and my business. I will vote for people that support the current administration’s policies.”

Rather than listening to her constituents, Tina Smith thinks that she knows better, saying this:

“It doesn’t feel like a difficult position to me.” Smith said she would not have voted for the bill because it showers wealthy people with tax breaks at the expense of the middle class and will add more than a trillion dollars to the national debt.

“It’s not like that money was sitting in a bank somewhere waiting to be passed out. That’s money that we borrowed from our children and our grandchildren. I do not think that’s responsible.” Smith said increasing investment in workforce training and innovation would help more people get ahead.

How stupid is that? Tina Smith wants the government to “invest” our taxes in government workers because … government has such a great track record of “workforce training and innovation”? Let’s get a little serious. Then there’s this:

President Trump inherited a growing economy, and the tax cut has helped sustain the growth, said College of Saint Benedict and Saint John’s University economics professor Louis Johnston.

Technically, the economy was growing but it was the worst growth rate during a recovery in 75 years. The average annual growth rate during the Obama years was 1.9%. That’s pathetic. Since President Trump got rid of President Obama’s policies, the economy has been growing at a 4% average annual growth rate.

Republican Karin Housley (right) is a big fan of the Republican tax cut and is convinced that campaigning on it will help her win. Democrat Tina Smith said she’s not a fan because it showers wealthy people with tax breaks at the expense of the middle class. Mark Zdechlik | MPR News
Also, wages are rising during the Trump administration. They were stagnant during the Obama administration. Finally, small business confidence, which had been trending downward during President Obama’s second term, are skyrocketing under President Trump’s administration.

This is why leftists like Tina Smith and Prof. Johnston aren’t qualified to be economists.

Special thanks to Prof. John A. Spry for writing this op-ed that highlights the constitutional weaknesses of the DFL’s health care legislation.

First things first: the bill being proposed by the DFL is HF358. The text of the bill, known as the Minnesota Health Plan, is found here. What’s interesting is the bill’s funding mechanism, which is explained “at the marketing website for the MHP.” It says “The Legislature and Governor would have no authority over the MHP revenues. This is necessary in order to prevent the use of MHP premiums to balance the state budget and would also prevent politicians from starving the health plan of needed funds, a problem that occurs in some of the countries where politicians are responsible for funding their national health plans.”

It isn’t surprising that Prof. Spry notes this:

The advocates of the Minnesota Health Plan want to take away your current health insurance and replace it with the health insurance the unelected government board decides you will have. They even want to take away your right to vote for the people who will make these decisions.

The single-payer Minnesota Health Plan puts health care decisions in the hands of people who are never accountable to the people at the ballot box. That is a terrible way to run a government.

If this is the DFL’s health care ‘solution’, then that’s proof that the DFL doesn’t care about We The People. It’s proof that they care most about bureaucracies and unaccountability.

The DFL’s single-payer health care solution creates more problems than it solves. On top of that, its funding mechanism is unconstitutional. Rather than the DFL scrapping the bill, I’d rather just scrap the DFL this Election Day.

Prof. John Spry’s op-ed talks about the DFL’s Minnesota Health Plan. In Part I of this series, I highlighted the fact that this bill, if passed and signed into law, would have the authority to raise taxes unilaterally:

(f) Premiums and other revenues collected each year must be sufficient to cover that year’s projected costs.

Prof. Spry then notes this:

The Democrats’ legislation says that regional health boards would select eight members of the new Minnesota Health Board. The first eight members selected by regional health boards would then appoint seven additional members who would have to be members of specified health care interest groups. These 15 appointees would never be accountable to the voters at a ballot box. They would have control over life and death decisions for every Minnesotan.

This bill provides for a lengthy list of ‘benefits’ for Minnesotans. See Part I for the benefits. The DFL doesn’t hesitate in telling Minnesotans that they have to buy expensive health care plans. This is especially unfair to young healthy people. Why do they need policies with 31 different coverages?

Prof. Spry then writes:

Americans have proudly rejected authoritarian rule by unelected officials. Our Revolutionary patriots proclaimed “No Taxation without Representation.” In that American tradition, the Minnesota Constitution gives the power of taxation to an elected Legislature. It further requires that this “power of taxation shall never be surrendered, suspended or contracted away.” It is democratic to never let the elected Legislature surrender its power of taxation to an unelected Minnesota Health Board.

The thing that must be noted is that this takes virtually all decision-making out of the hands of families (in terms of what policies they want to purchase) and the legislature (in terms of taxation.) There is nothing democratic about the DFL’s bill. The DFL’s legislation is more fascistic than democratic.

That’s why it must be immediately rejected. Prof. Spry then asks this important question:

Why do Minnesota Democrats want to give the power to tax and spend to the appointed members of the Minnesota Health Board?

Then he provides their answer:

They explain at the marketing website for the single-payer Minnesota Health Plan (MHP):

“The Legislature and Governor would have no authority over the MHP revenues. This is necessary in order to prevent the use of MHP premiums to balance the state budget, and would also prevent politicians from starving the health plan of needed funds, a problem that occurs in some of the countries where politicians are responsible for funding their national health plans.”

In other words, they don’t want accountable people exercising control over their health care plan.

This legislation stands in opposition to the Minnesota Constitution. The Minnesota Constitution proclaims that all political power is inherent in the people. It provides for the regular election of public officials in the legislative, executive, and judicial divisions. It is democratic and good that legislators and the governor are accountable to the people at the next election.This fall, the DFL has run ad after ad trying to scare people into not voting for Republicans because, allegedly, Republicans want to deny people with pre-existing conditions health insurance. In the DFL’s ads, they try frightening people into thinking that Republicans will deny people coverage, which is a lie. What’s frightening is the DFL’s Minnesota Health Plan.

The Minnesota Health Plan has a lengthy list of benefits, including “inpatient and outpatient health facility services; (2) inpatient and outpatient professional health care provider services; (3) diagnostic imaging, laboratory services, and other diagnostic and evaluative services; (4) medical equipment, appliances, and assistive technology, including prosthetics, eyeglasses, and hearing aids, their repair, technical support, and customization needed for individual use; (5) inpatient and outpatient rehabilitative care; (6) emergency care services; (7) emergency transportation; (8) necessary transportation for health care services for persons with disabilities or who may qualify as low income; (9) child and adult immunizations and preventive care; (10) health and wellness education; (11) hospice care; (12) care in a skilled nursing facility; (13) home health care including health care provided in an assisted living facility; (14) mental health services; (15) substance abuse treatment; (16) dental care; (17) vision care; (18) hearing care; (19) prescription drugs; (20) podiatric care; (21) chiropractic care; (22) acupuncture; (23) therapies which are shown by the National Institutes of Health National Center for Complementary and Integrative Health to be safe and effective; (24) blood and blood products; (25) dialysis; (26) adult day care; (27) rehabilitative and habilitative services; (28) ancillary health care or social services previously covered by Minnesota’s public
health programs; (29) case management and care coordination; (30) language interpretation and translation for health care services, including sign language and Braille or other services needed for individuals with communication barriers; and (31) those health care and long-term supportive services currently covered under Minnesota Statutes 2016, chapter 256B, for persons on medical assistance, including home and community-based waivered services under chapter 256B.”

Prof. John Spry wrote this article about the Minnesota Health Plan. FYI- Prof. Spry is considered by may to be the best tax economist in Minnesota. He’s served on tax reform boards in the past. Here’s what Prof. Spry wrote about the MHP:

Minnesota Democrats have a plan to create a statewide single-payer health plan funded with state taxes, without lawmakers voting for tax hikes. Minnesota Democrats’ legislation would give an appointed Minnesota Health Board the unlimited power to tax. This unelected board would run the entire health care system in Minnesota with both tax and spending authority. This unelected board would enact the massive tax hikes that Democratic legislators are unwilling to support publicly.

Article IV deals with the Plan’s funding. Here’s the language from the actual bill:

Subdivision 1. General provisions. (a) The board shall establish a Minnesota Health Fund to implement the Minnesota Health Plan and to receive premiums and other sources of revenue. The fund shall be administered by a director appointed by the Minnesota Health Board.
(b) All money collected, received, and transferred according to this chapter shall be deposited in the Minnesota Health Fund.
(c) Money deposited in the Minnesota Health Fund shall be used to finance the Minnesota Health Plan.
(d) All claims for health care services rendered shall be made to the Minnesota Health Fund.
(e) All payments made for health care services shall be disbursed from the Minnesota Health Fund.
(f) Premiums and other revenues collected each year must be sufficient to cover that year’s projected costs.

In other words, if the premiums and other revenues aren’t sufficient “to cover that year’s projected costs”, the unelected board has the authority to raise taxes to cover that year’s projected costs. According to this bill’s language, they don’t need to go to the legislature to raise taxes. This panel would have the authority to raise taxes on its own! Think about that a minute.

Prof. Spry then said this:

This legislation stands in opposition to the Minnesota Constitution. The Minnesota Constitution proclaims that all political power is inherent in the people. It provides for the regular election of public officials in the legislative, executive, and judicial divisions. It is democratic and good that legislators and the governor are accountable to the people at the next election.

More on this in Part II.

After reading this op-ed, honest people would be skeptical of anything Democrats say.

In this op-ed, Cheri Bustos, Hakeem Jeffries and David Cicilline write “For the past two years, Republicans have had total control over the House, the Senate and the White House. What do they have to show for their leadership? A tax scam that pads the pockets of millionaires and billionaires at the expense of the middle class. Skyrocketing health care costs and prescription drug prices that are forcing millions of Americans deep into debt. A culture of corruption in Washington that’s so far-reaching it’s putting our entire democracy at risk. A nation that is growing more divided and more cynical – and a politics more chaotic and exhausting – with each passing day.”

While Americans feel better with extra money in their wallets, Democrats insist that the Trump/GOP tax cuts are a scam. How is that different than what Nancy Pelosi said?

How are the tax cuts coming “at the expense of the middle class”? Is their explanation that this money isn’t being “invested” in the future? If that’s the Democrats’ explanation, then they’re the ones scamming people.

As for “skyrocketing health care costs and prescription drug prices”, Minnesota’s premiums are coming down. Further, thanks to President Trump, consumers have more choices in terms of types of policies they can buy. They don’t have to buy the policies that the government orders them to buy. Consumers actually get to make real choices.

Finally, Democrats are being little drama queens when they insist that Trump is destroying our democracy. Here’s a question that voters should ask themselves: What can the Democrats do that Republicans aren’t already doing well? Under unified GOP government, incomes are rising, consumer confidence and small business confidence is shooting through the roof, durable good orders are skyrocketing. Will Democrats improve on any of those things?

I’m betting that they won’t. In fact, I’m betting that they’ll fail. Why risk the success we’re already experiencing?

There’s a penalty Minnesotans are paying for electing divided government. That penalty comes in the form of higher taxes, more intrusive regulations and a regulatory structure that gives special interests too many bites at the proverbial apple.

When the DFL ran St. Paul in 2013-14, they rammed huge tax and spending increases down our throats. That’s when Minnesota became less competitive in terms of business environment. The truth is that Minnesota has an outmigration of wealth and talent for years. It isn’t just retirees, either, moving to warmer climates. It’s young people moving to other states to start businesses where taxes and regulations aren’t oppressive.

The regulatory regime isn’t the same as the regulations. For PolyMet to start operations, they have to get approval from the DNR, MPCA, the Department of Health, the Board of Water and Soil Resources (BOWSR), the Public Utilities Commission in addition to local watershed districts and other regulators. It isn’t surprising that people — and wealth are leaving.

This is an organizational chart of Minnesota’s executive branch:

Within the executive branch, there are close to 2 dozen regulatory agencies. They include the MPCA, BOWSR, the DNR, Department of Health, Met Council, the Public Utilities Commission, the Board on Environmental Quality, the State Climatology Office, the Department of Commerce, the Board of Energy, the Minnesota Forest Resources Council, the Minnesota Geological Survey, the Minnesota Indian Affairs Council, the Office of Energy Security, the Office of Pipeline Safety, just to name a few.

The point is that the DFL has controlled at least one part of government my entire adult life. It has created a convoluted system of government that’s stuck in the Twentieth Century. The DFL insists on maintaining a mainframe government in an iPad world.

Gov. Dayton and then-Lt. Gov. Tina Smith ignored welfare fraud, elder care abuse and overseen IT disasters like MNsure and MNLARS. When the DFL had majorities in the House and Senate and Gov. Dayton was governor, they raised taxes and raised the state minimum wage, then indexed it to inflation. Further, the DFL hasn’t reformed anything like the IRRRB or the Met Council in forever. They’ve participated in scandals like the Action Minneapolis rip-off, too.

Considering all those things, I can’t justify why they should hold any levers of power in St. Paul.

Steve Rattner “served as lead adviser to the Presidential Task Force on the Auto Industry in 2009 for the Obama administration.” This morning, the racist NYTimes published Rattner’s op-ed, which is simply a continuation of President Obama’s attempt to lie about the success of President Obama’s economic policies.

In President Obama’s attempt to spin his policies, he’s either forced to lying outright or he’s too unwilling to admit that his policies failed. Prior to serving in the Obama administration, Rattner “was a managing principal of the Quadrangle Group, a private equity investment firm that specialized in the media and communications industries. Prior to co-founding Quadrangle, he was an investment banker at Lehman Brothers, Morgan Stanley, and Lazard Freres & Co., where he rose to deputy chairman and deputy chief executive officer.” But I digress.

In his op-ed, Rattner wrote that “For the second consecutive Friday, the Trump administration had an opportunity to point to fresh data that supposedly demonstrates the strong boost the president’s policies have given to the nation’s economy. Last week, news that the gross domestic product expanded at a 4.1 percent rate in the second quarter occasioned a presidential appearance on the south lawn of the White House. Friday’s announcement that 157,000 new jobs were added in July was marked more modestly, with a statement from the White House.”

Let’s be clear about something. There’s no disputing the fact that the economy is stronger than it was during the Obama administration. The energy sector is booming. Manufacturing is the strongest it’s been in a generation. Unemployment in minority communities is the lowest it’s been in history. Literally trillions of dollars are flooding into the United States now that the Obama tax disaster has been repealed and replaced with the Trump/GOP tax cuts. Business investments are increasing nicely.

Yes, the economy is continuing to expand nicely, which all Americans should celebrate. But no, there’s nothing remarkable in the overall results since Mr. Trump took office. Most importantly, there is little evidence that the president’s policies have meaningfully improved the fortunes of those “forgotten” Americans who elected him.

Nancy Pelosi called the tax cuts “crumbs.”

This is Rattner’s more elegant way of saying that the Trump economy is delivering crumbs to the American people. Tell that to these people:

According to the workers at Granite City Works, President Trump’s policies aren’t just providing jobs after the plant was idled on President Obama’s watch. It’s that those workers said that Granite City, IL is getting rebuilt one neighborhood, one family at a time.

Yes, Mr. Rattner, there were far too many people forgotten by President Obama’s policies. If you weren’t part of the well-connected crowd, you didn’t share in the prosperity. If you didn’t work in one of the industries that President Obama picked as a winner, you were in tough shape. Those forgotten workers aren’t forgotten anymore.

The dishonesty of people like Mr. Rattner and other Obama administration spinmeisters is disgusting. President Obama himself said that he planned on shutting down the coal industry. President Obama said that tons of jobs weren’t coming back. He’s right in once sense. Those jobs wouldn’t have come back with his disastrous tax and regulatory policies. Now that those policies have been replaced by pro-growth economic policies, things have gotten consistently better.

As a result, consumer confidence is sky-high and the economy is robust again. How do I know? I know by the amount of traffic on the highways heading out on vacation. This Friday, the traffic on Highway 10 (at 11:00 am, I might add) was bumper-to-bumper. I never saw that during the Obama administration.

That’s because people have money in their pockets to spend again. The behavior of the American people is dramatically different. That’s reflected in the consumer confidence numbers.

No amount of Obama administration spin will change that.

This Duluth News Tribune editorial endorses Tim Pawlenty as the Republicans’ best shot at retaking the governorship. Normally, endorsements don’t mean that much but I think this one matters. It isn’t because I think the endorsement itself is that impactful. I think it’s impactful because Tim Pawlenty was given the time and space to explain why he’s running. In my estimation, he made the most of that opportunity.

In the editorial, Gov. Pawlenty said “People criticize me for, ‘You held the line on this’ or, ‘You cut that.’ You bet I did. When you’re in a near depression and government’s budgets have contracted, the answer isn’t to go out to the taxpayers and say, ‘We need to raise your taxes.’ We had to tighten the government’s belt, just like every family did, just like every house did.”

In my estimation, that response was what you’d expect from the adult in the room. It didn’t stop there, though. After that, Gov. Pawlenty stated “I’m 57 years old, I have no other political ambitions. I’m not running for any national office. I’m coming back to try to run for governor not because I need the title; I already have it. And I don’t need to go to sit in the office; I’ve already done that for eight years,” said Pawlenty, governor from 2003 to 2011 and a Republican presidential candidate in 2012. “I’m coming back for one reason, which is to get things done for my state and for the state that I love. And I think that at this point we need somebody who is strong enough and experienced enough and, frankly, willing to embrace enough risk to bridge the (political) divides. I am in the best position in this race to do that.”

The difference between Gov. Pawlenty then and the conditions he’d walk into now are dramatic. When he first won the office, he inherited a $4.2 billion projected deficit from Jesse Ventura and a terrible economy. This time around, he’ll walk in at a time when the US economy is hitting on all cylinders. Thanks to that robust economy, Gov. Pawlenty will have the chance to reform the tax system that Gov. Dayton created.

What does Pawlenty want to do if elected again? He wants to slow down health insurance premium increases and maybe even reduce them. He wants to provide tax relief to middle- and modest-income Minnesotans, including by getting rid of Minnesota’s rare tax on Social Security benefits. And he wants to modernize and improve Minnesota schools and the state’s educational system to finally close the achievement gap and to help meet growing workforce needs.

Tim Pawlenty is the best choice to lead the Republican Party of Minnesota. He’s got universal name recognition. He’s got the funding network that’ll be needed to fight off the DFL candidate. Most importantly, he’s got a reform-minded substantive agenda that conservatives can rally around.

Jeff Johnson is touting the issues he wants to run on. That’s admirable. He’d be a fine governor if he got elected. The thing is, though, that he’d have a difficult time getting elected. You can’t govern if you don’t get elected.

Republicans have a fantastic opportunity to reform Minnesota’s economy. To do that, though, we need unified Republican control of St. Paul. We can’t get there with Jeff Johnson. He’s already lost 2 statewide races. I’m not willing to bet that the third time is the charm. There’s too much at stake to entrust to a 2-time loser.

Tim Pawlenty wants to focus on accomplishing sensible things. That’s been out of style the past 8 years in St. Paul. Here’s what I’m talking about:

This LTE criticizes Sen. Schumer’s ‘forgetfulness’. That’s noteworthy but it isn’t the most distressing news for Democrats. The most distressing news is that it was written by a Democrat.

It opens by saying “Sen. Chuck Schumer’s plea for financial support from Democratic New York State Assemblyman Dov Hikind may have answered a question recently proposed by both Schumer and the Watch commentator Allison Perry. Allison challenged any supporter of President Trump to provide information “as to any way in which Donald Trump has improved your lives or this country.” And Schumer, in asking for contributions, got an earful.”

A couple paragraphs later, the LTE said “You forgot to tell us about unemployment, which is lower than it has been in decades, while economic confidence is at a 17-year high. It’s also at a record low for minorities. That’s very good news, Senator. You forgot to tell us how the U.S. is beginning to emerge in energy dominance. The Department of Interior, which has led the way in cutting regulations, opened plans to lease 77 million acres in the Gulf of Mexico for oil and gas drilling, decreasing our reliance on foreign oil. That’s very good news, Senator.”

Read the entire LTE. Every GOP candidate should commit to memory each of these statistics. Lately, Democrats have started testing a talking point that goes something like this: ‘yes, the economy is good but we don’t know if it’s helping everyone. We don’t know that everyone is feeling the recovery.’

That’s BS. If people weren’t feeling the effects of the Trump/GOP economic policies, consumer confidence wouldn’t be sky-high. Business investment wouldn’t be happening at the high rate that it’s happening. If the economy was in tough shape, people wouldn’t be returning to the workforce in an attempt to find a job. Optimism is increasing. Pessimism is shrinking.

Those things didn’t happen during the Obama administration. They’re happening now, though.

The Democrats aren’t happy with Sen. Schumer:

For all the talk about a blue wave, the truth is that Democrats are a divided political party.