Archive for the ‘Reforms’ Category

If any paragraph written establishes as fact that tax simplification is needed, it’s found in this article. Specifically, the paragraph that says “To finance a 15 percent cut in the corporate tax rate, House Republicans have already signed on to revenue-generating measures that would weaken the real-estate market, hurt orphans, disadvantage the disabled, hobble research on cures for rare diseases, make it harder for veterans to find jobs, soak upper-middle-class voters in blue states — and, thereby, put their caucus’s most vulnerable members at grave political risk.”

Predictably, every DC lobbyist is whining about their special carve-outs getting eliminated. The lobbyists’ goal is to portray each deduction as essential to the health of that specific industry. In 1986, most of the tax code’s deductions were stripped away. Not only didn’t the economy falter, the economy kept chugging along.

Think of this hysteria as a Chicken Little defense.

This is a bit deceptive:

According to the JCT, if the Republican plan passes, one-fifth of American households will pay higher taxes in 2027. While more middle-class families would be helped than hurt by the GOP plan, the fact that any will wind up forking over more money to Uncle Sam, while the super rich and corporate America collect trillions in benefits, is a political migraine for Trump & Co.

If the bill is passed using reconciliation, the tax cuts expire in 2026. The chances of those tax cuts being allowed to expire isn’t nothing but the chances aren’t exactly high, either.

There is one way around this impasse. Republicans could make the House plan better for the middle class, and easier on the deficit, at the same time, if they’d only scale back their $2 trillion giveaway to corporate America.

Thanks to the Obama tax increase, there’s now over $4,000,000,000,000 in profits sitting overseas rather than being invested here in the United States. Fairness sounds nice but it’s the best way to quiet the US economy. The Obama administration was famous for economic silence. We don’t want a replay of those years. The quack that wrote the base article is hysterical, not credible. The expert in this video is credible:

If there’s a message coming from Newt Gingrich’s op-ed, it’s that Republicans must put together a compelling message to pass the Tax Cuts and Jobs Act. Gingrich reminds Republicans that “passing serious legislation is very hard work. There is still a great deal to do, and the timeline is incredibly tight”, adding that “The Joint Committee on Taxation has already provided preliminary analysis for the bill. Its estimates are static and assume tax cuts will have no impact on growth. As a result of this bad assumption, the JCT incorrectly estimates the bill would create a significant budget shortfall, $1.43 trillion over 10 years.”

Gingrich continued, saying “The truth is, our gross domestic product is growing at 3 percent, largely due to deregulatory efforts by the Trump administration and the expectation of tax cuts. Passage of the Tax Cuts and Jobs Act would further spur GDP growth, so the bill should be scored dynamically. The Tax Foundation has made dynamic estimates on the Tax Cuts and Jobs Act, which show the bill would ‘significantly lower marginal tax rates and the cost of capital, which would lead to 3.9 percent higher GDP over the long term, 3.1 percent higher wages, and an additional 975,000 full-time equivalent jobs.’ This economic growth would raise federal revenues by nearly $1 trillion over 10 years, according to the Tax Foundation. In the end, this new revenue could bring the bill close to neutral, depending on what baseline is used to score it.”

Let’s get serious about something. The Tax Cuts and Jobs Act will speed up the economy. That’s indisputable even though Nancy Pelosi insisted in this speech that it would kill jobs. Ms. Pelosi has told lots of whoppers in the past. This is another whopper. Republicans seem interested in self-destruction.

Sen. Lankford has announced his opposition to it because it supposedly increases the deficit. Here’s a simple question for Sen. Lankford. If Republicans fail to pass this bill, what’s the likelihood they’ll have to vote on a Democrat budget that would hurt job creation and economic growth? What’s the likelihood that a Democrat budget would increase the deficit more than this bill would?

The Tax Cuts and Jobs Act isn’t perfect but it’s definitely a step in the right direction. There’s economic growth happening right now. This isn’t just the right time to pass tax cuts. It’s the best time to pass the Tax Cuts and Jobs Act.

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This USA Today Our View editorial is biased and unworthy of serious consideration. That said, it’s instructive of what Republicans will have to fight.

For instance, the editorial says “The measure’s cut in the corporate income tax rate from 35% to 20%, for example, could boost the economy. And its limit on the interest deduction for new mortgages has angered the powerful homebuilding and Realtor lobbies, which suggests that its drafters might be doing something right. But by the standards of President Reagan’s landmark 1986 tax reform, this plan is a major disappointment. It lacks fiscal discipline, is needlessly indulgent of the wealthy, and is purposely punitive to universities, college students and people who live in high-tax states. Taken as a whole, this plan is partisan, even petty.”

Let’s examine that. It isn’t that cutting “the corporate income tax rate from 35% to 20%” might boost the economy. Cutting that tax rate will boost the economy. The DJIA is chomping at the bit waiting for that tax rate cut. If it becomes reality, expect companies to invest that extra capital into hiring extra R & D personnel. Expect small businesses to buy new equipment, which, in turn, will strengthen the manufacturing sector and durable goods orders.

With consumer confidence shooting through the roof, it likely wouldn’t take much to get the economy roaring. It’s disappointing, though predictable, for the editorial to say that the tax plan “is needlessly indulgent of the wealthy.” President Reagan was fond of saying that it’s impossible to be pro-jobs and anti-employer. The first Reagan tax cuts were on capital gains with the intent on getting Detroit back on its feet. It worked magnificently. Then there’s this:

Preliminary estimates are that it would increase deficits by $1.5 trillion over 10 years. To put that in perspective, an only slightly different cast of GOP lawmakers screamed bloody murder in 2009 over an Obama economic stimulus plan half that size. Republicans were deficit hawks then. Now, not so much.

I wrote about the stimulus back in the day. It just threw money at people. Republicans predicted that it wouldn’t spur the economy. The Republicans’ predictions were right. Further, Republicans argued that the Obama stimulus was nothing but pork. They were right. It’s foolish to argue that the Republicans’ Tax Cuts and Jobs Act is nothing but pork and special favors. Predictably, though, that’s what the Democrats are doing.

Finally, saying that “an only slightly different cast of GOP lawmakers screamed bloody murder in 2009 over an Obama economic stimulus” is mathematically insulting. There were 178 Republicans in the House in 2009. There are 239 Republicans in the House as of Oct. 21. That’s a difference of 61 Republicans in the House. I wouldn’t call that a “slightly different cast of GOP lawmakers.”

Then there’s this BS:

The biggest flaw in the GOP plan is that, for all the rhetoric about helping the middle class, it is tilted toward the wealthy. Benefits for the rich include:

Termination of the tax on inherited wealth, a priority of wealthy GOP donors but not many other Americans. Immediately upon passage, estates of up to $22 million could be passed on to heirs tax-free. After six years, estates of any size could be passed on tax-free. Over a decade, this change alone would drain $172 billion from the Treasury.

The wealth that’s been accumulated in these estates has been taxed already. It’s been taxed at a high rate, too. There’s nothing moral about the government taxing estates twice.

Further, this doesn’t benefit the wealthy. People like the Gates family, the Clinton family or the Dayton family create foundations to shelter their wealth. Family farmers would benefit from this. Small business owners would benefit, too.

In the first 4 parts of this series (found here, here, here and here), I focused on different facets of the inadequacies of the Dayton-Rothman Commerce Department. I categorized each of the shortcomings and culprits. Most importantly, I identified the opportunities that the Dayton-Rothman Commerce Department missed and why.

This article will pull everything together so we can put together a less hostile, more business-friendly set of policies that doesn’t sacrifice the environment. First, we’ll need to streamline the regulatory review process so hostile environmental activists don’t have multiple opportunities to throttle key infrastructure projects. Whether we’re talking about killing the Sandpiper Pipeline project, the constant attempts by the Sierra Club, Conservation Minnesota and Northeastern Minnesotans for Wilderness to kill both the Twin Metals and the PolyMet projects or the Public Utilities Commission and the Dayton-Rothman Commerce Department, it’s clear that the DFL is openly hostile to major infrastructure projects.

It’s long past time to get the PUC out of the public safety/transportation business. Similarly, it’s time to get the Commerce Department out of the environmental regulatory industry. Public safety and transportation belong in MnDOT’s purview, not the PUC’s. Environmental regulations need to be significantly streamlined, then shipped over to the DNR. There should be a period for fact-finding and public comment. There should be the submitting and approval/disapproval of an Environmental Impact Statement and the submitting and approval/disapproval of an Economic Impact Statement.

Further, laws should be changed so that there’s no longer a requirement to submit an application for a “certificate of need.” In effect, that’s a bureaucratic regulatory veto of major infrastructure projects. That isn’t acceptable. There should be a time limit placed on the bureaucrats, too. They should have to accept or reject applications within a reasonable period of time. That’s because regulators have sometimes used delaying tactics to throttle projects without leaving a paper trail. It’s also been used to deny companies the right to appeal rulings. (If there isn’t a ruling, there isn’t an appeal.)

Third, streamlining the review process limits the opportunities for environmental activists to kill projects like those mentioned above. There’s a reason why it’s called the Commerce Department, not the Department of Endless Delays and Excessive Costs, which is what it’s become. Eliminating the PUC’s oversight responsibilities, especially in terms of approving certificates of need, will eliminate the impact that environmental activists serving on that Board can have in killing or at least delaying major infrastructure projects.

Fourth, it’s important that we bring clarity and consistency to this state’s regulatory regime. The system Minnesota has now breeds uncertainty. That steals jobs from Minnesota because companies attempt to avoid Minnesota entirely whenever possible. While we want to preserve our lakes, rivers and streams, we want to preserve our middle class, too. The environment shouldn’t be put on a pedestal while communities die thanks to a dying middle class.

I’ve seen too often how once-proud parts of Minnesota that have a heavy regulatory burden have seen their middle class essentially disappear. Cities like Virginia and Eveleth come to mind. It’s immoral to give a Twin Cities agency the authority to kill Iron Range communities. That’s literally what’s happening right now.

For the last 7 years, Gov. Dayton has run an administration that’s of, by and for the environmental activist wing of the DFL. If you work in a construction union, you haven’t had a great run. That isn’t right. People who work hard and play by the rules should be able to put a roof over their family’s head, set money aside for their kids’ college education and save for their retirement. For far too many people, that hasn’t happened recently.

The next Republican governor should implement these changes ASAP. It’s time to destroy the Dayton ‘Hostile to business’ sign and replace it with an ‘Open for business’ sign. It’s time to get Minnesota government working for everyone once again.

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This op-ed is a fantastic illustration of what DFL regulatory corruption looks like. Every voter in Minnesota should understand what’s happening by DFL special interest groups in the hope of killing mining.

In the op-ed, Steve Giorgi, the executive director of the Range Association of Municipalities & Schools, aka RAMS, wrote “Commissioner John Linc Stine and his staff at the Minnesota Pollution Control Agency (MPCA) announced this week that they will commence with rulemaking hearings across the state on the new proposed rules for limits on Sulfate standards to protect wild rice.” Later in the op-ed, Giorgi wrote “During the last legislative session, Rep. Rob Ecklund was successful in passing legislation that delayed the implementation of any new wild rice/sulfate standards until January of 2019, allowing the MPCA and all Minnesotans to get the results of a study being conducted on the cost implications of a new standard and enforcement of that standard.”

This is what a corrupt regulatory system looks like. The business getting regulated has no assurance that they’ll get the required permits if they follow the stated procedures. (Whatever happened to Bill Clinton’s saying that “if you work hard and play by the rules, you’ll be rewarded with a good life for yourself and a better chance for your children“?) Based on the Dayton administration’s actions, the hard-working people of the Iron Range will get shafted even if they work hard and play by the rules. Then there’s this:

Finding funding for $5 to $10 million dollar treatment plant expansions, along with increased annual operating costs, and then the nightmare of trying to dispose of the brine that is produced by the reverse osmosis treatment, will put most small communities into bankruptcy.

At what point will this DFL administration admit that the regulations they’re thinking about will bankrupt the state? The law was passed and signed into law. PolyMet will be forced by law into playing by the rules. Unless the metro DFL wants to just admit that they want to stop mining altogether, which they’ll deny in public but admit to in private, this regulatory system needs to be scrapped.

I’m not talking about abolishing all regulations. I’m advocating for regulations that protect the water without buying the special interests’ BS. This video is intended to present the MPCA, the regulators on the wild rice standards, as reasonable and business-friendly: That’s intentional. The key difference between the Grede project and the wild rice standards is that the special interests don’t care about Grede. They’re focused on shutting down mining.

It’s indisputable that the metro DFL, especially politicians like John Marty and Al Franken, want to prevent new mining projects from getting permitted. It’s time to throw out the current regulatory system and replace it with a system that’s both business-friendly and that protects the environment. There’s no disputing the fact that the current system is hostile to both businesses and rural Minnesota.

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Friday night during the Almanac Roundtable segment, DFL activist Abou Amara insisted that the legislature had frequently reformed the Met Council. When I heard that, I replayed that part of the segment (I always DVR it) to make sure I heard it correctly. Indeed I’d heard it correctly. Simply put, Amara’s contribution to that part of the roundtable was BS. The legislature has changed the Met Council’s responsibilities frequently but it hasn’t reformed it.

Let’s think of it this way. Each legislator, each city councilmember, each county commissioner and each school board member have hundreds, if not thousands of constituents. The Met Council has a single constituent — the governor. They don’t have to listen to members of the metro city councils, the Hennepin County commissioners and they especially don’t have to listen to the residents of the 7-county metro area. If they decide to ignore the city council, it doesn’t matter as long as they do what their constituent wants them to do.

Another part of Amara’s argument to keep the Met Council around is because there’s a need for long-term planning. That’s a fair point but it doesn’t prove that the Met Council is needed to accomplish that task. In fact, it’s proof that it isn’t needed. Governing bodies that aren’t accountable to people shouldn’t have any authority. The Met Council under Gov. Dayton is a patronage position.

Kathy Kersten’s column nails it in terms of the Met Council’s mentality:

“The people designing your city don’t care what you want.” That’s how forbes.com columnist Joel Kotkin sums up the mentality of today’s so-called “smart growth” urban planners. Here in the Twin Cities, we have a perfect example of what Kotkin is warning about: “Thrive MSP 2040,” the Metropolitan Council’s 30-year development framework for our seven-county metro area.

Here’s something else worth thinking about when thinking whether the Met Council needs a transformation. First, let’s start by noticing that Amara thinks we need to keep long-term planning out of the hands of “people who face election once every 2 or 4 years.” Question: where does Amara think we’d find these long-term planners? Are they ‘experts’ in their field? If they’re experts in their field, would that lead them to not listen to the residents of the seven-county metro? Would they only listen to like-minded advocates and lobbyists?

That’s what’s happening now. The Met Council isn’t listening to people in Prior Lake, Eden Prairie, Maplewood, Woodbury, Plymouth, et al. They have the authority to raise taxes. They don’t face the voters. Ever. That’s the worst possible system imaginable.

The truth is that Abou Amara isn’t telling the truth. The Met Council hasn’t undergone positive change except if you think mission creep is positive change. The Republican gubernatorial candidate that puts together a thoughtful plan that puts the people in charge of the Council will have a positive platform to tout to voters. It’s time to straighten this corrupt system out.

After reading this article, it’s clear that the DFL’s regulatory system is screwed up almost beyond fixing. The only way Minnesota’s regulatory system can be fixed is if Republicans have majorities in the House and Senate and there’s a Republican governor. (Hopefully, that’ll happen in 2018.)

The reason for writing this is because Minnesota Power has decided to build a 550-megawatt natural gas power plant in Superior, WI. Officially, Julie Pierce, Minnesota Power vice president of strategy and planning, said that the reason for this was “It’s really about giving customers affordable, reliable, less carbon-intensive energy. What we’re doing with this is bringing in flexible generation … to back us up.” The real reason for this decision is to avoid Minnesota’s regulatory system, starting with the Minnesota Public Utilities Commission.

According to the article, the power plant will be called the “Nemadji Trail Energy Center.” Further, “Minnesota Power will split the cost and ownership of the natural gas plant with Dairyland Power Cooperative.” Finally, the “550-megawatt plant, to be located near the Calumet refinery, will employ up to 25 people long-term.”

Speaker Kurt Daudt issued this statement after getting the news:

Republicans want Minnesota Power made in Minnesota—not forced to relocate to Wisconsin. It’s unfortunate that once again, Democrats’ resistance to improving our regulatory process has resulted in Minnesota families losing out on hundreds of good-paying jobs and millions in private investment. One of our top priorities next session should be putting Minnesota jobs first and overhauling our regulatory process so we can protect our environment without losing major opportunities for economic growth.

Gov. Dayton and the DFL haven’t put a high priority on job creation. They’ve stood in the way of good-paying jobs, especially in the mining and construction fields.

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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After Donald Trump’s victory, there’s been a noticeable outbreak of bipartisanship from red-state Democratic senators.

For instance, “North Dakota Sen. Heidi Heitkamp (D-N.D.) is ready to work with Republicans on legislation to invest in ‘clean coal’ technologies. More broadly, she says she’s willing to work across the aisle on regulatory reform. ‘My priority is standing up for North Dakota, not party politics. The reason I’m in the U.S. Senate is to work with Republicans and Democrats to get things done,’ she told The Hill in a statement.”

Meanwhile, “Sen. Jon Tester (D-Mont.) hopes to work with Republicans to reduce the deficit, clean up Washington by stopping former lawmakers from becoming lobbyists and passing legislation to improve service at the Department of Veterans Affairs, a major Trump talking point during the campaign.”

Before you think the Democratic Party has changed into a principled political party, don’t. There’s an explanation for their sudden ‘appreciation’ for bipartisanship:

While outgoing Senate Democratic Leader Harry Reid (Nev.) didn’t want Democrats to work with vulnerable Republicans ahead of the 2016 elections, his heir apparent Sen. Charles Schumer (D-N.Y.) is signaling a willingness to let his members do what they need to do to survive in the next Congress.

TRANSLATION: Sen. Schumer has seen the 2018 electoral map. It frightens him. He’s willing to momentarily retreat if it’ll prevent a bloodbath for Senate Democrats.

The thing for Republicans to highlight is whether this cooperation leads to bills getting to President Trump’s desk for his signature. If Sen. Tester works with President Trump on the deficit but doesn’t work with Sen. Heitkamp on regulatory reform and on repealing Obamacare, then we know that Democrats are playing procedural games.

The litmus test for Republicans should be whether Democrats will work with President Trump on Obamacare’s replacement. If there aren’t blocks of Democrats willing to repeal and replace the ACA, then it’ll be clear that Democrats aren’t really interested in productive bipartisanship.

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Thursday, Senate Republicans voted to make Paul Gazelka the new Senate Majority Leader for the 2017-18 session. At his press conference after the vote, Sen. Gazelka said that “the Republican agenda for the 2017 session with include reduced government spending, tax relief and reduced healthcare costs.”

There’s certainly a mandate to fix MNsure and Minnesota’s health care system. Health insurance premiums have gone through the roof. Access is getting more limited each year. Options are dwindling each year, too. It’s worth noting that House and Senate Republicans ran on fixing MNsure and on skyrocketing health insurance premiums.

According to this article, Sen. Gazelka understands the situation they’re in, saying “We’re going to have to figure out a way to work together at some level. We’re going to work with the governor. We’re going to work with the House and we’re going to do good things for Minnesota.” It doesn’t take Nostradamus to predict that Gov. Dayton will pick lots of fights with Republicans.

Last year, when there was a DFL majority in the Senate, Gov. Dayton still threw a hissy fit pretty much each week. He campaigned hard for an all-DFL legislature, saying that was the only way they’d get things done, which I wrote about here, here, and here. It isn’t just that Gov. Dayton didn’t get an all-DFL legislature. It’s that Minnesotans gave us GOP majorities in the House and Senate.

This is the video of the Senate GOP announcement of Sen. Gazelka getting elected as the Senate Majority Leader-elect: