Agonizing over #1
One of the reasons I was invited here was because I'm a state legislator here in Minnesota. This week we have the distinct privilege to have our governor, Mark Dayton, propose to balance a $6.2 billion deficit (atop a base of about $32b in revenues) by a new fourth tier on the income tax at 10.95%. He had said so during the campaign, so that came as no surprise. But he had been told repeatedly during the campaign that the measure would not raise even $2b. He had a grab bag of other tax increases, but none finished the job.
He had said the the rate would be10.95%, third highest in the nation; Hawaii and Oregon tax income at 11%. Surely, he could not go higher. He wouldn't give us the highest rate in the nation, would he?
He did. The top rate will in fact be 13.95% -- but only for three years. A temporary tax, with a "blink-off" provision. (Let's recall now the famous Milton Friedman quote: There's nothing so permanent as a temporary government program.)
It would be fun here to simply rail about a governor who proposes more than $4 of tax increases for every $1 in spending reductions (more, actually, given some other spending increases he has elsewhere.) It would be fun to note that he gives successful Minnesota businesses that 3% back just as he might prepare to run for re-election. But what amuses me greatly tonight is the imagery of a courageous man that had to make this bold choice. Over the subhead "Hours of Anguish", our very own StarTribune tells us:
In an interview as he flew around the state, Dayton said he anguished over the budget details, spending hours poring over the numbers line by line.
The plan would slingshot Minnesota into the nation's top tax rate for the wealthy, something Dayton said he wanted to avoid.
But, he said, an "act of budget desperation" led him to propose a three-year, 3 percent income tax surcharge on people making more than $500,000 a year. "It was the last resort. It was not the first resort," Dayton said.
The seed of that idea, he said, may have sprouted after a December lunch with former Gov. Al Quie, who adopted a similar "blink-on" tax surcharge in the early 1980s. It firmed up one recent night, while Dayton was alone in the governor's residence, boxes still unpacked.
He was determined to keep his promise to increase education funding and still avoid cuts he found intolerable.
One idea floated earlier would have ended a small program that helps people with mental disabilities live in group homes, moving them into institutions.
"I just said: 'No. We are not going to go there,'" Dayton said, recalling his autistic nephew and the "miracle" that has to happen for disabled people to live independently.
It is one thing to ask someone to pay for your desire to give someone else benefits. It's another thing to threaten another with the loss of their liberty if they do not fulfill your desire, though that is in fact what we do when we ask someone to pay taxes to support government services. It's simply part of society today, and even to write my previous sentence is seen by some as being the act of an anti-social mentality.
But you have to ask the governor this question: What anguish? Whose desperation?
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Nov '10
Re: Agonizing over #1
The new tax rate may not raise any additional revenue as business lays off mor workers, people move away or take other measures to protect themselves. In fact, reducing the current rate might raise more revenue by stimulating more economic activity.
Cutting spending is just never an option, is it?
Dec '10
Re: Agonizing over #1
Other than wild rice, is there any industry in your state that can't simply relocate to more fiscally friendly climes?
May '10
Re: Agonizing over #1
Dear Creative Memories: leave MN. I bet I can find you a nice spot for a warehouse in North Georgia.
Re: Agonizing over #1
I don't know that we're on the wrong side of the Laffer Hill yet, though 13.95% might put us there. But the wealthy have options on when and how to take income that others don't. The Twin Cities liberal will never admit this is true, and the disincentive effects are always denied.
The 10.95% rate is actually worse. The $150k limit for families at 10.95% could be two 15-year teachers who own a piece of rental property here; they won't move, and worse they probably voted for Dayton. It will only vaguely occur to them when writing the check to our Dept of Revenue that the tax increase is part of it. More likely, they'll blame the man for keeping them down, while their yard is festooned with a "Happy to Pay More for a Better Minnesota" sign they got from their union.
Dec '10
Re: Agonizing over #1
From the title I thought you were talking about urination.Thank goodness I was wrong.
Edited on Feb 17, 2011 at 6:00amAug '10
Re: Agonizing over #1
Ah yes, Mark Dayton, (unfortunately not) the last of the big spenders.
How this guy got elected in a year when both houses of the MN legislature went Republican is beyond me. I actually attribute it to 3 factors:
The good news is that there is no way Dayton gets his tax wet dream passed the aforementioned legislature.
Re: Agonizing over #1
For some reason this passage irks me:
Why can't Governor Dayton provide for his autistic nephew's financial needs using his own funds? Are Minnesota governors required to take a vow of poverty nowadays?
Jul '10
Re: Agonizing over #1
There is something seriously wrong with a state where the vote of convicts in a narrow election puts Al Franken into the Senate and this big-government dinosaur gets elected to the governor's mansion.
Oct '10
Re: Agonizing over #1
Of course there is no cost to abandoning the Judeo-Christian ethic. Now that the concept of charity, voluntarily doing for others what they themselves cannot do, we simply tax others to do it.
Don't you love a nice civilized non-judgmental culture? And there is no cost to keeping God out of our culture. None at all.