April 25-27, 2009
Apr 25 09:28 Tarryl's Push-Polling (And Other Interesting Items) Apr 25 09:38 Andy's Right Apr 25 13:39 Gov. Pawlenty's Letter, the DFL's Tax Problem Apr 26 05:40 President Obama's War Apr 26 06:44 So Far, So Good? Apr 27 01:47 It's the Priorities Stupid Apr 27 02:59 Tax Reform, DFL Style Apr 27 11:11 35-31, 68-65: A Tale of the DFL's Tax Troubles
Tarryl's Push-Polling (And Other Interesting Items)
Friday night, I got Tarryl Clark's weekly e-letter update. Included in her e-letter was this push-poll . It's theoretically a survey on how to solve the budget deficit. Here's the first question with a set of options:
2. Cut Health and Human ServicesNotice that 'Other' wasn't an option. Notice, too, that the description tells the person taking the survey that disastrous things will happen if they decide to cut the budget.
A 10% cut will result in at least 113,000 people losing health insurance, hospitals getting a 3% cut in rates, nursing homes being cut, the potential loss of 10,610 health-care related jobs, and in-home services for 10,000 seniors and disabled individuals being eliminated.
0% = $0 saved
10% = $959 million saved
20% = $1.92 billion saved
30% = $2.88 billion saved
That's a dangerous assumption. It's assuming that the way we're doing things is the best way of doing things. Anyone care to bet that there's better ways of doing things?
Here's another question and its set of options:
3. Cut EducationAgain, the potential loss of services assumes that all school districts are running a tight fiscal ship with no wasted money anywhere to be found. What's the chances that every school is efficiently spending every penny of the taxpayers' money?
A 10% cut could potentially lead to a substantial increase in local levies and increased class sizes.
0% = $0 saved
10% = $1.38 billion saved
20% = $2.76 billion saved
30% = $4.14 billion saved
Another item in Tarryl's e-letter worth questioning is this statement:
The Legislature is in a position to finish the session on time with a long-term responsiblybalanced budget.Based on the fact that the DFL leadership barely passed their tax increase bill and the fact that it'll get vetoed by Gov. Pawlenty and based on Rep. Gene Pelowski's ripping the House DFL's tax increase bill , I'd say that the DFL has some scrambling to do.
Then there's this statement:
Despite recent problems getting timely financial information from the Administration, the Senate has continued to stay focused on fixing the state's historic $6.4 billion deficit. I am advocating a balanced approach that provides adequate funding to educate our children, keep citizens healthy and maintain safe streets while remaining fiscally responsible.TRANSLATION: Balanced approach is a euphemism for tax increases. In this instance, it also means that the DFL Senate leadership refused to set priorities and living within those priorities.
There are major differences between the Senate and the Governor's plans to deal with the historic budget shortfall. The Senate takes a more balanced approach by breaking the $6.4 billion problem into three, more manageable pieces, and balances the budget for the long term, all the way to 2014. The Senate proposes to use one-third federal funding from the American Recovery and Reinvestment Act (ARRA), one-third proportional budget cuts, and one-third revenue increases through a temporary income tax increase that would "blink off" when the deficit is paid off.Several things are worth noting. What thoughtful person thinks that the DFL's "temporary tax increase" will "blink off" without the GOP retaking the House and Senate while holding the Governor's mansion? Why should anyone think that the DFL won't think of new 'priorities' to spend those taxes on?
In contrast, the Governor's plan mostly focuses on one-time money and borrows against future revenues. His approach pushes problems into the future and leaves the state with a $2.6 billion shortfall in the next budget cycle. The Governor's short term approach raises over $600 million in property taxes and borrows $1 billion that will cost $1.6 billion to pay back. It's kind of like using a payday loan to make your house payment. It buys you a month, but leaves you in worse shape down the road.
Let's remember that Tarryl told Leo and I that the first six Senate bills of 2007, each of which included tax increases, weren't greenlighted by Senate leadership . Tarryl's statement rang hollow when the DFL went on a tax increase spree in March, 2007. It's difficult to trust people after that type of experience.
Here's something else worth questioning:
Tarryl says that the Senate DFL plan "balances the budget for the long term, all the way to 2014" with spending cuts, one time stimulus money and tax increases. The next paragraph, she criticizes Gov. Pawlenty for utilizing one-time shifts, saying that that "pushes problems into the future and leaves the state with a $2.6 billion shortfall in the next budget cycle."
If the one-time stimulus money is part of the DFL's solution, won't that leave the next biennium's budget out-of-balance? If not, why not?
QUESTION: Isn't the DFL really saying that they're hoping that the economy picks up so they won't have to do any more cutting?
BONUS QUESTION: Doesn't everyone assume that the second this recession is over is the instant that the DFL will insist that programs A-Z were starved and need to be restored to 'full funding'?
THEY'VE WHAT?
Lawmakers have put together a calendar that is a road map for an orderly end to the session. While the differences are great, the Minnesota Senate is committed to working with the House and Governor to find a common-sense solution that will fix the deficit responsibly. We need a compromise agreement that puts Minnesota in the best position to recover from the recession and prosper in the future.The DFL legislature wasted time the first three months of the session doing nothing to solve the budget deficit. They dropped their tax increase bombs on us within the last 10 days. They did their Cherrypicked Testimony Tour in February.
That's before considering the ramifications of Rep. Pelowski's criticizing the House DFL's Tax (Increase) Bill and Tom Bakk's Tax (Increase) Bill squeaking by on a 34-31 vote. Anyone thinking that that'll be a fun conference committee is kidding themselves.
Now they want to say that there's an orderly path to finishing the session on time?
That's spin that a Clinton would be proud of. It's also the DFL's attempt to put pressure on Gov. Pawlenty. In their minds, it doesn't matter that the DFL did nothing the first few months of the session. This e-letter is the DFL's attempt to position themselves for blaming their trainwreck on Gov. Pawlenty.
I'd further add that raising taxes, driving more people and more small businesses from the stateisn't a "common sense solution" to the budget deficit. It's what the DFL does reflexively. That doesn't mean that it's common sense-related.
Posted Saturday, April 25, 2009 9:28 AM
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Andy's Right
If you haven't read Andy's post this morning, you owe it to yourself to put it on your priority list.
As usual, it's spot on, especially the part about "Journalism is dead." What isn't business as usual is that it's a tiny post by Andy's standards. (Perhaps that's because he was in a hurry to take his Carry permit test? Good luck Andy.)
Posted Saturday, April 25, 2009 9:38 AM
Comment 1 by Linda Stanton at 25-Apr-09 09:46 AM
Quality not quantity. It's part of the expected fight against the truth. Michelle needs our support. We have to fight back like she does. She makes sense and so they try to defend themselves. But lets not stoop to their level of dishonesty. Let's get more Republicans elected. Linda S.
Gov. Pawlenty's Letter, the DFL's Tax Problem
I just got a copy of Gov. Pawlenty's letter to Sen. Tom Bakk, the author of the Senate's Tax Increase Bill. Here's the text of Gov. Pawlenty's letter:
Dear Senator Bakk:First off, Sen. Bakk's legislation is a dead-man-walking bill. It's dead even before the House considers it. Let's remember that it barely squeaked through a veto-proof Senate. That's because 11 DFL senators voted against it. Sen. Bakk's bill won't get vetoed because it'll be gutted in conference committee.
In this historically challenging economic time, you have chosen to pursue reckless tax increases on nearly every Minnesota resident.
Minnesotans are tightening their belts and making hard sacrifices to manage their family budgets. State government needs to do the same. Now is the time to reduce government spending and prioritize programs, not increase taxes.
I am very concerned that your bill [SF2074 the Omnibus Tax Bill] embraces tax policies and practices from the past, rather than positioning our state for success in a hyper-competitive and rapidly changing world.
Your proposal not only raises $2.2 billion in taxes on every hardworking Minnesotan, it gives Minnesota the dubious distinction of having two of the top ten income tax rates in the country. The bill stifles job creation by escalating taxes on job creators, as 92 percent of businesses pay their business income through the individual income tax system. This bill has other troubling provisions such as the increase in the statewide property tax paid exclusively by businesses, and the 30 percent tax on interest income that would tighten credit access in a market already under extreme pressure. In addition, the bill repeals levy limits enacted just last year, which will only lead to higher property taxes.
I also find it troubling that you have included a provision in your bill that allows for an undefined increase in the Health Care Provider tax. the legislature has been in session for nearly five months and this lack of transparency regarding your planned revenue increases is irresponsible.
I appreciate that you included a few of my budget recommendations, including the upfront capital equipment exemption and the angel investment and Small Business Investment Tax Credit. However, your bill ignores many other important recommendations including reducing the business tax rate, Section 179 expensing, the reinvestment tax credit, capital gains exemption, and Green JOBZ. This session needs to be about more than just solving the budget deficit. We need to also focus on Minnesota's economic future.
I have serious concerns about your bill. As it stands, it will be vetoed. I urge you not to raise taxes on the citizens of Minnesota in these challenging economic times.
Sincerely,
Tim Pawlenty
Governor
Generally speaking, the DFL tax increases aren't going anywhere, especially after Rep. Pelowski's attack of Ann Lenczewski's Tax Increase Bill . Sen. Bakk and Rep. Lenczewski are bucking the DFL's rank-and-file, who are opposing these increases on electoral, not ideological, grounds.
Gov. Pawlenty's letter, coupled with Rep. Pelowski's quotes, really puts the DFL's tax increase agenda on the ropes. There's no doubting that the DFL will try sticking to their increase agenda as long as possible. Likewise, there's no doubting that Gov. Pawlenty, the House GOP and alot of DFL legislators from swing districts will oppose the DFL leadership's agenda.
Gov. Pawlenty's letter just emphasizes the DFL's predicament.
Posted Saturday, April 25, 2009 1:41 PM
Comment 1 by Twice Blessed at 26-Apr-09 03:14 PM
I'm curious why the DFL appears to be so overreaching on tax issues. While I disagree wholeheartedly with their views, I don't think they are stupid. What is the reason for presenting such a trasparent tax and not reduce spending budget? What else is up their sleeves?
Comment 2 by Gary Gross at 26-Apr-09 03:35 PM
Twice, Check back later. I think you might rethink your stupid comment.
President Obama's War
Gerald Warner's article is today's must reading. In his article, Mr. Warner claims that President Obama doesn't know who the enemy is, then provides examples of President Obama's war:
Obama's problem is that he does not know who the enemy is. To him, the enemy does not squat in caves in Waziristan, clutching automatic weapons and reciting the more militant verses from the Koran: instead, it sits around at tea parties in Kentucky quoting from the US Constitution. Obama is not at war with terrorists, but with his Republican fellow citizens. He has never abandoned the campaign trail.Today's Democrats are forever worrying about "America's image in the world." That's a lovely notion in peacetime but it's dangerous in wartime. Worrying about "America's image in the world" potentially gets in the way of national security officials doing their constitutionally mandated duties. Specifically, it might cause them to pull punches in interrogating HVTs.
That is why he opened Pandora's Box by publishing the Justice Department's legal opinions on waterboarding and other hardline interrogation techniques. He cynically subordinated the national interest to his partisan desire to embarrass the Republicans. Then he had to rush to Langley, Virginia to try to reassure a demoralised CIA that had just discovered the President of the United States was an even more formidable foe than al-Qaeda.
"Don't be discouraged by what's happened the last few weeks," he told intelligence officers. Is he kidding? Thanks to him, al-Qaeda knows the private interrogation techniques available to the US intelligence agencies and can train its operatives to withstand them - or would do so, if they had not already been outlawed.
So, next time a senior al-Qaeda hood is captured, all the CIA can do is ask him nicely if he would care to reveal when a major population centre is due to be hit by a terror spectacular, or which American city is about to be irradiated by a dirty bomb. Your view of this situation will be dictated by one simple criterion: whether or not you watched the people jumping from the twin towers.
It's time Democrats, especially this wet-behind-the-ears president, understood that they serve the American people first, not the European elitist snobs. It's time Democrats learned that the least of their worries are Tea Party attending Kentuckians who believe in the Constitution. It's time Democrats learned that military people returning from Iraq or Afghanistan aren't potential terrorists.
In short, it's time that Democrats stop living in the soft puffy world that they're currently living in. I'll close with Mr. Warner's closing paragraph because it's a great summation:
President Pantywaist's recent world tour, cosying up to all the bad guys, excited the ambitions of America's enemies. Here, they realised, is a sucker they can really take to the cleaners. His only enemies are fellow Americans. Which prompts the question: why does President Pantywaist hate America so badly?I won't say that President Obama hates America. I'm perfectly comfortable, though, saying that President Obama's first priority isn't putting the United States' interests first.
It isn't a stretch to say that President Obama's plan of restoring America's image in the world is off to a bumpy start.
Posted Sunday, April 26, 2009 6:37 AM
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So Far, So Good?
In assessing President Obama's first 100 days in office, Fred Barnes uses this clever analogy :
Strong job approval, higher personal ratings"--that's pollster Andrew Kohut's assessment of President Obama at roughly the 100-day point. "A bravura performance," wrote David Broder of the Washingon Post. The president's flacks take the Muhammad Ali approach: Obama is The Greatest. What comes to my mind, however, is the guy who falls off a skyscraper and halfway down declares, "So far, so good."Here's where Fred Barnes and I agree most:
Maybe there's a soft landing ahead for Obama or even a takeoff as his policies succeed. But my expectations are low. One reason is the Obama contradiction. Two of his stated goals (economic recovery, energy independence) are undermined by his actual policies. Another reason is history. There's no evidence to suggest Obama's policies of courting enemies and airing the country's supposed misdeeds will lessen threats to national security or strengthen America's role in the world.I said before his inauguration that, for the first time in his life, President Obama would be judged by what happens, not on his speaking ability. The results that'll matter most to people will be whether their 401(k)s get healthy again, whether energy costs stabilize and whether the economy continues shrinking or if it starts growing lethargically.
Obama, for the moment, is riding a wave of announcements, claims, hopes, and possibilities. This is what new presidents thrive on. It's what makes them popular, especially because there's no accountability. But a year from now, perhaps sooner, the joy ride will be over. Results will matter. Obama's policies will either be working or not. And if not, even a friendly media won't be able to sugarcoat the bad news or alleviate the political consequences.
Eventually, people will want proof that the path they're on is a path to prosperity. If that proof doesn't appear, their goodwill will disappear. It's nothing more complicated than that.
If President Obama's economy doesn't start showing signs of improvement, people will start questioning his policies.
President Obama's major policy initiatives aren't likely to spur growth. His health care plan, which will be written by Speaker Pelosi and Ted Kennedy, will hurt the economy while sucking hundreds of billions of dollars out of the economy.
President Obama admitted during the campaign that his Cap and Trade plans will "necessarily cause energy prices to skyrocket." There's no chance that people in the Midwest will like skyrocketing energy prices.
It's true the American economy is resilient. Its natural tendency is to grow, leaving recessions behind. What arouses this appetite for growth are incentives to invest that, in time, produce a booming economy and new jobs. But rather than incentives, Obama favors impediments: tax hikes for the investor class, more regulation, higher energy prices. He's created the most antibusiness climate in Washington since the New Deal. The best hope for a robust recovery is the trillions in liquidity that Federal Reserve chief Ben Bernanke has injected into the economy. That will surely help, but who knows how much, when, or at what cost in inflation.While it's true that people are still optimistic, that optimism, like President Obama's promises, has an expiration date. People won't continue believing in President Obama's policies when they see high energy prices cutting into their paychecks, when they see Speaker Pelosi's health care plan as the government taking over one-seventh of the United States' economy.
How long will they tolerate Obamanomics when everyone sees a tax increase instead of them seeing "95% of Americans seeing a tax cut"? How long will optimism last? I suspect that the midterm elections will tell us alot about that.
Posted Sunday, April 26, 2009 7:24 AM
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It's the Priorities Stupid
President Obama wants to pass massive changes in his time in office. Topping his agenda are signing universal health care and cap and trade into law, as is his signing a bill that gives the Treasury secretary authority to take over companies as he sees fit. Meanwhile, to put it charitably, the economy is struggling. When President Clinton took office, he focused his attention on getting the economy humming. President Obama? Not so much.
All of this leads to these questions: Why won't President Obama focus on the American people's top priority? Why does President Obama insist on focusing on passing his radical agenda? Why does President Obama insist on structurally weakening America's economy?
Passing Cap And Trade will necessarily send energy prices skyrocketing. President Obama said so on the campaign trail. Rep. John Dingell said so at last week's hearing. This is really, really stupid. It also shows how out-of-touch Democrats are.
The environmental extremist lobby slobber over themselves thinking about C And T. Main Street America finds out about it and is horrified at the thought of having their home heating bills and their gas prices skyrocket. If given a choice between saving the planet and saving money on their heating bills, I'd bet all but a few environmental extremists would pick saving money on their heating bills.
It isn't stretching a thing to say that Presiodent Obama's policies are hurting people. The Cap And Trade tax increase is incredibly hurtful to everyone living in the northern tier of states. Why would a man who claims to want to get the economy jumpstarted push such a tax increase now?
Simply put, that's insanity. It's also counterproductive. Shame on President Obama for pushing such destructive tax and environmental policies.
Shame on us if we give the Democratic leadership another term after this. It's time we voted these enemies of working people everywhere out of office. It's time we told them that we won't tolerate their anti-middle class policies.
Posted Monday, April 27, 2009 1:49 AM
Comment 1 by Walter Hanson at 27-Apr-09 03:10 PM
every Repubilican that wants to run for office should learn this phrase, "Global warming is a hoax!"
Than vote to oppose every stupid environmental friendly bill that talks about global warming.
Walter Hanson
Minneapolis, MN
Comment 2 by J. Ewing at 29-Apr-09 09:12 AM
Walter,
You're forgetting the "nuance." :-) You should say that, even if Global Warming is NOT a hoax (though we have seen no real evidence otherwise), the solution is simply unthinkable. There is nothing in the idea of preventing global warming that should leave millions of people starving in the cold, which is what cap and trade would do. There is absolutely nothing to be gained in the prevention of Global Warming that will be at all advanced by having the Obama government steal $2 Trillion out of the US economy. There is nothing reasonable about killing the US economy to change the composition of the atmosphere by ONE part per million!
Tax Reform, DFL Style
Over the weekend, Rep. Ann Lenczewski tried selling her Tax Increase Bill as tax reform. That's insulting, especially considering the things she strips out. Here's what MPR quoted her as saying:
"This bill proposes the most significant tax overhaul in 20 years," said the bill's chief author Rep. Ann Lenczeswki, DFL-Bloomington.Rep. Lenczewski, what makes you think that stripping out most of the home mortgage deduction is reform? It's likely that it didn't dawn on her that that deduction prevents middle income families from paying checks in the thousands of dollars in taxes? Then again, that might've been what drove her to include that in her legislation.
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.
'Reforms' like this will help kill the housing industry. It's bad now. Eliminating the tax deduction will kill it entirely.
Let's reword Rep. Lenczewski's opening statement to be truthful. First, here's her statement:
"This bill proposes the most significant tax overhaul in 20 years."Here's how it'd read if truth-in-advertising laws were applied:
"This bill proposes the most significant tax ripoff in 20 years."Rep. Gene Pelowski criticized her legislation last week. Here's what Rep. Pelowski said :
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."Gov. Pawlenty will veto any tax increase. That's what he told Sen. Bakk in this letter :
Dear Senator Bakk:Gov. Pawlenty follows that up with this closing:
In this historically challenging economic time, you have chosen to pursue reckless tax increases on nearly every Minnesota resident. Minnesotans are tightening their belts and making hard sacrifices to manage their family budgets. State government needs to do the same. Now is the time to reduce government spending and prioritize programs, not increase taxes.
I have serious concerns about your bill. As it stands, it will be vetoed. I urge you not to raise taxes on the citizens of Minnesota in these challenging economic times.Gov. Pawlenty won't have to veto Sen. Bakk's bill. It barely limped out of a veto-proof Senate by a 35-31 margin. It'll get shredded in conference committee.
BTW, the DFL senators that voted against the bill last week shouldn't think that that'll give them political cover, either, when the conference committee report is voted on. If they voted against Sen. Bakk's bill originally, then vote for the conference committee report, they're still voting for a massive, unpopular tax increase.
How Generous
Rep. Paul Marquart, DFL-Dilworth, said it allows counties to impose a sales tax to offset state aid cuts. "Instead of just raising those property taxes to make up those cuts or cut services, we're going to give you another option," he said. "We're going to allow you, if you wish, to impose a one half cent sales tax."Rep. Laura Brod isn't impressed:
The bill also removes the cap on property tax increases. Republicans argue that the tax hikes in the bill will harm the state's struggling economy. Rep. Laura Brod, R-New Prague, said it's unfair to average Minnesotans.I posted a list of new tax increases here . Here's a partial list of the DFL's tax increases:
"We're going to start seeing more losers than winners so this bill isn't about a more progressive system, it's more about a more regressive tax code," she said. "While the argument is about taking away all of these deductions and about creating tax fairness. If your definition of what's fair is taxing those who least afford it than I guess you'd want to vote for this bill."
- Cigarette Tax: $204 million tax increase
- Alcohol Taxes: $209.1 million tax increase
- Boats, ATVs & Snowmobiles: $10.5 million tax increase
- iTunes Tax: $3.17 million tax increase
- Gift Tax: $20.6 million tax increase
- Local Option Sales Tax: $391 million
- Income Tax: $467.7 million 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.I asked them what I'm asking now: If Sen. Bakk admits that people will drive into Wisconsin to save $20 in alcohol taxes, why wouldn't it then follow that small businesses will drive across the South Dakota border to save $50,000 in income taxes?
Rep. Lenczewski's statement that her legislation is tax reform is spin. I can't put it any clearer than that. What's most insulting of all the things Rep. Lenczewski said is this:
"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."I'm betting that few people who just filed their taxes think that taking their home mortgage deduction think of that deduction as preferential treatment or as a subsidy. I'm willing to bet that they think of it as the difference between breaking even and paying thousands of dollars or the difference between breaking even and getting a refund.
It's a staple of the tax code that's helped people realize the dream of home ownership. That's hardly a luxury.
Originally posted Monday, April 27, 2009, revised 10-Feb 3:17 AM
Comment 1 by J. Ewing at 28-Apr-09 08:43 AM
If the DFL wants to create tax fairness, then perhaps they ought to do away with EVERY deduction, credit and stipulation and go to a straight flat tax. It still isn't "fair" in that everyone pays the same, but everyone would pay the same percentage, and that is at least arguably fair. There can be nothing fair unless every dollar is treated exactly the same-- not taxed on some, untaxed on others, and all depending on who earned it, or where or how, and how many other dollars were earned. That's just chaos.
The other thing left unexplained is how it is "fair" to tax some people at 100 times the amount, and at 10 times the percentage rate, as some other supposedly equal citizens of the State? If they are trying to make the tax code "fair," are they admitting that the current tax code is UNfair? Doesn't that beg the question of why they passed an unfair tax before?
35-31, 68-65: A Tale of the DFL's Tax Troubles
Minnesota's DFL leadership has some troubles following this week's Tax Increase Bill votes. First, it's entirely possible that the DFL parked alot of votes for vulnerables. If that's the case, it's another too-clever-by-half' strategy. If they vote for the conference committee report, that's the vote the public will care about. If there's a similar vote on the conference committee report, then it limps to Gov. Pawlenty's desk, where he vetoes it, then says that the bill was bad for Minnesotans.
I've talked with several tax experts this weekend. These experts say that eliminating the mortgage tax deduction would all but destroy Minnesota's real estate business. Several of the parents I spoke with said that the child tax credit would cost them $400-500 yearly.
King picks up on something I talked about earlier this weekend. Sen. Bakk admitted that raising taxes on alcohol "would drive people across the Wisconsin border." Here's King's contribution to the discussion:
The Briton who doesn't believe this? Andrew Lloyd Webber . H/T: Stephen Karlson . Webber notes a young entrepreneur in the stage construction industry:Rep. Steve Gottwalt, my adopted state senator, likes to remind people that we don't have the money to build a 10' high wall around the state, which means businesses and people will leave. I suspect alot of them are heading for Sioux Falls.Under the new tax regime, he will have to pay 13.3 per cent to employ himself before he pays himself anything. And then he will have to pay 51.5 per cent on what's left. This is a guy at the cutting edge of his profession who works all over the world. He is in demand in every major territory where entertainment is produced. He has a young wife and two children. Last Thursday he told me that he and his wife had decided that the UK was no longer where they wanted to live.His wife thinks the State education system is inadequate. And she fears that a bankrupt Britain will increasingly be a worse place in which to live as the horror of our present financial mess hits us all in the solar plexus.He says that he is young enough to set up shop somewhere else. The new tax rates were the final straw. These talented young people know they will make it impossible for them to educate their kids privately in the UK.So Britain plc loses not just the 40 per cent he would have paid in personal taxes under the old regime - plus NI and everything else - but... Come on, I don't need to explain the knock-on effect. It's obviously huge and immensely damaging...I realize Sen. Bakk lives on the other end of the state, but he might want to pay a bit of attention to Sioux Falls .
Originally posted Monday, April 27, 2009, revised 28-Apr 6:41 AM
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