September 10-13, 2010
Sep 10 06:38 Budgeting 101 Sep 10 05:18 McCollum vs. Collett Sep 10 07:56 Pederson-Hentges Debate Sep 13 15:16 Melendez Scrambling Sep 13 04:32 Sen. Dayton & Untaxed Income Sep 13 00:04 Dayton Pinned Down On Taxes Sep 13 03:55 Tarryl's Tax Troubles (Continued)
Prior Months: Jan Feb Mar Apr May Jun Jul Aug
Prior Years: 2006 2007 2008 2009
Budgeting 101
Much is being made about Rep. Emmer's & Sen. Dayton's budgets so I thought I'd put a little something together on the subject.
First, it's important to note that the budget bills signed by Gov. Pawlenty have spending projections for the 'out years'. These projections are known as tails. The next legislature may or may not increase spending as much as the tails call for. They're under no obligation to spend the amount that the tails call for. In fact, it isn't often that they're followed.
Next, it's important to understand that the people who put the budget projections together can't forecast based on what they think the legislature and the next governor might do. Their projections must be based on the size of the tails since they're signed law.
The legislature will have to deal with the education shifts to schools. That's another key component of this budget forecast. Again, the next legislature isn't obligated to restore this money. That said, it's likely that these funds will be restored regardless of who's elected this November.
Obviously, revenues have to be calculated. These calculations must be based on existing law.
The Minnesota Department of Revenue has general guidelines that gives a candidate like Mark Dayton or Tom Horner a rough estimate of their tax increases.
The truth is that the legislature isn't obligated to spending a penny more than they did in the 2010-2011 biennium. In fact, the next legislature and governor can choose to spend less.
That isn't my policy recommendation. It's just a budgeting statement of fact. Because of that truth, Tom Emmer is exactly right in questioning the size of the deficit.
He isn't saying that there won't be some difficult choices and difficult votes to be taken. He's simply saying that there's no way of knowing the size of the deficit because of the possible savings from the reforms he hopes to pass.
Tom Horner and Sen. Dayton are having vapors over Rep. Emmer's unwillingness to admit that there's a $5.8 billion deficit. That proves they haven't thought about the possibility of not keeping the budgeting on autopilot.
Tom's the only gubernatorial candidate who thinks legislators should think in terms of spending what's needed, not last year's amount plus more.
That's a revolutionary concept to career politicians like Sen. Dayton. It's time Minnesota trashed baseline budgeting and started using zero based budgeting. It's time they put Minnesotans first instead of government first.
Posted Friday, September 10, 2010 6:38 AM
Comment 1 by J. Ewing at 10-Sep-10 07:43 AM
And if they would simply go back to the spending contained in the 2007-08 budget, there wouldn't be any deficit at all! Surely the amount of spending we did just 3 years ago was good enough then that it should be good enough now?
Comment 2 by Rex Newman at 12-Sep-10 01:15 AM
Zero base budgeting has intuitive appeal but truth be told, it generally doesn't work, not even in the private sector. There is no procedural or technical substitute for solid management.
McCollum vs. Collett
Like many Democrats, Rep. Betty McCollum is afraid to face her GOP opponent. I can't blame Rep. McCollum for not wanting to debate Teresa Collett, especially on TV. That isn't a matchup I'd look forward to if I was Rep. McCollum's campaign manager. Still, it's telling that Rep. McCollum has refused to debate Teresa Collett on TV:
Teresa Collett, Republican candidate for Congress in Minnesota's 4th district today called upon DFL incumbent Congresswoman Betty McCollum to explain why she is denying the voters the chance to see the differences between the candidates on the November ballot. Today, McCollum rejected an invitation to take part in the KSTP-Channel 5 debate to be taped on Sept. 19th. Despite Congress not being in session that day, no reason was given for the snub.Rep. McCollum has voted for the trifecta, aka the stimulus, Pelosicare and Cap and Trade. Nobody in their right mind thinks that the stimulus has worked. Rep. McCollum probably isn't participating in this debate because she doesn't want to have to defend those votes. Even in typically Democratic districts, voters saw the Democrats' radicalism.
"What does Betty McCollum have to hide from the voters besides her record", asked Teresa Collett.
America's prosperity has been derailed by the politicians in Washington and Betty McCollum and Nancy Pelosi are part of the problem. Betty McCollum has been in office for nine and a half years and unemployment is nine and a half percent. Throughout the 4th Congressional district in Minnesota unemployment has doubled or tripled since Betty took office.
"McCollum is a typical politician who does not want to debate on television where voters may be informed of her record and the voters deserve more from her than that," stated Collett.
Teresa Collett is a law professor at the University of St. Thomas, a wife and mother of three, an author, lecturer and advocate.
Prior to this year, Rep. McCollum could coast, never thinking twice about voting for radical things like Cap and Tax or Pelosicare. This year, she can't be certain that she'll get away with those votes. Standing alongside a competent, intelligent conservative lady like Teresa Collett isn't the image that McCollum wants splashed across a TV screen.
I've heard Collett on the radio a number of times. She's an impressive candidate, easily McCollum's equal, if not better. In this crazy year, Teresa Collett certainly is capable of defeating Rep. McCollum. The people that were identified early as vulnerable now lost for the D's and the next group well on their way to losing, the NRCC should be well on their way of targeting the group that was initially classified as leans Democrat.
McCollum refusing to debate on statewide TV is a sign of weakness. More importantly, it's proof that she's worried. If I was managing the Collett campaign, I'd start running ads similar to the old Wellstone Where's Rudy ads. If McCollum won't debate on TV, then I'd highlight that by ridiculing McCollum.
Posted Friday, September 10, 2010 5:28 AM
Comment 1 by beverly aplikowski at 10-Sep-10 12:06 PM
For Betty to pull out because it is KSTP and Stan Hubbard has donated to Teresa and organized the debate is truly a sign of Betty's paranoia.
weak weak excuse
Running away again like she did in past years.
Is Betty AFRAID to debate?
Comment 2 by Mark at 10-Sep-10 03:07 PM
I'm sure Collett's campaign would love to run ads. Ads are expensive, though, so people need to donate so Collett can do what is necessary to win. Her campaign has been gaining quite a bit of steam recently - everybody needs to give at least $25 to her.
If you haven't done so yet, goto www.collettforcongress.com/donate/ and give $25, $50, or more. Then get your friends to do it. I certainly have...
Comment 3 by Rex Newman at 12-Sep-10 01:24 AM
Our candidates go on MPR, CNN, even Chris Matthews.
Pederson-Hentges Debate
8:05 -- Chamber President Theresa Bohnen introducing candidates.
8:07 -- Q: Why are you running & what skills do you have?
8:08 -- Hentges: Voters should decide based on commitment to community. Gov't must play a role. (There's a shocker.) Must plan for long range.
8:09 -- Pederson: I currently serve on St. Cloud City Council. I've never missed a vote. I do the research. "I talk to people on both sides of the issue to know what's driving their decisions." "I've been living this recession everyday." 85 percent of current deficit is because of unemployment.
8:14 -- Q: Two biggest priorities.
8:15 -- Pederson: Obviously, jobs is first priority. Second, working with those across aisle. Cites income tax revenues being down. Notice who's endorsed which candidates.
8:16 -- Hentges: Bonding bill a high priority. Langseth said he'd re-instate Pawlenty's line item vetoes. State must use tax credits.
8:18 -- Hentges: Notice where signs are located. I can work with wide range of people.
8:21 -- How to fix deficit?
8:22 -- Hentges: Racinos & casinos, tax increases, redesign gov't. Don't destroy the foundation.
8:23 -- Pederson: State budget operators should operate with last year's budgets. Businesses & families doing that.
8:25 -- Hentges: Pederson's website has inaccuracies.
8:26 -- Pederson: I pulled the numbers from official reports. "I'll be glad to go over those numbers with you."
8:27 -- Q: How would you work taxes?
8:28 -- Pederson: EITC should be part of equation.
8:30 -- Hentges: Tax system isn't fair. Cites regressive nature of taxes. Doesn't cite fact that DFL passed regressive taxes.
8:32 -- Pederson: Let rich voluntarily pay more. Property taxes-- Minnesota ranks 21st.
8:34 -- Hentges: Farmers have shown me property taxes going up from $9k to $20K. Fails to cite Green Acres.
8:35 -- Pederson: DFL brought Green Acres forward. I'd vote to repeal Green Acres changes.
8:37 -- Hentges: Denying Green Acres has had effect on rural property taxes.
8:40 -- Q: Education.
8:41 -- Hentges: Big disparity between St. Cloud and Twin Cities, almost $18,000 difference.
8:42 -- Pederson: That's what happens when the Sen. Majority leader is from N. Minneapolis.
8:44 -- Q: Health Care.
8:45 -- Pederson: Too much is tied into fed gov't. Short term fix with Early MA doesn't go beyond 2014.
8:46 -- Hentges: People should adopt good lifestyles. Federal gov't covers new 32 million people. Says that Obamacare increases Medicare solvency. Get serious, Mr. Hentges.
8:48 -- Pederson: I know that if I could buy insurance from Ohio, I'd save money.
Posted Friday, September 10, 2010 7:56 AM
No comments.
Melendez Scrambling
DFL State Party Chairman is scrambling in his attempt to hide the fact that Sen. Dayton's budget doesn't add up . Had he wanted to sound believeable, he should've read this post before putting his foot in his mouth.
Check this major league bit of tap-dancing by Melendez :
DFL state chair Brian Melendez said Emmer has been denying the threat of a deficit even as Pawlenty has acknowledged the problem and taken steps to alleviate a related cash-flow crisis.Gov. Pawlenty can't take action on anything involving the biennium that starts July 1, 2011. That's why this year's cash flow problem are just that: this year's problem.
What Chairman Melendez won't admit is that the legislature and governor that we'll elect this November can make their own spending decisions. The legislation that was signed into law calls for an increase in spending of roughly 20 percent. That's irresponsible and then some.
Even though it was irresponsible, that's the figure that MMB has to work with in generating a budget forecast. Just like the CBO, they can't speculate on what might happen. They're forced to use the figures in the budget bills' tails.
Chairman Melendez assumes that legislators are automatons, incapable of doing anything other than ratifying the increases from the previous legislature or increasing spending even more.
The DFL hasn't listened to the people in 5 years. While people are hurting, the DFL is doing its best to cripple Minnesota's economy, putting people in a bigger hurt than when they took control of the legislature.
Dayton's whimsical budget (From this day forward, I won't use the term plan except mockingly) doesn't balance the budget and it certainly cripples Minnesota's job creators.
Melendez is hoping that he'll distract the lapdog media from the disaster known as Mark Dayton. That's a pretty easy job these days, with the likes of Esme Murphy serving as hostess on the Dayton infomercial.
These days, the only reporter who won't hesitate in asking insightful followup questions of all candidates is Tom Hauser. Pat Kessler and Esme Murphy surely haven't questioned Dayton on his assumptions.
A couple weeks ago, Dayton said that he didn't have the computing power to run his numbers. Why didn't Murphy ask him why he hasn't asked the Dept. of Revenue to evaluate his tax the rich scheme? That's a pretty straightforward question, one any reporter with an ounce of curiosity would've asked.
While it's true that Melendez is doing what he needs to to conceal his candidate's ineptitude, that doesn't mean that the thinking media should let him get away with his schtick. If the lapdog media won't question Chairman Melendez, the Thinking Media will.
Posted Monday, September 13, 2010 3:16 PM
No comments.
Sen. Dayton & Untaxed Income
Thursday, I wrote this post about Sen. Dayton's tax shelters. I quoted his spokeswoman, Katharine Tinucci, as saying this:
"According to Mark's financial adviser, his father's trust, of which Mark is currently a beneficiary, has no holdings in the Cayman Islands or British Virgin Islands," Dayton spokeswoman Katharine Tinucci said. "Furthermore, all income from the trust distributed to Mark is fully taxable in Minnesota."Here's what I wrote in response:
I don't doubt that "all income from the trust distributed to Mark is fully taxable in Minnesota." It's the money that isn't distributed that isn't being taxed.Let's call this principle the Dayton Doctrine. Sen. Dayton thinks that all money that's distributed to him, aka the money that he lives off of, is paying his fair share. Based on Sen. Dayton's example, which he's established with his actions, the money earned by the Dayton family trust funds is off limits.
If we're being honest, the family trusts earn many times more money than what's distributed to Sen. Dayton and his family. If we're being intellectually consistent with the Dayton Doctrine, then profits earned by companies that file as individuals, aka s-corps, shouldn't be taxed.
After all, using the Dayton Doctrine, undistributed profits from the trusts aren't taxed. Let's remember that, for many of these entrepreneurs, their business is their retirement fund.
For all of the Dayton campaign's spin, the reality is that he's a hypocrite. He's benefited from a trust fund that, at minimum, wasn't taxed for years. Now he's whining that capitalists that put their capital at risk and who pay taxes both on their salary and their profits aren't paying their fair share.
How dare Sen. Dayton hide his family's money while complaining that job creators and risk takers aren't paying their fair share. His hypocrisy is disgusting. His telling people that they aren't paying their fair share while protecting his family's wealth from taxes is what I'd expect from a career politician, not from Minnesota's next governor.
This is rapidly becoming a habit with Sen. Dayton. We didn't hear a peep from Sen. Dayton when his family ran one dishonest ad after another against Tom Emmer. The minute Minnesota's Future ran an ad that criticized him on the issues, Sen. Dayton started whining.
Now, after benefiting from a trust fund that either wasn't taxed for decades or was taxed extremely lightly, Sen. Dayton is telling Minnesota's job creators and risk takers that they aren't paying their fair share.
It's patently obvious that Sen. Dayton doesn't think that the rules he wants applied to others should apply to him. That isn't acceptable. If Sen. Dayton keeps his family's trust funds protected from taxes, then we should reject him as just another liberal hypocrite who thinks the rules don't apply to him.
Sen. Dayton's policies won't make Minnesota prosperous. They'll just cause people to hide their money rather than use it to create wealth and prosperity. Sen. Dayton's policies won't help put people back to work so they can keep their homes and pay their bills.
What's worst is that his policies don't add up to a balanced budget or vigorous job growth. It's time to stop taking Sen. Dayton's alleged 'detailed budget plan' seriously.
Posted Monday, September 13, 2010 4:32 AM
Comment 1 by eric z at 13-Sep-10 12:19 PM
Is the argument that trust capital gains should be taxed different than individual capital gains?
Trusts do pay capital gains, don't they?
If the argument is that capital gains should be taxed at the identical rates as earned income, I would not disagree.
Dayton, or Hemsley, or Arne Carlson and Tom Horner, any of them if they earn a hundred grand in one year from stock transactions, and Gary if you labor for that identical amount, they pay less on the capital gain than you do - and they did less but sit and make an investment choice, while you worked for your pay. Why should their investment hundred grand be taxed at a different and lower rate than yours?
Also, if one of them got a salary of a hundred grand, and took a capital gain of a hundred grand, and then you labored to earn two hundred grand, they again pay less than you.
And they can sit on an asset and have it appreciate but dely having to pay taxes until they choose and plan and sell. But on earned income you can agree to future payements and not be taxed until paid, not when earned. So that's fair.
The inheritance and estate taxes on massive wealth need to be increased and use of trusts to avoid that should be curtailed. Accumulations of wealth in excess of ten million also should be taxed, if you like Huey Long's "Tax the wealth" slogan.
Dayton is far restrained from that. He only wants to raise Minnesota income taxes on the upper marginal rate levels. That's quite conservative vs. what I would do if I were in charge of making taxation fair to lower and middle income earners.
It is like Dayton is far more right wing than I am, just as Horner and Arne Carlson are not extremist GOP right wingers.
There's a spectrum, with Dayton in the middle; Emmer and Bachmann far, far to the right - and Dayton's answers are better for the Tea Party faction that understands things. The GOP wants to co-opt the Tea Party anger, but not to do anything helpful for low and middle income earners.
Response 1.1 by Gary Gross at 13-Sep-10 12:35 PM
Eric, This isn't that complicated. The Dayton trust funds were set up in places like the Virgin & Cayman islands & South Dakota, where the trusts aren't taxed or are taxed very little.
My point is simple: Dayton only pays taxes on money that's disbursed to him. That should be considered his fair share because he's certainly rich. If you applyied the same standards to small businesses as Dayton applies to himself, they shouldn't have to pay taxes on the money they earn but don't disburse. In other words, Dayton is living by one standard while attempting to impose a more onerous burden on others.
If Dayton doesn't pay Minnesota for the taxes that didn't get paid while his trusts were in the Virgin & the Cayman Islands & in South Dakota, then he's the worst kind of hypocrite.
Comment 2 by J. Ewing at 13-Sep-10 12:53 PM
There's another way to look at it, too. Mr. Dayton believes that they rich would be "happy to pay more for a better Minnesota." How happy did he make himself last year? Did he pay more than what he owed, even by the standards of his huge tax avoidance scheme? Did ANYBODY "rich" pay more than they owed?
Comment 3 by Bill C at 13-Sep-10 07:19 PM
Dayton in the middle?? I wonder what Eric considers far, far to the left?
Gary, with a little bit of trimming, this would be a GREAT letter to the editor of the Strib.
Response 3.1 by Gary Gross at 13-Sep-10 09:40 PM
I'm working on something far more important for an LTE. I'll keep you posted.
Dayton Pinned Down On Taxes
During his mini-infomercial with Esme Murphy, Mark Dayton admitted that the highest income tax rate he'd propose would be less than 11 percent. Based on Minnesota Department of Revenue guidelines, which I wrote about here , that means Dayton's budget wouldn't come close to balancing. Here's what the guidelines say about revenue projections:
So how much money would boosting income tax rates actually deliver? According to the revenue department, each tenth-of-a-percent increase would currently bring in an additional $27 million annually, or $54 million each biennium.Dayton said that he wouldn't raise taxes more than 3 percentage points, meaning his tax the rich scheme would generate approximately $1,600,000,000 in additional revenue. Dayton also said that he'd raise property taxes on homes valued at more than $1,000,000.
Based on that information, and assuming that Dayton would essentially approve of the spending increases from last session's budget bills, Dayton's 'detailed budget' would fall at least $3,000,000,000 short of balancing.
It's time that Minnesotans realized that Dayton's supposed detailed budget isn't a budget blueprint. It's a tax increase. PERIOD. END OF DISCUSSION.
It isn't intended to balance the budget. Why hasn't the media picked up on the fact that Dayton's justification has consistently been that "the rich" aren't "paying their fair share." He's never made an economic argument for his tax the rich scheme. It's always been a fairness argument.
I haven't seen anyone question the economic wisdom of raising taxes on Minnesota's job creators and risk takers. It's time that the lapdog media started doing their jobs. It's time they asked hard-hitting questions of Dayton. Thus far, they've given him kid glove treatment.
If we had real reporters, they'd be asking Dayton how he'd make up the difference. It isn't likely that Dayton would cut spending more than a token amount. Thus far, he's said that he'd cut spending by less than $700,000,000. Dayton's also promised EdMinn that he'd increase education spending every year "without exception, without excuses." Those spending increases likely either are equal to Dayton's spending cuts or are greater than his spending cuts.
There's another thing that Dayton hasn't defended, which is how his plan would create jobs, other than bonding bill jobs, or create a great economy. Let's remember that the only jobs Dayton has talked about creating are construction jobs and green jobs.
What about people who don't work construction or work for a green jobs company? Why hasn't Mark Dayton shown that he cares about other segments of the economy? It's nice that construction workers will be busy but I'm betting that most Minnesotans are more concerned with creating jobs in all parts of the economy.
Mark Dayton's plan is more about feeding the government beast than it's about creating a prospering economy. That's shameful. What's worse is that the lapdog media hasn't picked up on that or questioned Sen. Dayton's sham budget plan.
Sen. Dayton's admissions during his interview with Esme Murphy should frighten people. It isn't just that his numbers don't add up. It's that they're so far off that Dayton hidden plan hasn't been discussed yet.
If the day arrives that Dayton's plan is exposed, he's history.
Posted Monday, September 13, 2010 12:04 AM
Comment 1 by ESTLAUR at 13-Sep-10 03:08 AM
REPUBLICANS SAY GOVERNMENT DOESN'T WORK, THEN THEY GET ELECTED AND PROVE IT!
Tarryl's Tax Troubles (Continued)
Tarryl Clark's tax troubles just got bigger. In an interview with the St. Cloud Times' Mark Sommerhauser, Tarryl made this outlandish statement:
Clark also argued the Bush tax cuts haven't delivered economic growth. "Those cuts have been around for a long time," Clark said, "and they have not meted out the promised outcomes."What galaxy is Tarryl living in? They're what pulled the economy out of the recession, followed by 9/11, followed by the financial scandal. How would Tarryl explain this ?
But there's no way that the best quarterly GDP numbers since Ronald Reagan's presidency aren't good news for the White House. It increasingly appears that as he tries for a second term, Bush may be less vulnerable to attacks on his economic stewardship than he is to criticism about foreign policy. That position is the reverse of what seemed likely only a few months ago.The myth that the DFL is peddling is that Bush's tax cuts ruined the economy. That's utter nonsense. What pushed the economy to the brink of a depression was the financial sector scandal. PERIOD. Had Sen. Obama and Sen. Dodd not filibustered a Fannie/Freddie reform bill, there wouldn't have been the collapse that we saw.
"The short-term politics of this are favorable to the president and it puts his Democratic critics on the defensive," says Merle Black, a political scientist at Emory University in Atlanta.
The GDP growth of 7.2 percent annual rate for the third quarter was the highest such figure since the first quarter of 1984. It was almost double the 3.3 percent pace registered in the second quarter, and surpassed most analyst's projections.
Here's something else that Tarryl is attempting to distance herself from:
Bachmann and other Republicans opposed a proposal to combat climate change by imposing a cap-and-trade system on energy companies. The U.S. House passed such a bill, derided by Republicans as "cap-and-tax", in 2009, but the Senate has yet to follow suit. Clark wouldn't say if she would have supported the cap-and-trade bill if she'd been in the House, and doesn't expect she'll have to vote on such a proposal if elected.In April, 2007, Tarryl voted for the Next Generation Energy Act. While it technically isn't Cap and Tax, the goal is the same: to dramatically reduce the use of fossil fuels.
The bigger lesson here is that Tarryl's voted against eliminating the moratorium on building nuclear power plants in Minnesota and she's voted for a bill that would dramatically reduce the use of fossil fuels.
It's essentially irrelevant whether Tarryl admits whether she would've voted for the Cap and Trade bill. We already know the answer because of what she's already voted for.
It's just more proof that Taxin' Tarryl's tax troubles are continuing.
Posted Monday, September 13, 2010 3:55 AM
Comment 1 by eric z at 13-Sep-10 12:32 PM
Clark is right. Eight years of Bush, eight years of Pawlenty; and the promised trickle down has not happened. The rich instead appear to have bid precious metals into the stratosphere and invested overseas, creating overseas jobs and growth opportunity; while screwing the good old US of A and its low and middle income earners.
Any low or middle income earner should regard the Democrats as the lesser evil.
Not good, the biases favoring the rich still exist, but the lesser evil.
Your guy Bush - as GOP a family as you can find including Prescott during the war - the two Bush presidents only served the rich, and unless you are rich Gary, I cannot see why you voted for and supported that.
Response 1.1 by Gary Gross at 13-Sep-10 01:51 PM
Eric, you couldn't be more wrong. During the Bush years, things weren't perfect but they're infinitely better than what we're faced with today. It isn't even close. Since Democrats took control, the housing bubble burst, the bailouts began, the deficit went from $160,000,000,000 to $1,500,000,000,000 & unemployment went from 4.6 percent to 9.6 percent. The Democrats have spent money they don't have on a few special interest allies, nothing on the middle class.
If the Bush tax cuts expire, say hello to the next wave of job cuts & the next recession. It's time your party stopped hating job creators & profit-makers.
Comment 2 by eric z at 13-Sep-10 12:37 PM
It was Phil Gramm who pushed through the financial deregulation that allowed Wall Street to get into irrational exuberance mode with derivatives, and allowed AIG to write insurance, in effect that, without any reserve pool to make good on the investment insurance when the market turned. Deregulation, Gary when you mention the old Gipper, that was all he ever said besides privatizing things like crop insurance so that Jim Deal in Ramsey could make himself wealthy by something that previously had been handled better governmentally.
Response 2.1 by Gary Gross at 13-Sep-10 12:50 PM
What's that got to do with Tarryl's tax policies? She's taken some indefensible positions on taxes. Now she's getting hit on that.
Comment 3 by walter hanson at 14-Sep-10 01:13 AM
Tarryl if we had no growth between 2003 and 2008 how come unemployment went from 6.0% to 4.6%?
Tarryl if we had no growth between 2005 and 2008 how come the gross national product went from $12.7 to 14.7 trillion?
Tarryl are living on the same planet that I'm living on?
Walter Hanson
Minneapolis, MN
