January 30-31, 2013
Jan 30 09:13 Obama's recession Jan 31 02:37 My advice to GOP legislators Jan 31 13:34 Californians leaving?
Prior Years: 2006 2007 2008 2009 2010 2011 2012
Obama's recession
When President Obama took office in 2009, he could legitimately say that the recession started under President Bush. That isn't the case now that the economy shrunk in Q4 of 2012 :
WASHINGTON - U.S. economic momentum screeched to a halt in the final months of 2012, as businesses pared back inventories and government spending fell sharply, while lawmakers struggled to reach a deal on tax increases and budget cuts.
The nation's gross domestic product shrank for the first time in three and a half years during the fourth quarter, declining at an annual rate of 0.1% between October and December, the Commerce Department said Wednesday.
Conservative analysts have half-kiddingly said that the mess he inherited on Inauguration Day, 2013 is worse than the mess he inherited in 2009.
President Obama's anti-capitalist policies have crippled several industries, including the natural gas and coal mining industries, the health care industry and community banks. President Obama's chickens have come home to roost.
If history were to be written today would note that he was the biggest foreign policy/national security president since Jimmy Carter and the worst economic president since Herbert Hoover.
The Affordable Care Act is crippling the economy with its tax increases:
Boston Scientific said this morning that it is planning to cut more jobs, nearly doubling the restructuring it started in 2011.
The company expects the new round of cuts to range from 900 to 1,000 positions, including layoffs as well as the elimination of unfilled positions.
This is a continuation of the Affordable Care Act employment cuts. Thanks to the ACA's onslaught of tax increases, companies like Boston Scientific are eliminating jobs to maintain profitability.
The sad part is that the Obama economic disaster continues, meaning more families will get hurt.
Posted Wednesday, January 30, 2013 9:13 AM
Comment 1 by Bob J. at 31-Jan-13 09:39 AM
Oh, come on. EVERYONE knows this would be a recession -- if we had a Republican President.
Under Chairman Zero? Just a 'bump in the road'.
Oops. Wrong failure.
My advice to GOP legislators
This MPR article talks about the fight Republicans are picking with Gov. Dayton over his proposed tax increases:
Gov. Mark Dayton and Republicans in the Minnesota Legislature are sparring over the definition of a fair tax system.
A week after the governor released his plan, Republicans are zeroing in on his sales tax and property tax proposals. Republicans in the House and Senate Tax committees blasted Dayton's budget plan Tuesday because they say it would force middle income Minnesotans to pay more in sales taxes.
That's the worst possible fight for GOP legislators to pick. My advice to the GOP powers-that-be in the legislature is pretty straightforward. Don't fight the fairness issue. First, that's DFL turf. Second, it won't change hearts or minds. Third, it doesn't do anything to highlight how Gov. Dayton's sales tax and cigarette tax increases hurt retailers. Fourth, it doesn't do a thing to highlight the established fact that cigarette tax increases shrink revenues from the cigarette tax. Fifth, fighting the fairness non-issue doesn't highlight the fact that Gov. Dayton's tax increases don't strengthen Minnesota's economy or job creation.
The GOP powers-that-be should focus like a laser on the fact that Gov. Dayton's budget and tax increase proposals will hurt Minnesota's economy because it chases businesses and shoppers to North Dakota and Wisconsin. They should follow Rep. Leidiger's lead . Here's how he drives those points home:
- Does your hand-me-down car need a tune-up? Auto repairs are taxed.
- Sick? Aspirin, cold medicine, and any other over-the-counter drugs are taxed.
- Getting married? The wedding dress and hair services are taxed.
- Need to buy your kids winter coats? Any clothing item over $100 is taxed.
- Need to make a will or get tax help? Legal and accounting services are taxed.
- Do your college-aged children need to buy textbooks online? Online purchases and digital downloads are taxed.
- Smoke? The cigarette tax is increased by nearly $1 per pack.
- Own a business? Business-to-business transaction sales are taxed.
Rep. Leidiger's list of specific tax increases should become the GOP's response to questions about what's awful about Gov. Dayton's tax increase proposals. GOP legislators should repeatedly question Gov. Dayton and the DFL legislature how the middle class and working poor will pay less in taxes when all auto repairs, non-perscription drugs, cigarettes and e-books will see tax increases.
GOP legislators should repeatedly question DFL legislators and Gov. Dayton about why they think the middle class and working poor wouldn't get hurt by these tax increases. Next, I'd tell GOP legislators to question Gov. Dayton, DFL legislators, especially Sen. Bakk , and ABM activists on why raising the cigarette tax and the sales tax won't change people's buying habits. Here's what Sen. Bakk said in 2009:
Senate Taxes Committee Chairman Tom Bakk, DFL-Cook, said... higher alcohol taxes would drive some liquor shoppers across the Wisconsin border .
Thus far, Sen. Bakk hasn't criticized Gov. Dayton's proposed cigarette tax increase even though it would have the same effect on retailers as the alcohol tax increase would've had in 2009. He deserves a ton of needling for what he hasn't said this time. It's time for GOP legislators to remind everyone that DFL legislators don't own their votes, that their special interest puppeteers own their votes. Sen. Bakk isn't saying anything because he's expected to say what Alida Messinger and ABM tells him to say.
Finally, I'd recommend that the GOP fight Gov. Dayton's budget, especially the tax increases, because it won't strengthen Minnesota's economy. GOP legislators should tell every interviewer how many jobs were created with a GOP legislature, then use that as a measuring stick against how many jobs this legislature creates.
Posted Thursday, January 31, 2013 2:37 AM
Comment 1 by Chad Q at 31-Jan-13 07:37 AM
Why exactly should the GOP pick a fight with anyone over tax increases and spending? The people made a clear choice in Novemeber and they chose higher taxes and more spending. The GOP should just sit back and let the DFL do what they want to do (going to happen anyway) and then watch the state melt down because the so called rich and businesses move to more tax friendly states and all that will be left will be the takers. I'd tell the GOP to sit back and let the DFL own it all.
Comment 2 by Gary Gross at 31-Jan-13 09:31 AM
Why should the GOP pick a fight with anyone over tax increases and spending?A: So we can remind them prior to the next election that a) we were right & b) the DFL's budget hurt Minnesotans & their employers.
Comment 3 by Bob J. at 01-Feb-13 09:20 AM
Gary, the problem is that the DFL is presenting a target-rich environment with Dayton's budget.
Oops. I keep forgetting only liberals can use that phrase.
Anyhow, Governor Goofy's budget is open to criticism virtually everywhere. The problem for Republicans isn't prioritizing as much as it is multitasking.
That said, you criticize the strategy of attacking sales tax increases even though every point on Representative Leidiger's list which you praise has something to do with a sales tax.
What am I missing here? If there's a nuance that would help sharpen the focus of opposition I'd like to know what it is.
Comment 4 by walter hanson at 02-Feb-13 02:27 PM
Gary:
I think you're missing a point. On a recent late debate I heard one of the GOP state senators talking about how the sales tax proposal will affect the construction and purchase a house.
He pointed out under the Dayton proposal the twelve or so subcontractors that are part of the building of a house will have to charge sales tax on their work which will increase the price of a house from $200,000 to something like $235,000 when you throw in a tax on the sale commission also.
Not to mention lets remind the voters hey they said they were only going to tax the rich and leave you alone. They didn't! If you kick them out of office (and keep them out) we will get rid of those taxes that they are trying to give you.
Walter Hanson
Minneapolis, MN
Californians leaving?
There was a time in the 1970s when California was the fastest growing state in the US. Thanks to their insane spending habits, especially on public employee pensions, California's taxes have skyrocketed while their economy has tanked. That's bad news but it isn't the worst news. It looks like there's about to be a major exodus of rich people leaving the state :
The Golden State's new 13.3 percent income tax on top earners prompted golfer Phil Mickelson to say earlier this month he was considering a move, and according to the accountants who advise millionaire athletes, he was just saying what a lot of jocks were already thinking. Federal taxes on the top income bracket just rose by roughly 5 percent, and, while there's nothing rich athletes can do about that, they are paying attention to which states dip into their game, and how much they take.
'They're going to have an exodus of people,' said John Karaffa, president of ProSport CPA, a Virginia-based firm that represents nearly 300 professional athletes, primarily in basketball and football. 'I think they'll see some [leave California] for sure. They were already a very high tax state and it's getting to a point where folks have to make a business decision as well as a lifestyle decision.'
Athletes staying in California are getting hit exceptionally hard. The top federal tax rate just jumped from 35% to 39.6%. California's top tax rate just jumped from 10.95% to 13.3%, meaning athletes like Phil Mickelson will pay hundreds of thousands of dollars more in income taxes:
It adds up, says Karaffa. As tax season enters full bloom, he expects to see an uptick in the number of clients who will consider leaving California. Under a hypothetical calculation, the tax difference for a single professional athlete making roughly $10 million a year between being a resident of California versus Florida is around $800,000 annually.
It isn't just Lefty that's taking notice:
Los Angeles Angels outfielder Torii Hunter, who recently signed with the Detroit Tigers, made headlines last year when he announced a move to Texas because of the state's lack of income tax. The move didn't shelter his game checks from income taxes, but it did allow him to save taxes on other income, including for endorsements and autograph signings.
Hunter did save taxes on his $12 million salary by leaving California to sign with Detroit, where the Michigan state income tax is a flat 4.35 percent. And more and more ballplayers are taking taxes into account when signing with new teams or giving their teams permission to trade them.
High profile athletes signing a 7-year, $120 million contract with Florida or Texas teams would save almost $10 million over the length of the contract by not signing with a California team. That's like adding a year to their contract. That isn't a difficult decision.
Deroy Murdock nails it with this article :
Last year, a record 1,788 Americans renounced their citizenship, mainly in favor of countries with lower taxes and friendlier political rhetoric.
Golf great Phil Mickelson generated headlines this week when he suggested that high taxes might drive him from his native California or perhaps America. "There are going to be some drastic changes for me," Mickelson said. "If you add up all the federal (levies) and you look at the disability and the unemployment and the Social Security, and the state, my tax rate's 62, 63 percent." Imagine keeping just 37 cents of every dollar you earn. Is that a fair share?
Travis Brown, author of "How Money Walks," demonstrates how Americans between 1995 and 2010 shifted some $2 trillion in wealth by abandoning California, Illinois, New Jersey and other high-tax states and unpacking in low-tax states such as Florida, Nevada and Texas.
"After spending several years mapping and analyzing these data, one correlation keeps popping up: Income moves to where it is most welcome, tax-wise," Brown writes. "Money walks because opportunity talks."
Whethere we're talking about high profile athletes or captains of industry, tax rates matter. States that attempt to gouge these people will hurt themselves because athletes won't put up with their thievery.
Think about this. In every census that I've been alive, California gained congressional districts through reapportionment. Until this time. For the first time in California's history, they didn't gain districts. If they continue their failing tax-the-rich strategy, I'd bet they'll lose seats after reapportionment in 2021.
Posted Thursday, January 31, 2013 1:34 PM
Comment 1 by Jethro at 31-Jan-13 10:43 PM
Well, I am certain Californians aren't heading to Minnesota to save a ton on their taxes.
Comment 2 by walter hanson at 02-Feb-13 02:23 PM
No, but if the DFL lawmakers don't get their act together Minnesotans will flee to Wisconsin. Isn't Walker proposing an income tax cut?
Walter Hanson
Minneapolis, MN
