March 1-6, 2013
Mar 01 02:16 Dayton, DFL insist babysitters aren't paying their fair share Mar 04 01:35 Duplication Nation: Stupidity on autopilot, Part I Mar 04 01:38 Duplication Nation: Stupidity on autopilot, Part II Mar 03 05:24 An open letter to Rep. Ellison Mar 04 06:27 President Obama, why aren't you cutting spending? Mar 04 06:54 Let's speak in Main Street Speak, not DC Speak Mar 05 03:51 Another day, another DFL tax increase proposal Mar 05 13:53 Teacher's union overpromises, then seeks taxpayer-funded bailout Mar 06 04:30 Is Gov. Dayton's cigarette tax increase dead?
Prior Years: 2006 2007 2008 2009 2010 2011 2012
Dayton, DFL insist babysitters aren't paying their fair share
I never thought I'd see the day when a political party would attempt to collect sales taxes from kids shovelling snow, mowing lawns or babysitting. That day just arrived:
Here's the key exchange between Rep. Kurt Zellers and Minnesota Department of Revenue Commissioner Frans:
REP. ZELLERS: But if I pay him every month $20 or $100, is that going to be or is he going to have to start collecting sales tax and remitting it to the State of Minnesota?
COMMISSIONER FRANS: ...He probably would. If it was a monthly charge, then there likely would be a sales tax charge.
REP. ZELLERS: So then someone mowing my lawn, someone shovelling snow for me during the winter time or a babysitter?
COMMISSIONER FRANS: Those services would generally all be covered by the sales tax.
Wasn't it just 6 months ago that Gov. Dayton and the DFL were insisting that kids mowing lawns and shovelling snow weren't paying their fair share? Didn't they insist that babysitters weren't paying their fair share?
Wait a second. That's right. The DFL didn't. The DFL insisted that "the rich" weren't "paying their fair share." The DFL insisted that they were the champions of "working families."
There's nothing centrist about forcing kids to collect sales tax, then send it into the Minnesota Department of Revenue, because they mow their neighbor's lawn or shovel their sidewalks or babysit their kids. Only the DFL would think that's appropriate.
That isn't disgusting. That's beyond disgusting. That's something only the DFL would think of.
Tags: Mark Dayton , Myron Frans , Minnesota Department of Revenue , Tax Increases , Sales Tax , Babysitters , Mowing Lawn , Shovelling Snow , Kurt Zellers , MNGOP
Posted Friday, March 1, 2013 2:16 AM
Comment 1 by J. Ewing at 01-Mar-13 08:02 AM
When applied to the DFL, I don't think the word "think" applies.
Comment 2 by Bob J. at 01-Mar-13 11:46 AM
"Wasn't it just 6 months ago that Gov. Dayton and the DFL were insisting that kids mowing lawns and shovelling snow weren't paying their fair share? Didn't they insist that babysitters weren't paying their fair share?"
Wait'll those kids start paying their mandatory union dues.
Comment 3 by Jethro at 01-Mar-13 03:28 PM
Bob: Will the kids have a choice to pay fair or full share union dues?
Comment 4 by Janet at 01-Mar-13 04:00 PM
The leftist Dems are doing everything they can to destroy initiative. They want control and will do or pass anything to get it - assuming no one will ever discover their subterfuge.
Response 4.1 by Gary Gross at 01-Mar-13 09:21 PM
Janet, I'd taken time off from writing after (minor) surgery but this tax stuff & minimum wage crap's fired me up again. They've done pissed off a demanding taxpayer with some writing abilities.
Comment 5 by Bob J. at 04-Mar-13 11:50 AM
"Bob: Will the kids have a choice to pay fair or full share union dues?"
Jethro, you'd have to take that up with the International Brotherhood of Grass Trimmers, Weed Whackers and Snow Removers Local 2614.
Duplication Nation: Stupidity on autopilot, Part I
In late January, Sen. Tom Coburn, (R-OK), took to the Senate floor to expose how inefficient the federal government is. This video exposes the lowest of low-hanging fruit:
This isn't Sen. Coburn's entire presentation/exposition. This is about 4 minutes from a 40 minute presentation. This presentation is useful because of the principles Sen. Coburn lays out in terms of chopping overhead, improving efficiency and making it easier for the federal government to measure whether these programs are doing what they're supposed to do.
Here's a hint to House and Senate Republicans and to superPACs that insist on fiscal sanity: Sen. Coburn's presentation should be their message until we're running annual surpluses. If I were advising Republicans, I'd tell them this is a winning issue because thoughtful people, whether they're fiscal conservatives, fiscal moderates or independents, like seeing huge amounts of money being spent foolishly. And this money is being spent exceptionally foolishly.
Here's the part of Sen. Coburn's presentation that should get everyone upset with the federal government's inefficiencies:
Next one, housing assistance. We have 160 programs, separate programs. Nobody knows if they're working. Nobody in the administration knows all the programs. I'm probably the only person in Congress that does because nobody else has looked at it. Twenty different agencies. We're spending $170 billion. If we're really interested in housing assistance, why would we have 20 sets of overhead, 20 sets of administration? And what would it cost to accomplish the same thing? All these numbers come from the Government Accountability Office, by the way. They don't come from me. And the other part of the report is that nobody knows if these programs are working. We have no data to say that we're actually making a difference on housing assistance through this expenditure of money. So we're not even asking the most basic of questions that a prudent person would ask.
That's stunning and appalling. It's one thing to spend $170 billion. It's another to spend $170 billion without having a method to determine whether spending that $170 billion is having a positive impact.
There's no justification for not periodically auditing programs to see if these programs are doing what they're supposed what they're supposed to be doing. There's especially no justification to being disinterested in seeing whether they're efficiently doing their job so the taxpayers' money isn't being spent foolishly.
Sen. Coburn is a patriot. He's the first person to put together a detailed blueprint of how the federal government wastes tens of billions of dollars a year. He's the first person to show how this administration didn't take the time to make sure those tens of billions of dollars were being spent efficiently.
The thing that's infuriating is that President Obama is still pretending that he's interested in solving our deficit crisis. With this mountain of proof that the taxpayers' money is getting spent foolishly, it's impossible to take President Obama seriously.
When Arne Duncan, his education secretary insists that teachers have already gotten pink slips as a direct result of sequestration, people should ridicule him. When Ray Lahood insists that people will experience longer wait times as a direct result of sequestration, people should ridicule him.
When President Obama insinuates that his administration has cut the budget to the bare essentials, people, especially in the White House press corps, should ridicule him.
Based on Sen. Coburn's presentation, this administration hasn't even scratched the surface on getting rid of wasteful government spending. In fact, it isn't difficult to make the case that this administration isn't even mildly interested in eliminating wasteful government spending.
Tags: Tom Coburn , Duplication Nation , GAO Report , Housing Programs , Sequestration , Waste, Fraud & Abuse , Oversight , GOP , President Obama , Tax Increases , Spending , Democrats
Posted Monday, March 4, 2013 1:35 AM
Comment 1 by BarbNWMN at 04-Mar-13 08:32 AM
It would be interesting to see just how many members of Congress/Senate were actually in that room. All I see are empty chairs.
Response 1.1 by Gary Gross at 04-Mar-13 08:45 AM
That isn't a big deal. What I'm most worried about is what Sen. Coburn says about the foolish spending we've done.
Comment 2 by J. Ewing at 06-Mar-13 09:00 AM
$170B is twice the size of the horrible sequester! If these departments run like the rest of the federal government, they are at least 50% worthless overhead. Cut that and the sequester wouldn't be needed. Cut all the rest of the worthless things in the federal budget and it would balance, guaranteed. That's the pity.
Duplication Nation: Stupidity on autopilot, Part II
The first part of this series dealt with Sen. Coburn's criticism of the money being wasted on housing programs. Sen. Coburn's criticism focused on the duplicative and overlapping programs, the overlapping jurisdictions between agencies and the overhead involved in administering these programs.
This part deals with the grant programs from the DoJ:
Here's the transcript from Sen. Coburn's presentation on the DoJ grant programs:
SEN. COBURN: Department of Justice grants. Now the Department of Justice is the only agency in the federal government that, if they don't spend all their money, they get to keep that it. Most people don't know that. They have 253 different grant programs and, outside of the Department of Justice, there are 9 other agencies involved in that. Most of them, these programs, these grant programs, don't have any metrix, any measurement to say whether they're accomplishing the things that the Congress established for them to accomplsish in the first place. So if, in fact, a prudent person were to say 'We have these grant programs. What are they doing, what are they supposed to be doing and how are they measuring up?', we don't know because we don't require the federal government to measure how effectiveness of their programs.
President Obama, Sen. Reid and Minority Leader Pelosi continue to pretend that there isn't a penny's worth of wasteful spending left in the federal budget. Technically, they're right. They're right in the sense that there's tens of billions of dollars of wasteful spending left in the federal budget.
That leads to these important questions:
- If there are tens of billions of dollars of wasteful spending left in the federal budget, who are President Obama, Sen. Reid and Minority Leader Pelosi protecting?
- If there are tens of billions of dollars of wasteful spending left in the federal budget, why do President Obama, Sen. Reid and Minority Leader Pelosi insist that the only solution to this crisis is another tax increase?
There's no justification for increasing taxes for a fourth time this year. Thus far, Americans have gotten hit with a tax increase when the payroll tax holiday expired on New Year's Eve. The next morning, the tax increases from the Affordable Care Act kicked in. A day later, Congress passed a $600 billion tax increase on "the rich."
After all thos hundreds of billions of dollars of tax increases, President Obama, Sen. Reid and Minority Leader Pelosi insist that the solution to their spending addiction is...another tax increase? Seriously?
President Obama, Sen. Reid and Minority Leader Pelosi insist on another tax increase to feed their spending addiction. That's the only explanation that makes sense. They certainly haven't shown any interest in making sure the taxpayers' money is spent wisely. They certainly haven't shown an interest in getting the deficits under control. There's no denying the fact that President Obama and his administration have tried painting the most horrific picture imaginable.
Remember Arne Duncan insisting that teachers were already getting pink slips as a result of sequestration? Or Ray Lahood inisisting that waiting lines at airport check-ins would be longer? Better yet, remember President Obama telling the White House press corps that janitors in the White House would have their pay cut if sequestration went into effect?
There's no reason to trust anything that trio of politicians say about taxes or spending. They're proven themselve to be totally dishonest.
The most disgusting thing in the GAO report is the fact that, in instance after instance, there isn't a metrix to measure whether the programs are doing what they're supposed to be doing or whether they're spending money efficiently.
Tags: Sequestration , President Obama , Nancy Pelosi , Harry Reid , Tax Increases , Democrats , Tom Coburn , Duplication Nation , Department of Justice , Oversight , GAO Report , GOP
Posted Monday, March 4, 2013 1:38 AM
No comments.
An open letter to Rep. Ellison
Rep. Ellison, During your epic meltdown on Sean Hannity's show, you insisted that President Obama was right. You insisted that it was imperative to raise taxes again. You insisted that President Obama had valliantly cut the deficit while making "key investments" in America's future.
Those are exceptionally odd statements considering the fact that the annual deficits during President Obama's administration haven't wavered much, staying pretty much in the $1.1 to $1.3 trillion range. For awhile, President Obama insisted that everything would've been worse if not for the stimulus. Everyone with more than half a brain knew that that wasn't right.
Considering the fact that Sen. Coburn has found hundreds of billions of dollars in duplicative programs, most of which are waste, it's difficult to take anything you say on deficits, the necessity for raising taxes and the impossibility of finding even 2 pennies on each dollar spent in waste, fraud and abuse.
Rather than being part of the solution, you've insisted on being part of the partisan problem. By comparison, Sen. Coburn started working on finding the solution to this overspending crisis. Thanks to his persistence, it appears he's found that solution without raising taxes.
It's disappointing that you haven't taken off your partisan hat. Unfortunately, you've insisted on not putting on your 'solutions hat.' Unfortunately, it isn't surprising that you've refused to work towards a solution. Unfortunately, it isn't surprising that you've insisted on burying the American people under 4 tax increase in 3 months. In case you've forgotten, and I doubt you have, the American people were hit with a tax increase when the payroll tax holiday expired at the start of the new year. At the same time, they got hit with the full onslaught of tax increases from the ACA. Two days later, you voted for a $600 billion tax increase on "the rich" because you said they "weren't paying their fair share."
When President Obama insisted on closing loopholes, something he said wasn't good enough when he insisted on the Fiscal Cliff tax increase on the rich, you supported him without hesitation but with great enthusiasm.
The question that you haven't answered is simple. What makes you think that raising taxes 4 times in 3 months will strengthten the US economy? What historical proof do you have that that many tax increases in that short of a period of time will strengthen an economy?
Perhaps the better question is whether you're insisting on tax increases simply because you've reflexively increased taxes whenever you've had the opportunity. I suspect that's the case because that's what DFL legislators think.
One question that doesn't need asking is whether you think there's tens of billions of dollars being wastefully spent. I'm certain you know there is. I'm equally certain you're fine with that because that a significant portion of that wasteful spending is getting spent on your public union allies.
Finally, I'm thankful you aren't my representative, though I am sad that you techically represent some of my friends.
Tags: Keith Ellison , President Obama , Payroll Tax Holiday , Fiscal Cliff , ACA , Tax Increases , Sequestration , DFL
Posted Sunday, March 3, 2013 5:24 AM
Comment 1 by Chad Q at 03-Mar-13 12:52 PM
Well you know the old saying, "you can't fix stupid" and Ellison is about as stupid as they come. Well except for maybe the people who continualy vote for him.
Comment 2 by walter hanson at 05-Mar-13 12:37 PM
Gary:
One thing I would've highighted and I sent him a letter asking him eleven questions that when he came to Congress the budget was $2.7 trillion now it's $3.6 billion. Why can't we cut back on the $3.6 trillion since we grew spending by $900 billion.
Walter Hanson
Minneapolis, MN
President Obama, why aren't you cutting spending?
Lost in this conversation about sequestration is the thing that should be the most important point. In fact, it should be the only point in the conversation. President Obama has consistently insisted on raising taxes more. Reporters have called him on his scare tactics but they haven't questioned him on why he hasn't submitted a bill that acts on the duplicative programs throughout the federal budget.
This weekend, I wrote this article about federal spending on autopilot and this article about how the federal government doesn't require federal programs to determine whether they're doing their jobs or if they're even attempting to measure outcomes.
Tom Coburn did a fantastic job of laying out all the ridiculous spending at the federal level. He explained how many duplicative programs exist within the federal government and how each of those programs comes with their separate administrations and separate sets of overhead, all of which wastes taxpayers' money.
Why aren't reporters questioning President Obama about why they aren't even looking at those expenditures? If President Obama isn't available to answer those questions, they should ask Jay Carney. If Mr. Carney doesn't have the answer at his press briefing, these reporters should insist that he find the answers for the next day's briefing.
From the start of his administration, President Obama has refused to accept responsibility for his policies. He's refused to be transparent. This past Friday, President Obama tried to make it sound like people outside his administration were predicting the Apocalypse. Here's what he said :
'This is not going to be an apocalypse, I think, as some people have said,' Obama declared (not mentioning that his administration had been behind most of the apocalypse talk). 'It's just dumb. And it's going to hurt.'
Ray Lahood, President Obama's Transportation Secretary, talked about furloughing air traffic controllers. Arne Duncan, President Obama's Education Secretary talked about how teachers were already getting pink slips for next fall as a result of sequestration. President Obama himself said that the White House janitorial staff was getting forced into accepting a pay cut as a result of sequestration.
But I digress.
I suspect that President Obama isn't serious about cutting spending because his central focus isn't on implementing great policies. It's about winning political battles. It's time the White House press corps insisted that Jay Carney answer why this administration won't cut the foolish spending Sen. Coburn has highlighted.
If this administration won't implement those spending cuts, then we'll have confirmation this administration isn't serious about cutting the deficit, much less balancing the budget.
Tags: President Obama , Sequestration , Spending Cuts , Ray Lahood , Air Traffic Controllers , Arne Duncan , Teachers , Pink Slips , Democrats , Tom Coburn , GAO Report , GOP
Posted Monday, March 4, 2013 6:27 AM
Comment 1 by Shanna Carson at 04-Mar-13 03:02 PM
We need a spending freeze across the board. We should only maintain essential spending. After all, if it's not absolutely necessary, why are we spending money on it? Our children are getting further in debt before they are even born...
Comment 2 by walter hanson at 05-Mar-13 12:34 PM
I think that we need to highlight the lack of spending cuts by forcing Obama to propose the spending cuts and retract bad policies.
Way to do it, pass a bill like the education funding bill for 2014 and make it zero. Force the President to come to the table with a budget that will cut education.
Walter Hanson
Minneapolis, MN
Let's speak in Main Street Speak, not DC Speak
For most of the life of this blog, I've advocated for politicians to ditch their jargon. Instead, I've argued that politicians should use the language of Main Street. This morning, while perusing RealClealPolitics, I gained a powerful ally in Scott Rasmussen. To avoid any confusion, I'll first state that I met Scott Rasmussen last summer at the RightOnline Conference. That meeting, coupled with his many TV appearances, proved that he's a man who uses Main Street Speak.
Here's what Scott Rasmussen wrote that caught my attention:
This gap was highlighted by a recent Pew Research Center poll showing that "for 18 of 19 programs tested, majorities want either to increase spending or maintain it at current levels."
On the surface, those results appear to support the Political Class conceit that voters like spending cuts in the abstract but not in specific programs. That's the way it was reported by most media outlets.
But the reality is quite different. The Pew results actually show support for what official Washington would consider massive spending cuts.
Just to be clear, there is absolutely nothing wrong with the Pew poll questions or results. The raw numbers are similar to what we find at Rasmussen Reports. The problem is with the way the numbers were reported.
The questions were asked using the language of America, but they were reported using the language of the Political Class.
To most Americans, maintaining spending at current levels would mean spending the same amount in 2013 as we spent in 2012. However, to those experienced in the mysterious ways of Washington, maintaining spending at current levels means spending $3.5 trillion this year and $4.5 trillion in five years. To most Americans, that's a trillion dollars in spending growth.
The Political Class, on the other hand, would consider holding spending unchanged at current levels to be a massive spending cut. Why? Because it wouldn't allow for the trillion dollar spending growth that is already built into the budget.
Normal people don't expect pay raises on autopilot. The federal government does.
Washington, DC would throw a hissy fit if they were forced to use zero-based budgeting instead of using baseline budgeting. Without baseline budgeting helps DC pay off their political allies. Zero-based budgeting wouldn't let that happen. That's why politicians and lobbyists insist on baseline budgeting. Frankly, it makes their jobs easier.
Speaking candidly, I don't want to make life easy for politicians or lobbyists. I'd prefer they have to justify every penny of their spending. That's the only way to guarantee that every penny of the taxpayers' money is spent wisely.
Thanks, Scott, for speaking so clearly on this important issue. Let's just hope it's contageous.
Posted Monday, March 4, 2013 6:54 AM
Comment 1 by walter hanson at 05-Mar-13 12:30 PM
Gary:
Lets not forget pollsters might not ask questions which will highlight the difference. Question I will love asked:
In 2007 we were spending $2.7 trillion per year. In 2013 we are spending $3.6 trillion per year. In terms of where future spending is do you:
A. Think government spending should be reduce to the $2.7 trillion level.
B. Kept at $3.6 trillion.
Or C. instead of being raised to $4.5 trillion raised to just $4.4 trillion.
A and B as your post clearly shows will be battling for the top answers with C being a distant third.
Walter Hanson
Minneapolis, MN
Another day, another DFL tax increase proposal
Rep. Atkins proposed HF0857 , a bill for an act "relating to public pensions" that will impose another regressive tax increase on all Minnesotans. Here's the bill's key language:
Sec. 2. [297I.07] SURCHARGE ON HOMEOWNERS AND AUTO POLICIES.
Subdivision 1. Surcharge on policies. (a) Each licensed insurer engaged in writing insurance shall collect a surcharge equal to $5 per calendar year for each policy issued or renewed during that calendar year for:
(1) homeowners insurance authorized in section 60A.06, subdivision 1, clause (1)(c); and (2) automobile insurance as defined in section 65B.14, subdivision 2.
Rep. Atkins' submitted legislation will hit virtually every Minnesotan with a $5 surcharge, aka tax increase. Rep. Atkins' legislation treats a symptom. It doesn't fix the problem. This statement highlights the problem:
The 2010 Pension Reform Act includes provisions to increase vesting periods, increase employer and employee contribution rates, lower deferred interest rates for inactive members and lower refund interest rates. At the end of FY2010, the Minnesota State Retirement System, the Public Employees Retirement Association and the Teachers Retirement Association combined have lowered their unfunded liability by over $5.5 billion.
Too many of the public employee pension plans are defined benefit plans. They should be defined contribution plans. That change would dramatically shrink Minnesota's unfunded pension liability.
Instead of fixing the problem, which would require political leadership, Rep. Atkins favors imposing another regressive tax increase on Minnesotans. This legislation is proof that the DFL's insistance on fairer taxation is blather. The DFL, starting with Gov. Dayton and continuing through the DFL legislature, believes in all tax increases, not just progressive tax increases.
It's time for the DFL to show the political courage that fixes problems, not treat symptoms. HF0857 isn't a step in that direction.
Tags: Unfunded Liability , Pensions , Tax Increase , Joe Atkins , Defined Benefits , Defined Contributions , Pension Reform , Mark Dayton , DFL
Posted Tuesday, March 5, 2013 3:51 AM
Comment 1 by walter hanson at 05-Mar-13 12:24 PM
So let me get this straight.
He proposes a tax which will paid more by the poor and middle class than the rich. After all $5 is a greater percentage of their income which is the argument they make for taxing the rich.
And shouldn't there be some type of link to the area where the tax is going to. Car sale taxes, gasoline taxes, and reg taxes are meant for road construction and approved (unfortnately) for transportation projects. At least they are linked.
Walter Hanson
Minneapolis, MN
Comment 2 by Chad Q at 05-Mar-13 01:57 PM
So I have to pay more on my insurance policies so a public employee can retire at 55 with full benefits? I guess this is just another one of Rep. Atkins ways he has created capitalism.
The DFL couldn't care one lick about the poor or middle class. All they care about is protecting the unions, creating as many social programs as possible, and taxing everything. It is sad that the people who continually vote for these DFLer's really believe that the DFL cares about them and has their best interests in mind.
Response 2.1 by Gary Gross at 06-Mar-13 04:41 AM
Chad, you've totally nailed it. This isn't a one-time bailout, either. Because the DFL legislature won't fix the underlying problem, they'll turn this into an ongoing taxpayer-subsidized annual bailout.
Here's the nasty little secret: the St. Paul Teachers' Retirement Association won't be the only pension fund that'll get a bailout this session. Duluth is waiting in the wings for their bailout, too.
Teacher's union overpromises, then seeks taxpayer-funded bailout
For years, teachers have been double-dipping their pension accounts. Once again, the St. Paul Teachers' Retirement Association is asking for another bailout of their pension plan while selling it as a reasonable fix to the situation. It isn't reasonable to the taxpayers. It's a rip-off.
A proposal is expected to be introduced in the Minnesota Legislature in the next two weeks.
The goal is to close a projected $16.7 million per year gap between what the fund needs each year and what it actually brings in.
"This is a problem that's easier to remedy now than 10 years from now," said Paul Doane, the association's executive director. "I'm convinced this is a major step forward that will help both the long-term solvency and sustainability issue."
It's imperative that the remedy include 3 things. First, it's imperative that the fix end the defined benefit plan. Next, it's imperative that retire-and-rehire programs stop ASAP. Finally, it's imperative that early retirement be eliminated. Here's why it's imperative the retire-then-rehire program is stopped:
The fund estimates it could get another $3.4 million by increasing employee and employer contributions by 1 percent for each and modifying early retirement and return-to-work policies.
Under the proposal, retirees would have to wait six months before they can return to a job with the district, up from 30 days now. And, if they make more than $46,000 after they return, they would lose some pension benefits, which are now set aside and paid out after returnees leave the district.
TRANSLATION: Retire-then-rehire programs are costing taxpayers millions of dollars in pensions.
What's fair about telling private sector employees that they're getting hit with a tax increase to pay for a teacher to retire when they're 55, then start collecting a pension, then go on a month-long vacation before getting a cushy consultant's job? That's the system as it currently exists.
Why should taxpayers be funding a pension fund so public sector employees can retire when they're fifty-something, especially when it's a defined benefit pension plan?
There's a fight brewing on this crisis. This provides a good glimpse into the bailout fight:
Rep. Phyllis Kahn, DFL-Minneapolis, who will sponsor the House version of the bill, said this proposal is "fair, appropriate and prudent."
She noted that St. Paul Teachers received no state aid from 1987 to 1993. The state provided $22 million in annual aid to help the former Minneapolis teachers' pension fund reduce its shortfall before it merged into the state's larger Teachers Retirement Association pension fund.
But Thompson rejects the idea of using taxpayer dollars to shore up the fund while many private-sector workers are scaling back their own retirement plans because of the market downturn. He said the proposal is especially unpalatable because its proposed benefit increase negates the higher contributions from employees.
"In a nutshell, the St. Paul Teachers' Retirement Fund is looking for a net increase in benefits, with the state acting as a guarantor of their investments," he said. "In this economy, that's really asking a lot."
Rep. Kahn's reply exposed the system's flaw when she said that St. Paul teachers didn't receive any state aid from 1987 through 1993. The first pertinent question is "why should Minnesota taxpayers bailout a St. Paul public employees pension plan"? The thinking should've been that a pension plan that's underfunded at a time when the economy and stock market are going strong has a major structural flaw.
The response back then should've been to either insist on major structural reforms or let the teachers and trustees run the pension into bankruptcy. Overpromising isn't a virtue. It's a curse.
Sen. Thompson is right in saying that it's wrong to ask taxpayers to fund a bailout that would improve benefits for people in the St. Paul Teachers' Retirement Fund. With people living longer, increasing benefits isn't sustainable. That means this pension fund will need another bailout a decade from now.
How's that fair to private sector taxpayers?
Follow this link to read more on the subject.
Tags: Public Employee Unions , St. Paul Teachers' Retirement Fund , Unfunded Liability , Pension Bailout , Phyllis Kahn , DFL , Dave Thompson , Pension Reform , Taxpayers , MNGOP
Posted Tuesday, March 5, 2013 1:53 PM
No comments.
Is Gov. Dayton's cigarette tax increase dead?
Last week, I wrote this article to criticize the tactics that Gov. Dayton is employing to sell his cigarette tax increase. In the article, I highlighted the fact that Gov. Dayton was using the tragic death of a young lady's father to sell his cigarette tax increase.
This week, Big Government highlights the disparity in taxation rates between Minnesota and North Dakota. It's a pretty stunning difference:
According to one expert testifying at a House Taxes Committee hearing last week, one reason revenue targets might not be met is that while post-tax hike, Minnesota's cigarette tax would sit at $2.17 per pack, neighboring North Dakota taxes a pack at a mere 44 cents . That means that a bootlegger smuggling cigarettes from North Dakota to Minnesota for illicit sale there could evade $700 in taxes on a U-Haul truck sized shipment.
Retailing associations are fighting Gov. Dayton's proposed cigarette tax increase. Bootleggers are praying for Gov. Dayton's proposed cigarette tax increase because it means big profits for them.
It isn't that retailers like SA or Holiday make tons of money if a person only buys a pack or a carton of cigarettes. It's that these retailers would be denied essential traffic if people changed their buying habits. When people start buying cigarettes through a bootlegger, they don't visit the SA or Holiday store and buy gum, pop, snacks and other high profit items. This op-ed offers a great history-based illustration of what happens when politicians raised the cigarette tax:
By the mid-1950s, official figures show, the sale of legal, tax-paid cigarettes had plunged 20 percent below the national level. Frustrated by the inability to collect the taxes due, the state's chief cigarette tax administrator quipped that "even the attorneys who come into my office are smoking untaxed cigarettes."
The state government's response was to increase enforcement and try to discourage consumers from buying tax-free cigarettes, but nothing worked. In spite of this, lawmakers repeatedly hiked the tax, and by the mid-1970s, Minnesota had one of the highest cigarette excises in the country. Soon illegal cigarettes from as far away as Kentucky and North Carolina were pouring into the state.
That's only part of the story. Here's another part to the story:
The latest series of hikes, which began in 2005, have pushed the per pack tax to $1.58. A 2009 report commissioned by the Department of Revenue found that the state government loses millions of dollars annually to cigarette tax evasion. These losses do not include those incurred by the private sector, such as those resulting from lost sales and increased thefts.
These statistics should illustrate the foolishness of raising the cigarette tax :
- After an effective 31.25 cent per pack increase from 2004 to 2005, the state's foregone revenue increased 66 percent , from $9.3 million to $15.5 million.
- After an effective 46.75 cent per pack increase from 2005 to 2006, the state's foregone revenue increased 103 percent , from $15.5 million to $31.5 million.
- The $31.5 million in revenue lost due to tax evasion in 2006 represented nearly 8 percent of Minnesota's total cigarette tax revenue.
Putting it as simply, the only winners when states raise cigarette taxes are the criminals. That alone should frighten legislators into tabling Gov. Dayton's proposed cigarette tax increase.
Minnesota's retailers would certainly cheer that decision.
Tags: Cigarette Tax , Tax Increase , Bootlegging , Foregone Revenue , Retailers , Tax-Free Cigarettes , Mark Dayton , DFL
Posted Wednesday, March 6, 2013 4:30 AM
Comment 1 by J. Ewing at 06-Mar-13 08:29 AM
What's hilariously stupid is that this same government passes laws based on the idea that cigarette smoking is so terrible for your health that you can't even smoke in your own bar or outdoors in a public park. Yet they won't outright ban this "public health menace" because they take in so much revenue from it. At the bare minimum, they should scrap the cigarette tax and refuse to dirty their hands with the money made from the deadly weed.
Comment 2 by Gretchen at 08-Mar-13 04:46 PM
Who smokes? The rich? No. Studies have shown that lower income persons typically smoke (such as myself). This is just another way for the upper class to tax the lower class which the politicians "swear" they won't do. Riiiiiiiight....
Comment 3 by eric z. at 12-Mar-13 09:16 AM
Gretchen - light up, and die. All the while feeling sorry for yourself. Why not simply quit like any sane person would? IT IS A TAX ON STUPIDITY. (I think they should tax churches too.)
