Joe Doakes from Como Park emails:
In response to the legislature’s anticipated 600% tax increase on beer, I’m starting an express delivery service running between Hudson, Wisconsin and St. Paul. Please post this Want Ad on Shot In The Dark:
“Wanted, young, daring fellows, must be over 18 and expert driver, willing to risk death daily. Orphans preferred.”
Joe Doakes
Como Park
Might just solve that teenage unemployment problem.
The Star Tribune Editorial board, in a piece that reads like Lori Sturdevant, holds forth on the DFL budget proposal, such as it is - and illustrates the Strib’s deep institutional hypocrisy along the way.
The editorial is stupid, hypocritical, and awash in institutional self-interest disguised – like all of Sturdevant’s work – as populist dooo-goodism:
No sales tax on clothing or haircuts. No alcohol tax hike. No income tax increase for 98 percent of filers. On Sunday, after four months of launching a flotilla of tax ideas, the Legislature’s DFL majorities and Gov. Mark Dayton unveiled a final 2014-15 state budget outline that, on the revenue side of the ledger, is more notable for its omissions than its contents.
Well, no. It’s notable for about two billion of its contents. Nowhere in the Strib’s editorial does the number “$38,000,000,000″ occur.
The Strib doesn’t want to give its few readers who actually follow numbers a nasty sticker shock.
There’s plenty to like on the spending side of their balance sheet. The DFL plan pumps an additional $725 million into public education from preschool through graduate school. That’s enough to reverse the deep higher-education cuts of the past two years; ease the squeeze that has some of the state’s public schools operating only four days a week; pay for all-day kindergarten, and offer preschool scholarships to low-income families.
Read: It’s a big kickback to Education Minnesota; they paid good money for that Governor and Legislature, it’s time for them to get their piece of the action.
The plan also includes measures to close a nagging $627 million budget gap, the residue not only of the Great Recession but also of a dozen years of legislative failure to balance the budget in a lasting way.
Further proof that Lori Sturdevant wrote this. Remember 2010?
A Six Billion Dollar Deficit?
The Strib editorial board is rewriting history for the benefit of the smug and the stupid.
But remember – they have their own self-interest at heart:
But the plan’s tax features are a disappointment. They raise revenue in a way that puts Minnesota’s economic competitiveness at risk.
Particularly worrisome is a new marginal tax bracket that will apply to the state’s top 2 percent of incomes. The rate attached to that bracket remains to be set by a House-Senate conference committee, but it is almost certain to be among the nation’s highest, especially after an anticipated temporary surcharge for top earners “blinks on” to get state aid payments to schools back to their normal schedule…While that decision is true to Dayton’s 2010 campaign promises, it comes at an economic price. Making Minnesota an income tax outlier among the states won’t be helpful in attracting and sustaining private-sector investment.
Especially the next round of investors the Strib will need to stave off bankruptcy.
Right?
It gets worse:
In addition, like a bad penny, a bad tax policy idea that disappeared two months ago turned up again Sunday. Applying the state sales tax to some currently untaxed business-to-business purchases will be part of the plan, Senate Majority Leader Tom Bakk announced. He was not specific about which items or services would become taxable, nor about how the revenue thus raised would be used, other than for “significant economic development.”
Oh, well, then. Good enough for me!
The Strib is worried that taxing business to business purchases – which could include advertising, as well as pretty much anything in the supply chain – is going to hit their bottom line. It’s a legitimate worry; businesses of all size, from the Strib all the way down to lil’ ol’ me, are going to see some arbitrary percentage come out of our revenues; we can pass it along and hope that our goods and services continue to get purchased, or we can eat a percentage – 5.5%? 6%? – lopped out of our revenues and try to ride it out.
Regardless of how the money would be used, taxing business inputs is not sound policy. It layers hidden taxes into the cost of goods and services and takes a toll on wages and job creation in the affected industries. Those costs will affect low- and middle-class Minnesotans as surely as a clothing sales tax would. But the spurned clothing tax would have had the virtue of transparency, and could have been offset for low-income earners by a refundable tax credit, as the Senate tax bill provided.
Waaaah.
In for a bad penny, in for a poo-streaked pound, Strib. This is the government that you wanted. You did whatever it took to get this government; you served as an adjunct PR firm for the DFL, you covered up their transgressions, you whinged about “ALEC” while laughing over cocktails with “Alliance for a Better Minnesota”, you did whatever it took to get them into power, and you do your best to cover up the train wreck that is Mark Dayton.
To be sure, businesses will benefit from some of the property tax relief measures that total a hefty $400 million over two years in the DFL plan. But low- and middle-income homeowners and renters ought to be favored as the tax conference committee allocates that sizable sum.
This is Minnesota’s source of information. Good lord.
Where does the Strib think that “relief” comes from?
It’s money that’s redistributed from the parts of the state whose votes the DFL doesn’t need, to the parts whose votes they need to protect.
Who do you suppose that is, Strib?
Republicans have offered no alternative budget plan this session, evidently preferring to stand aside and criticize DFL decisions.
Further proof it’s Sturdevant.
The DFL offered no alternative budget in 2011. The Strib editorial board had not a word to say about it.
They should know that if they scuttle a bonding bill, they will deserve to be seen by this session’s critics as part of the problem.
And the Strib will do its’ level best to make sure they do.
I can not wait for the Strib to go bankrupt again.
The new Vikings stadium has been unveiled.
About a year after $500 million in public money was approved by the Minnesota Legislature for a new Vikings stadium, the curtain was pulled back Monday, May 13, to let the public see what the $975 million facility will look like.
The new design was unveiled at a 90-minute event Monday evening at the Guthrie Theater in Minneapolis.
The building will be asymmetrical and multisided. The roof will slope to ensure snow doesn’t pile up atop it.
It looks like a microwave that fell out of a truck on the freeway.
But at least it’s being paid for by electronic pull tabs oops. It’s going to be paid for out of your taxes.
The least the Strib, WCCO, KFAN and KSTP could do is give away some free tickets, since this is our “present” to them and their long-term viability.
In Scandinavian society – including the parts of it that transplanted themselves to Minnesota, the Dakotas and the U.P. – there’s an aggressive modesty about people; they don’t talk much about their accomplishments; they don’t set themselves out from the crowd much; they take some pains to conceal any gains they’ve had.
Scandinavian writers christened this idea Janteloven – “Jante’s Law“. There are really ten parts to Janteloven:
It’s really 1 through 4 that you seem in small scandinavian towns around the region. When I was a kid, people that you just knew had made it big – the town’s dentist, real estate agent, whatever – took great pains to live in modest houses and drive the same kinds of cars as everyone else. The ones that didn’t – like one of the car dealers, as memory serves? Well, there was gossip.
Which is why Garrison Keillor’s description of Lake Wobegon – a place where all the men are strong, the women are good looking, and the children are above average – is so subtly hilarious. Of course all of them are strong, good looking and blow the curve up – because to single anyone out, or God forbid for anyone to do it themselves, would unleash a torrent of passive-aggressive retribution. It’s easier just to say everyone is the same.
The side effect, of course, is that all “pride” gets displaced to the community.
Kim Crockett of the Center of the American Experiment (which I traditionally abbreviate as “CAX”, but Kim reminds me they prefer “CAE”, which I think is a huge mistake, but whatever) writes (and I’ll add emphasis):
Though we find it more than counterintuitive, there is a serious conversation out there that taxes and regulations do not matter — or that Minnesota does not spend enough on education and health care. I call it the “Lake Wobegon” argument; we are so special that people will keep paying more just to be here.
I’m not sure if anyone at the DFL, with all its Chicago-y ways, ever sat down and said “let’s exploit this state’s dominant culture’s passive-aggressive communitarianism to basically browbeat and shame people into thinking “the community” is always worth whatever it demands”…
…but if they didn’t, I’m not sure what’d be different if they had.
Kim echoes something I say myself:
I think there is something to that—that Minnesota is a special place and that we have more to offer than the average state but we’ve stretched that argument past the breaking point.
I like Minnesota. Two of my grandparents were born here (Park Rapids and Middle River). I’ve lived more than half my life here. Saint Paul is a wonderful place, in a lot of ways.
But…
We demonstrated that the state spends much more on K-12 education, health care and higher education than its peer states in our report “Minnesota Spending 101: Smart Budgeting for an Era of Limits” . This will be accelerated, of course, as we feel the full effects of an Obamacare exchange and expanded Medicare spending—not to mention the massive tax hikes and spending increases headed for the governor’s desk.
…the state is acting like an alcoholic relative; demanding that you cave in to its demands or maybe you never really loved it at all.
And yes, I know, I’m switching pathologies, from peer pressure to addiction.
But they both apply, really; the DFL is like a pushy alcoholic brother in law from Joliet who pushes your scandihoovian buttons to get you to cave in.
“Don’t you love our schools anymore? Or are you more important than the kids are?”
“It’s a beautiful state. Do you think your retirement is worth more than our state parks?”
“We’ve always been progressive, bitch. Don’t get uppity”.
Addiction? Janteloven? It gets hard to keep abusive codependent pathologies straight, after a while.
A groundbreaking new report by the Center of the American Experiment (henceforth CAX) shows what a lot of us are seeing in our own lives, social circles and workplaces: Minnesota sucks, and people are leaving.
Courtesy of the Center of the American Experiment
Says the CAX:
There’s no question that Minnesota’s tax policies directly impact economic growth and opportunity in the state. There is, however, great debate over whether Minnesota’s current tax policy and the proposals being considered in St. Paul promote or harm economic growth. Those who favor a higher tax rate argue Minnesota needs more revenue to fund the education and infrastructure necessary to sustain economic growth. Advocates for lower taxes argue Minnesota needs low rates to make Minnesota an attractive place to invest, work and grow a business.
Like most economic questions, making the direct connection between state tax policy and economic growth is difficult. As William McBride—chief economist at the Tax Foundation—admits, “the economy is sufficiently complex that virtually any theory can find some support in the data.”
And there will, no doubt, be controversy about this report (which you should read). But it’s conclusion (of sorts, with emphasis added):
Though data can deliver mixed messages, data from the Internal Revenue Service (IRS) point to one clear and worrisome fact: Minnesotans and their wealth are moving to Southern and Western states. Between 1995 and 2010, an average of $340 million in income—based on 2010 dollars—moved each year from Minnesota to other states—a movement totaling more than $5 billion over 15 years. The states that on net receive the most Minnesota income tend to be low tax states such as Arizona, Colorado, Florida, Georgia, Nevada, South Dakota, Texas, and Washington.
“But wait!”, someone might interject. “Of course people leave. They retire to someplace warmer!”
But there are five – count ‘em, five (5) – reasons this doesn’t seem to be the case.
Working Stiffs: For starters – would retirees move to Sioux Falls?
First, many of the leading destination cities are economic centers, not retirement centers. Retirees certainly account for a large portion of the people and income leaving Minnesota. Some of the places receiving the largest portion of people and income from Minnesota include retirement destinations like Naples, Fort Meyers, and Scottsdale. But there are a large number of economic centers in the South and the West that are clearly attracting many more workers than retirees. Cities like Atlanta, Seattle, Dallas, Austin, Sioux Falls, and Denver have all gained substantial numbers of people and income from Minnesota…if Florida and Arizona were removed from the list, the income from receiving states would still far outweigh the contributing states.
Working people have joined the retirees, in other words.
You Have To Retire To Be A Retiree: The Great Recession slowed retirement migration nationwide, as people either couldn’t afford to retire, or couldn’t afford to move anywhere warm:
Second, as migration and retirement slowed during the Great Recession, Minnesota continued to lose substantial income to low-tax states in the South and the West that are not the locus of retirement.
The net movement of income to Florida dropped from $149 million in 2008 to $77 million in 2009, the first time Minnesota lost less than $100 million to Florida since 1996. The movement of income to Arizona also dropped substantially. Despite these drops, most of the other top states receiving income from Minnesota showed either no change or a bump in the income received from Minnesota.
Both Texas and Georgia gained more income inboth 2009 and 2010, while states like Colorado, Washington, South Dakota and North Carolina remained in a normal range.
All The Cool Working Kids In Liberal Hellholes Are Doing It: Minnesota isn’t the only high-tax “progressive” cesspool experiencing this problem:
analyses of the movement of income to and from other states show similar patterns of movement from high tax states and to low tax states.
In his book How Money Walks, after analyzing the same IRS data set for the entire country, Travis Brown concludes: “When you look at the mapped data over this period of time an unmistakable pattern emerges: income moved from high-tax states to states with no personal income taxes or lower per capita taxes.”11 In addition, a recent Manhattan Institute report documents the “exodus” from California
http://www.shotinthedark.info/wp/wp-admin/media-upload.php?post_id=36025&TB_iframe=1&width=640&height=607 using the data.12 The authors found, “as a general rule, Californians have tended to flee high taxes for low ones.” Thus, California, a state with a similar tax climate to Minnesota but very different weather, is experiencing similar migration patterns.
Big question there: is Minnesota becoming a cold California, or is Cali becoming a cold Minnesota?
It’s Everywhere: It’s on page 11 of the report (I said go read it, dammit), but I’ll show it to you here:
Courtesy the Center of the American Experiment.
Look at all of your high-tax “progressive” cesspools – New England, New York, Jersey, California? Warm, cold, old and stodgy or young and full of “creative class” hypstrz – they’re all hemorraging people.
It’s The Young Workers, Stupid: The fifth conclusion? Younger workers in their prime earning years are not moving to Minnesota:
The people considering a move tend to be younger and looking for better jobs and economic opportunities. Table 1 [on page 3 of the report]shows a steady decline in the average size of the households moving to Minnesota, dropping from households with 1.94 exemptions per return in 1996 to 1.75 in 2010. This drop suggests that fewer families are choosing to make Minnesota their home.
We’re getting an influx of college students and lonely drifters. Families in their peak earning years? Not so much.
The conclusion? The CAX puts it diplomatically:
The data reviewed in this report show first and foremost that Minnesota is consistently losing the battle to attract people and income to the state. Year after year the state on net loses thousands of people and undreds of millions of dollars. Regardless of how large the loss is, it is a loss which demonstrates Minnesota is not competing well with the rest of the country. That’s a fact that should be worrisome to every Minnesotan.
I don’t need to be diplomatic; the data show us that tough economies and high taxes didn’t even mix in the 2000s, when we had a government that was split between bobbleheaded spendthrift DFLers and responsible Republicans, and we held onto sanity by our fingernails.
Today? Anecdotally?
I can’t tell you the number of middle-class, hard-working, tax-paying people I know who’ve told me to pencil them in for anything happening more than 6-12 months out; they’re looking to move someplace where they aren’t forced to be happy to pay their hard-earned income for a Minnesota that just gets worse and worse.
No news here; the Sequester, like every “school layoff” in every city that isn’t Detroit, is basically the same as everyone’s old alcoholic significant other threatening to kill themselves; an abusive, co-dependent way of browbeating and bullying people into giving in. The “cuts” – really a whiz-in-the-wind reduction of an increase – are designed to gull the gullible and intimidate the weak and dependent.
The FAA Controller furloughs were a great example; the furloughs will save a fraction of the FAA’s consulting budget, or travel budget, or any number of other expendables that don’t directly affect the agency’s mission.
But squeezing the flying public shows the peasants who’s boss.
Joe Doakes from Como Park emails:
Local community celebrations suffer from Obama Administration tax-hike hostage-taking: “Give us the money or the fly-boys get it.”
Note this quote: “Maj. Darrick Lee, spokesman for the Thunderbirds, said a typical season averages about $9.75 million and the Air Force needs to focus its resources now on its mission in Afghanistan.”
Seriously? We’re cutting back airshows all the sudden because we need a lousy $10 million to fight the war in Afghanistan? Dude, we spend that every hour over there and there’s no end in sight.
An entire season of Air Force goodwill (and recruitment advertising) that also directly boosts local economies costs about the same as two Obama vacations; a grant to redesign Southwest Canyon Road in Beaverton, Oregon; or the missing first payment on bankrupt car maker Fisker’s federal Green Energy subsidy loan.
I could understand cutting airshows if the federal government suddenly got Libertarian Fever and cut airshows IN ADDITION to these other boondoggles . . . but the administration shows no sign of fiscal prudence, only political punishment. Longer lines at airport security, laying off air traffic controllers, grounding military flying teams: these are directly aimed at making life miserable for ordinary taxpayers who haven’t demanded higher taxes quickly enough, so they must be punished for it.
Hostage-taking used to be a gangster tactic, now it’s Democrat standard operating procedure. That should tell us something.
Joe Doakes
Spare the rod, spoil the taxpayers.
Remember when Democrats claimed to be for the little guy and against big institutional businesses?
Obama supports the “Marketplace Fairness Act”, which would tax online purchases:
Senators advanced the bill in 74-20 procedural vote on Monday evening, just one vote short of the backing it received in a test vote last month. Twenty-six Republicans joined Democrats in moving forward with the bill.
(Or when Republicans claimed to be pro-business?)
Oh, yeah – both A-Klo and Stuart Smalley voted for the bill.
Major retailers are putting all their lobbying muscle behind the legislation, arguing it would close an unfair loophole that benefits online merchants over brick-and-mortar stores. The National Retail Federation, which represents chains such as Best Buy, Macy’s and J.C. Penney, and the Retail Industry Leaders Association (RILA), which counts Target and others among its membership, announced it would score lawmakers’ votes.
The bill would also make it possible for states to tax financial transactions – trades for your IRA, moving money around in your 401K and the like.
But signs of trouble for the bill also emerged as Wall Street groups urged the Senate to slow down and eBay began marshalling its users in a massive campaign to kill it.
The Securities Industry and Financial Markets Association and the Financial Services Roundtable said the measure could pave the way for financial transaction taxes on the state level, an idea that Wall Street and its supporters fiercely oppose.
“A transaction tax on financial services products will hurt retail investors, retired Americans, and small businesses, effectively making it more expensive for them to invest and plan for the long-term. Without hearings, these implications and others will not be properly addressed” [said Scott Talbott, senior VP of public policy at the Securities Industry and Financial Markets Association and the Financial Services Roundtable]
Democrats (and some Republicans); dragging the parts of the economy that work down into the same pit of suck that the rest of the economy is in.
It’s like Easter for Democrats.
Joe Doakes from Como Park writes:
From the March 19, 2013 Pioneer Press article on Democrats’ e-bingo gamble,
“As of late February, budget planners were forecasting about $1.8 million in tax revenue from charitable gambling in fiscal year 2013 for use on the stadium. Estimates last fall had been about $15 million higher, Massman said.”
Democrats planned to bring in $15 million to pay for the Vikings stadium, but we’re bringing in less than $2 million? What a blunder!
Who could have foreseen it?
Joe Doakes
Como Park
Oh, don’t be silly. Blogs don’t cover news.
I got this via email today from a regular correspondent who works for a state agency; I’ll add emphasis to the key parts:
”A friend of mine at [another state agency] told me about the hype and reality of his situation.”
“The national association to which the state agency is affiliated with has sent out a series of communications intended to raise anxiety about sequestration. The national association declares that almost 1 million vulnerable Americans will lose their health care services due to sequestration. The actual effect on my friend’s local agency is that their federal financial allocation will drop by 4%. This drop is after increases totaling almost one third more in 2013 compared to 2008. The actual amount of the sequestration cut can be absorbed by cutting the local agency’s travel budget by about 40%. The largest cuts at the national level will be to reduce the expansion of the program, not cuts to existing clients.”
Guesstimating the net effect in federal dollars on this state agency; a 4% reduction in aid that’s risen 33-odd% in four years takes the agency back to, er, August of 2012.
Once upon a time P. J. O’Rourke said that this sort of budgeting – “Baseline Budgeting”, where all increases and decreases are relative to the previous budget – allows both sides to look at a budget that reduces an increase, claim simultaneously that the budget increases spending and cuts spending, and both be telling the truth and lying.
Anyone who “survived” the 2011 “government shutdown” recognizes this sort of ofay alarmism.
Hopefully a majority of the rest of the country does, too.
If someone as dense as Maxine Waters were a Republican…:
…oh, why bother. For every example of a dumb Republican hounded from office by the Democrats’ “Praetorian Guard” media, there are several Democrats who are worse, and rule on in splendid invincible density, forever and ever, amen.
…that raising taxes in a recession isn’t face-palmingly stupid:
“In case you haven’t seen a sales report these days, February (month-to-date) sales are a total disaster,” wrote Murray in a February 12 email to executives. “The worst start to a month I have seen in my (about) 7 years with the company.”
The recent hike in payroll taxes is dragging down sales for discount retailers like Wal-Mart. With less disposable cash in their wallets, lower-income shoppers have less to spend.
The bad news comes on the heels of a lackluster January for the major retailer.
“Have you ever had one of those weeks where your best-prepared plans weren’t good enough to accomplish everything you set out to do?” wrote Walmart Vice President for U.S. Replenishment Cameron Geiger in a February 1 email to Walmart executives. “Well, we just had one of those weeks here at Walmart U.S. Where are all the customers? And where’s their money?”
If we – the “middle class” – have 5% less money between payroll taxes and Obamacare, then that’s 5% less to spend at Walmart. Or Patagonia, or MPR’s pledge drive, or what have you.
Most of us know this.
Democrats in DC and Saint Paul, it seems, do not.
Even some DFLers – the thin film of them that actually have to manage things in the private sector – are figuring it out.
This piece has made the rounds; it’s from the San Fran Chronicle, in a piece that gurgitates a whooooole lotta Minnesota myths:
“We’re screwed,” [Printing company owner Dik] Bolger said, if the tax goes through. His 79-year-old company competes nationwide and overseas for work with major brands like Chanel. “If you’re bidding for a $100,000 job on a national basis and tax expenses push you a couple of percent higher, then I’m not competitive.”
And I’m hearing this from businesspeople – some political, some not, and mostly off the record – all over the place.
For generations, Minnesotans lived out the progressive argument that high taxes and high services were what gave the state its fabled quality of life.
One thing Minnesota Democrats never, ever get; the “Minnesota Miracle” – creating a high-tax, “high-service” system that actually prospers – depends on several factors:
These factors – especially the whole “only economy left in the world that hasn’t been bombed into rubble, taking nearly 30 years to get back up to speed” bit – are unlikely to be repeated anytime soon, or so we can hope.
But the patience of business owners is being tried more than ever, as Dayton and the Democrats who now control the Capitol mull a menu of tax increases that would primarily hit company ledgers — just as most states are going the opposite way.
Those “company ledgers” include mine.
The piece slathers on the Minnesota Myth – that “high-service” translates into high quality of life for everyone:
Dayton wants the new money to eliminate a $1.1 billion state budget deficit. He also wants more for public schools and colleges, job-creation programs and low-income medical assistance. He’s arguing that such amenities are what perennially put the state near the top of livability lists.
“I’ve heard this for 30 years and I’m not insensitive to it,” Dayton said of the argument that high taxes make businesses look elsewhere. However, “I say we’re not the lowest-taxed state, we’re the best value for people’s taxes.” Minnesotans try not to scoff as they contrast the state’s attributes with the likes of its more down-market neighbors. Minneapolis’ bustling downtown Nicollet Mall, the Twin Cities’ array of theaters and first-class museums, and the state’s expansive parkland and its 19 Fortune 500 company headquarters — the second-most per capita in the country_are what make talented people want to be here, they said.
Make no mistake about it; Minnesota is a great place – if you’ve got yours. If you’re already a CEO – or a highly-paid non-profit executive, or government PR consultant, or anyone that’s already made your score – then a day of shopping and theatre downtown after a long day in your Fortune 500 office is mighty nice!
But for the people who get laid off because their companies are now 5.5% less competitive? For the companies that relocate out of state because of the newly-ugly tax climate? They won’t be shopping on Nicollet Mall or going to the Guthrie.
It’s no coincidence that Minnesota’s unemployment rate is lower than Wisconsin’s (5.5 percent vs. 6.6 percent in December) and its per capita income higher ($44,560 vs. $39,575).
This is one of the arguments that the DFL’s been floating among low-information voters lately. Wisconsin, addled by a more virulent strain of “progressivism” even longer than Minnesota, and stuck between two larger economies, lagged Minnesota for a generation or two.
But what’s happened lately? We’ll go through that next week, hopefully.
The Minnesota DFL is clinging to the myths, and hoping they continue to fool enough low-information voters to keep them in office.
———-
The piece should end there. But I couldn’t resist this next bit:
“What’s real is that quality of life is a decision-maker for the big players,” says Democratic Rep. Alice Hausman.
What “executive” wouldn’t relish a chance to play hooky at the Ordway on a tough day at the office?
…to paraphrase Albert Einstein, is to keep trying to use taxes to engineer society even when you know it doesn’t work.
Last month, we talked about Governor Messinger’s Dayton’s plan to jack up cigarette taxes by a buck a pack. Raising cigarette taxes never works; revenues plummet because people avoid the taxes the best they can, and if taxes get high enough they switch to the inevitable black market, and even the purported health benefits tend to stall once the casual smokers get priced out of the market. And, for all the DFL’s palaver about progressivism, cigarette taxes are the most regressive tax there is.
So what could be better than Governor Messinger’s Dayton’s $.94/pack hike?
Ann Lenczewski’s proposed $2.83 per pack – up $1.60 from the current $1.23 in total state taxes – is like Messinger’s Dayton’s proposed hike, only more so.
Kim Crockett from the Center of the American Experiment, quoted in the left-leaning Daily Planet:
But the taxes are seen as regressive — meaning they affect a larger share from those least able to pay, and, according Kim Crockett, chief operating officer for the Center of the American Experiment, the goals of decreasing smoking and increasing revenue can sometimes conflict.
She cautioned against raising the price of cigarettes to the point where there are unintended consequences. She said the state could expect to see more smuggling of the product — casual smuggling by those who cross state lines to purchase the product if it is cheaper, but also commercial smuggling by large-scale operators bringing the product to the state for sale.
“This undermines both the revenue goals and the health goals of higher cigarette taxes,” she said. Additionally, she questioned the anticipated revenue projections.
The DFL are acting like spoiled teenagers who got the car taken away from them for misbehaving with it – and finally got it back, and are acting like now they’re really gonna stick it to Mom and Dad.
First things first: Charlie Quimby of “Growth and Justice” and Dave Mindeman of MnpACT are two of a small, select set of Minnesota liberal bloggers who needn’t be under police surveillance or at the very least restraining orders. I’m just giving credit where it’s due (although the idea that a group can be named “Growth and Justice” yet still stand for neither is just a tad bemusing).
But over this past week, both of them assailed Rep. Pat Garofalo’s statement on this past week’s “TPT Almanac” program; the Lakeville Republican claimed, in what struck me as a bit of hyperbole, that the broadening of the state’s sales tax to cover clothing will “destroy” border communities like Moorhead.
Always on the lookout for hyperbole to dissect, Mindeman and Quimby were on the job pronto.
Quimby was – as is his unfortunate wont – dismissive, in a post subtitled “Do We Believe Our Lying Eyes?”
Back in 2007 when Growth & Justice was presenting its Invest for Real Prosperity tax proposals to the legislature, I recall a member waxing nostalgically about his parents hauling the family across the North Dakota border to buy untaxed clothing in Minnesota.
The point of his anecdote was that if Minnesota lowered its sales tax and broadened its tax base—as economists recommend—this lucrative cross-border school clothing traffic would dry up, with terrible consequences for Minnesota’s border city retailers.
We’re hearing a version of the same tale…This week, Rep. Pat Garofalo objected on TPT’s Almanac: At the Capitol. He reported that a North Dakota Democrat was proposing eliminating the state’s tax on clothing as a form of tax relief.
“Retail businesses in border communities like Moorhead will be destroyed,” Garofalo said, attracting blogger Dave Mindeman’s skeptical response:
Mindeman interspersed some facts with the snark (which is to his style what dismissal is to Quimby’s) in his piece, noting – correctly – that North Dakota has a 5% sales tax, onto which Grand Forks and Fargo lard 2% in city sales taxes.
Oh my God….how would Minnesota compete?…Garofalo loves that flaming rhetoric doesn’t he?
Fact: North Dakota sales tax is currently 5.0%. Fargo, ND which is the booming ND metropolis across the river from Moorhead adds a 2% city tax. So here is the facts. Under Dayton’s tax proposal, Moorhead (which adds no city tax) would be 5.5%. Fargo would charge 7.0% Clothing may be exempt in the future, but Moorhead will still have clothing under $100 exempt as well.
And like most DFLers, Mindeman, like Quimby, can’t resist taking a homer shot at the Dakotas:
But let’s suppose North Dakota finally drops its state clothing tax just when the gap with Minnesota is closing.
Then what? Will Minnesota border towns really suffer? Were North Dakota retailers in the thriving cities of Fargo and Grand Forks suffering in silence all these years?
To which Quimby assents – with, to be fair, an actual study with real numbers:
As the Minnesota legislator said in that 2007 hearing, should I believe you or my lying eyes?…Looking at the literature studying economic activity in response to sales tax rates, I found research that supports the following points:
Response to differences in the sales tax depends on proximity of border communities. In other words, the farther you have to drive to avoid the tax, the less likely you are to do so.
How much does distance matter? A 2010 Utah study of local option sales taxes PDF* that investigated distance as a variable found increasing the tax rate lowers taxable sales (all else held equal) when there is a jurisdiction with a lower tax rate within 5 km, or about three miles. The effect disappears altogether within about 40 miles. This is to be expected for low-cost goods and everyday commodities. But it also appears to hold for expensive major purchases such as new or used automobiles.
All of that may be true.
But the effects of an individual tax like the Sales Tax, and its nuts ‘n bolts comparison with other sales taxes, while potentially interesting and certainly economics-class-fodder, are the trees that help you miss the forest.
For the real comparison between the states’ tax burdens – not just sales taxes, mind you, but taxes across the board – you need to ask yourself a key question:
“What did I see last time I went to the Moorhead/Fargo area?” Or you could fill in the “East Grand Forks / Grand Forks area”, or the “Breckenridge / Wahpeton” area, or for that matter the “Worthington/Sioux Falls” metro area?
For starters, you’d know they’re called “Fargo/Moorhead”, and “Grand Forks/East Grand Forks”, “Wahpeton/Breckenridge” and “Sioux Falls”. Because in every case, the North/South Dakota side is where the action is.
And it’s not just force of habit; it’s not even close. The Minnesota sides of each of these metro areas (or clusters, in the case of Wop/Breck) are sleepy, moribund and dismal out of all proportion to their North Dakota neighbors. They’re not competitors in any meaningful way. They are all sleepy little bedroom communities with highway exits; whatever commerce, dynamism and action is happening in the area is happening west of the Red (or the Bois de Sioux, or County 17, as the case may be).
Forty years of wide tax disparity – Minnesota has the #7 overall tax burden in the US, while North and South Dakota are 35 and 49, respectively) has left a clear choice to all of those places; move west, and keep more of what you have. The choice was more nuanced, of course, 40 years ago – when North Dakota was a sleepy agrarian backwater. Today, with my home state an economic dynamo in both energy and technology, things are a little clearer-cut. And at any rate – as noted by Quimby and Mindeman – fluctuations in the sales tax, or any individual tax, are background noise to the larger effect of decades of disparity; the Dakotas have better business climates; while the western 3/4 of both states are limited by their sparse populations (which is why working on the rigs out in the Bakken pays so very very well), but Fargo, Sioux Falls and Grand Forks are all well-developed cities with young, highly-educated populations and, at least in North Dakota, K-12 schools that are as good as or better than those in Minnesota.
So once you take a step back and stop the pointillistic crabbling about this remark or that individual tax rate, you see that the real issue is the long-term effects overall tax burdens have. As the Dakotas prosper more generally and gain more people and – as seems to be their goal – turn more of that prosperity into tax relief, that disparity is only going to get starker.
Put briefly – the reforms of the sales tax won’t destroy Moorhead, because tax policies took care of that forty years ago. There’s really not that much to destroy. It’d be like harming business in Saint Anthony compared to Minneapolis; who’d know?
So here’s another question: Up until 2 years ago, Wisconsin was addled by governments more dementedly “progressive”, as a rule, than ours. That changed in 2010, right about the time Minnesota seemed to have some hope of shucking off some more of the dross of DFL legislative control. Now, as NPR noted last week – in a report I’ll be going over later this week – Minnesota’s economy is stronger as a whole than Wisconsin’s. But the improvement in Wisconsin since 2008 is dramatic;it’s improving fast, bouncing back from decades of neo-socialist perfidy. What’s going to happen in Minnesota?
What do you think? We’re raising taxes in the middle of a recession! What happened in California, Illinois and France?
That said – we won’t know what’s going to happen until things tamp down for a while. Will Minnesota’s government remain the shiny toy of Alida Messinger’s band of plutocrat dabblers and union fixers? Will Republicans retain control in Wisconsin? If so, give it a few years. Then we’ll check back.
As to Fargo versus Moorhead? That train left the station decades ago. Changing the sales tax one way or another is just bouncing the rubble, as it were.
Minnesota newspapers, largely, supported Governor Messinger Dayton and the DFL. They largely not only bought the “Alliance For A Better Minnesota’s” bill of goods hook line and sinker, but most of them worked tirelessly to propagate it, and to squelch dissent from it.
They studiously avoided, almost completely, any reporting that would have impeded the DFL’s rise to power.
The Minnesota media, at large, were among the DFL’s most valuable players this past two electoral cycles. At the highest levels - the Strib, the PiPress, and at least the programming arm of MPR – they serve as the DFL’s Praetorian Guard.
But now? Now that the governor is tacking 5.5% sales taxes (for starters) onto print services, advertising and retail newspaper sales?
Business groups and retailers complain that the proposal would cost jobs. As he spoke to the Minnesota Newspaper Association, several editors and newspaper owners complained that a sales tax on newspapers would hurt their industry.
Tom West, the managing editor of the Morrison County Record in Little Falls, spoke about his concerns during a question and answer session.
“We are the ones who cover local government and state government, and we are wondering why you would think it would be a good idea to have less information about government and what government is up to,” West said.
(Cynical answer: “Because you’ve served your purpose”. See also The Minnesota Independent).
(Slightly less cynical answer: “While your contributions to DFL hegemony were vital, you don’t have the same political clout as AFSCME, the SEIU or MPR).
(Cynical and partisan but realistic answer: “How about not just “covering local government”, but turnin a critical eye on the DFL? For once?”)
Others said that expanding the sales tax to newspaper ink, paper and advertising would result in job losses. Dayton said he understood the concern but did not back away from his plan.
Job losses only matter if they’re union.
Small papers aren’t union.
Big papers are – and we’ll see what happens there.
As to the rest of you newspapers? You got the government you mostly worked for, largely shilled for, and for the most part operated as in-the-bag PR agents for. Most of your editorial stances praised Dayton and the DFL’s return to power.
So now you’re saying you’re not Happy To Pay For A Better Minnesota?
Suck it.
BONUS QUESTION FOR DFLers: What do you think happens when you tack 5.5% onto the price of something?
All other things being equal, people buy 5.5% less of it.
Ponder losing 5.5% of your business overnight. Ponder hard.
While the Minnesota Bar Association is officially non-partisan, most “Trial Lawyers” support the DFL; “Trial Lawyers’” political giving runs about 11-1 for the Democrats, nationwide.
In other words, like most liberals, they’re all for taxes…that affect other people.
But Governor Messinger’s Dayton’s new budget? That’s different:
Today Gov. Dayton unveiled a budget plan that includes a sales tax on legal services. If the proposal becomes law, Minnesota would become only the fourth state to tax legal services. The Minnesota State Bar Association strongly opposes taxing Minnesota citizens and businesses that need legal advice to plan for their futures and protect themselves.
Robert Enger, a legal aid attorney from Bemidji and president of the Minnesota State Bar Association, refers to a tax on consumers of legal services as a “misery tax.” Individuals and families often need to hire lawyers when they are vulnerable and suffering; such as a victim of the economy filing for bankruptcy, a family facing foreclosure, or an innocent victim paralyzed by a drunk driver. A sales tax on legal services would push citizens to either forego their legal rights or attempt to represent themselves in the complex justice system. Minnesota’s court filing fees are among the highest in the nation, which creates an access to justice problem that will only be exacerbated by taxing legal services.
A 5.5 percent sales tax on lawyers means 5.5 percent fewer people will hire lawyers.
The overwhelming majority of states don’t tax legal services because it is widely considered poor public policy and economically damaging.
(Note: that’s true of every good or service. But let’s not digress)
Business will be burdened with significant additional costs, and the tax will be especially unfair to small businesses. Corporations large enough to employ lawyers will avoid the sales tax, while smaller businesses will have to pay. Businesses needing legal assistance to expand or locate in Minnesota may choose to do go elsewhere, and Minnesota law firms with national and international practices will have every incentive to relocate attorneys and staff to one of the many states that do not tax legal services.
It’s not just that lawyers are having trouble – although even in good times, Minnesota creates about a third as may lawyer jobs as it does law school graduates.
It’s that when a regular schnook does need a lawyer, it’s usually a stressful situation; it’s already hideously expensive. And if you need the lawyer to fight a big corporation or any level of government, you’re already at a disadvantage; Governor Messinger’s Daytons’ plan will leave you at a 5.5% worse disadvantage.
To which liberals – in this case, a west-metro DFLer on Twitter – say “Let them eat cake!”:
@mitchpberg @patkessler middle class can go pro se if not poor enough for pub defender & too cheap for atty. Thousands are pro se.
— Sue Lantto (@SueLantto) January 23, 2013
I guess that settles that, then!
Joe Doakes from Como Park emails:
As our “leaders” debate how to solve the fiscal cliff, the President seems intent on making sure the rich pay most of it.
Let me just note some of the “tax the rich” schemes that already have been tried and found to be failures at best, counterproductive at worst: Window tax,Brick tax, Wallpaper tax,Hearth tax, and Yacht tax.
Look, here’s the deal: rich people are rich, they’re not stupid. Jack tax rates too high and they’ll simply move and take their money with them.
In every one of these schemes, the rich altered their behavior to avoid the taxes, the poor didn’t pay taxes anyway, so the burden fell squarely on the middle class – too “rich” to be exempt, too poor to escape.
President Obama is a Harvard scholar. His advisors are the smartest in the world. He cannot be unaware of history. Why is he intent on repeating it?
Why are Republicans even thinking about letting him repeat it?
Joe Doakes
Como Park
Because some GOP leaders are under the impression that you get points for losing gracefully.
The answer? “Gérard Depardieu est Jean Galt!”
Few Frenchmen are more recognizable at home and abroad than the movie star Gerard Depardieu. Last week, Depardieu caused a great controversy in his native land by moving to Belgium – partly to avoid the 75 percent income tax on the wealthy that was introduced by the socialist President of France,
What was it that Gandhi said? “First they ignore you, then they mock you, then you win?”
Joe Doakes from Como Park emails:
The hype around the “fiscal cliff” reminds me of the hype around Y2K which supports my suspicion that’s all it is – hype.
If the GOP fails to cave in, we automatically enact the spending cuts adopted by John Kerry’s Super Committee and cut the monthly shortfall in half. We don’t cut the Budget in half, just the amount we’re Short each month.
We’ll still be spending ourselves into bankruptcy, only not as fast. That should be okay with Democrats, shouldn’t it? Incrementalism, and all that?
Joe Doakes
Como park
Like most of the Democrat (and DFL) agenda, it’s there to gull the gullible…
…and draw attention away from the real problem; the upcoming debt and entitlement crunches.
Hey, how about that upcoming royal baby? Lindsay Lohan’s sex life? X-Factor?
Anyone?
Governor Dayton’s transportation advisors are advocating taxing the crap out of gasoline, and jamming people onto buses and trains.
The recommendations include two ways to raise $15.2 billion through a higher gas tax — an upfront hike of 10 cents per gallon followed by annual 1.5-cent increases for 19 years, or a series of 3.5-cent increases over five years with 1.5-cent increases for 15 years afterward. The state gas tax currently sits at 28.5 cents per gallon, including a 3.5-cent surcharge.
That’s forty cents a gallon. So far.
And when Democrats see Money Pits, what’s their first urge?
Fill them with (our, taxpayer’s) money!
Another $4 billion for transit would come from increasing the sales tax in five Twin Cities counties by a half percentage point, or a nickel on a $10 purchase. Raising vehicle license tab fees roughly 10 percent would bring in another $1.1 billion.
Let’s make sure we’re clear on this: this is a removal of five billion dollars from productive use in this state’s economy, to build more “light rail” to run from Minneapolis to Eden Prairie, from Minneapolis through the Brooklyns, from Minneapolis to wherever people aren’t and don’t currently want to go.
Democrats around money are like pit bulls around hamburger:
The 19-member group led by Transportation Commissioner Tom Sorel picked the costliest of three options it studied.
What do us conservatives always say? ”Elections have results”.
And one of the results of this past two elections is that Scott Dibble is now creating tax policy…:
The report comes as the Democratic governor is preparing to unveil a tax overhaul after pushing for years to raise income taxes on top earners. It’s unclear how the array of transportation taxes will fit into his plan. Democrats will take over both houses of the Minnesota Legislature in January, creating an opening for tax increases after years of Republican resistance.
“My sense is the governor would very, very much like to get us back in a posture of making these needed and key investments,” said Sen. Scott Dibble, a Minneapolis Democrat who served on the advisory committee and will head the Senate Transportation and Public Safety Division.
…which is a little like putting Kim Kardashian in charge of the Department Of Sleazy Guys And Video Cameras.
UPDATE: Dave Thul in the comments notes that the GOP should let Governor Messinger Dayton and the DFL run this straight through the legislature. I agree; let them have their names on the votes. And any Republican that votes for it, to give the DFL “bipartisan” cover on this stupid idea, should get primaried back to the stone age.
Here’s the lefty playbook when it comes to exacting more tribute from the people:
It’s the way a petulant teenager acts when they don’t get their way.
It’s the choice Saint Paul Public Schools superintendent Valeria Silva has given the voters of Saint Paul.
And it’s worse than that. Greg Copeland, chair of “Vote NO 30% Levy Tax Hike!”, writes:
“The St. Paul School Board majority, following the recommendation of the Superintendent, showed so little respect for St. Paul Voters that it chose to combine the expiring 2006 Levy Renewal with a 30% Levy Property Tax Hike in a single ballot question, rather than giving voters an open choice of two questions, as it easily could have done; one to renew and another on the proposed 30% levy property tax increase.”, said Copeland.
There are so many angles to this story.
Blackboard Fodder: Teachers union members are among the most reliable Democrat voters out there.
But when every single bureaucracy that emjploys them uses this exact same tactic – using their jobs as bargaining chips, and never, ever touching the admin jobs that are the district’s greatest sacred cow – I have to wonder; don’t teachers ever get tired of it?
Do they all suffer from Stockholm Syndrome?
Mush, Sled Dogs!: I’ve been a Saint Paul taxpayer for a quarter of an endless freaking century now. Near as I can remember, the Saint Paul Public Schools have gotten every single levy increase they’ve ever asked for. And yet the schools never get anything but worse.
The district is under the impression that the few remaining businesses and residents that actually pay taxes are like ATMs with no limit.
We are not.
In the immortal words of Little Steven, “I’m getting tired of paying for sh*t I never get / Somebody promised justice, and they ain’t delivered yet”.
Subsidizing Failure: And yet the schools get worse and worse. The efflux of families, especially lower-income and immigrant families, to charter, parochial and suburban schools has ripped a minimum of 12% out of the district’s population (and many of the families are putting their money where their mouths are, and leaving the city).
And while some of the marquee schools – the ones that serve the white upper-middle class children of the more-connected government workers in Saint Anthony Park and Desnoyer and Highland are more or less adequate and make most of the right noises on command, the SPPS has among the worst achievement gaps in the US.
The Saint Paul Public School District is a failed venture. Since it is a wholly-owned arm of the St. Paul DFL, it is in every way a symptom of the failure of one-party rule in Saint Paul. If it were a business, it would go out of business. If it were a regulated business, it would be shut down by the government. If it were a charter school, the Department of Education would padlock it and MN2020 would wrinkle its organization nose and write a snarky “white paper” on what a crappy idea it was.
But Superintendent Silva and the School Board – loyal DFLers all – are doing what they do every time the levy comes up; holding guns to the teachers’ heads, and saying “pay up or the teachers get it”.
Call it “Valeria’s Choice”.
The people of Saint Paul need to send our worthless, incompetent school district a message; do a better job, or (heh) get out of the way and give the job to someone who can.
The media – in carrying out their role as Obama’s Praetorian Guard – has been doing its damnedest to try to paint Romney’s “47%” remark as a huge gaffe.
But Mitt was right; 47% of the people don’t pay taxes. And in some cases – the poor – there may be a reason for this.
The lefty and media (ptr) came out with all sorts of rationalizations and tu quoques -
But whatever the qualifications and rationalizations, whatever the reasons for some and the outrages of others, the fact remains that this society can not survive with, soon, less than half of its people paying in.
Romney should not back off of this statement. His campaign has been far too timid lately; while for about a week or two after the Ryan selection he was cooking with gas, rife with promise that this nation could finally have The Big Conversation it’s needed for at least a generation (the one that Tip O’Neill blocked thirty years ago), he’s been running a campaign only a weasel consultant could love since then.
We need to reform entitlements. We need an America where everyone has some skin in the game. Above all, we need a nation that doesn’t believe government is something we “belong to”, but rather something we hire to do some distasteful jobs.
I’ve been a huge Dinesh D’Souza fan since I read his Reagan: How An Ordinary Man Became An Extraordinary President over a decade ago; it may have been the best Reagan bio ever.
And I got a chance to see 2016 over the weekend. It didn’t disappoint:
The movie’s thesis is…
(Spoiler Alert: I’m going to talk spoilers below the jump, although to be fair I think much of what’s in the movie has been in the public domain; this is just the first high-profile place I’ve seen it all collected into one coherent thesis)
Obamacare won’t raise taxes on the middle class!
Just on big bad businesses, usually owned by “the 1%”!
And they’ll just eat those taxes, right?
Well, no – in a number of senses, you will.
