Archive for the 'Taxes' Category

Chanting Points Memo: Disintegration

Monday, January 31st, 2011

Remember last session’s’ spending debate?

When the DFL – which had a crushing majority in the Minnesota State House, pushed through a massive $435 million dollar tax hike.

They squeedged the increase through on a couple of very close votes; the final vote in the House was 71-63.  Bear in mind that the DFL controlled 87 seats up until this month.  Tha’ts 87/47 in favor of the DFL; almost, but not quite, veto-proof.

And in the Minnesota Senate?  Much worse; the DFL  had a 47-21 veto-proof majority in the Senate.

So when it came time for up-and-down votes on the Dems’ pet tax proposal, you’d think – given not only the DFL’s fabled unity, but the power of the mandate with which they’d been sent to Saint Paul to refudiate the Pawlenty government the previous fall, that the votes in favor of the bill might have been 87/47 in the House (or maybe 93/44, given the power of the “moderate Republicans”), and 47/21 in the Senate.

To have performed any worse would certainly have been a sign that the DFL was splintering under the pressure of working with their mandate.

Right?

Well, of course it didn’t work out that way.  The DFL carried the bill through the House by 71.  Sixteen DFLers crossed over to vote against the bill.

And before that?  In an epic bit of political theater, the Senate had to do all but send the Mounties out to find Tarryl Clark to drag her into the Senate chamber to get the bill passed by one vote.  A total of twelve DFL senators crossed over to vote against the bill.

And this, at the height of the post-Obama afterglow.  When people seemed Happy To Pay For A Better Minnesota.  Less than a month after the first appearance of the Tea Party, when it still seemed (because the media was trying to paint it)  like a fringe-y little brushfire.

Quiz Question:  Did this loss of 16 votes in the House, and 12 in the Senate, mean that…:

a) The DFL was fragmenting?: The DFL legislators saw the Tea Party rallies, three weeks early, anticipated the upcoming summer of anger at the Obamacare Town Halls, and were consumed with a wave of originalist fervor, which Larry Pogemiller and Margaret Anderson Kelliher managed to hold together by only the barest of margins, in an epic feat of legislative engineering?

b) That was the plan?: Some DFLers from outstate and outer-tier suburban districts felt nervous about piling taxes on their already-disgruntling districts; they made their reservations known to their caucus’  House and Senate leadership, which did the math – not only for the bill, but for the next round of elections.  They figured out how many votes were safe, not only for the bill, but for future elections; they realized that some DFLers  – especially some of the ones that had just won squeaker elections in the previous two cycles  in usually-GOP-districts – were going to need to be able to deny association with the bill to their voters.  The did the math, and made sure they had the votes to both pass the bills and give their more potentially-vulnerable members the out they knew they were going to need?

Answer? B, mostly; of course there were DFLers who had objections – but for the most part,notwithstanding the media’s push to impart drama on the proceedings,  the votes came as no surprise to anyone in legislative leadership.

Of course, drama sells newspapers.

Last week, the House voted on the GOP’s billion dollar budget cut bill.  And the regional DFL and media (pardon the redundancy) hopped around like a toddler who’d just made a good pants – because four Republicans broke with the GOP.

Doug Grow wrote about it at the Minnpost:

Republican legislative leaders quickly are learning that it’s easier to hold the caucus together when they’re in the minority rather than the majority.

On the first big economic vote of the still-new session, four Republicans joined a united DFL minority in opposing a $1 billion budget-cutting bill that Republican leadership claimed was the “easy part” of cutting into the state’s $6.2 billion deficit.

Well, actually, there were 3.5 Republicans joining the DFL in opposing the bill. Freshman Rep. Rich Murray voted for the budget cuts but then, after voting had closed, switched to vote against the measure, which passed 68-63.

The biggest Republican defector was freshman Rep. King Banaian a St. Cloud State University economics professor and a conservative blogger.

Just a couple of weeks ago, beaming House Republican leaders described Banaian as the caucus’s “Wayne Gretzky” on economic issues.

For non-hockey followers, that means that Banaian was being described as the majority’s economics superstar, its guru, its leader.

Now, right out of the box he said “no” to the first Republican plan.

What happened?

What would Doug Grow suppose happened?

Is it that…:

a) The GOP majority is falling apart, with members – including my radio colleague Banaian, who had heretofore authored and sponsored HF2, a step toward instituting Zero-Based Budgeting, one of the most transformatively fiscally-conservative ideas – already souring on fiscal conservatism, to the immense surprise and shock of the MNGOP’s leadership?  Or is it…:

b) Those devilish details that caused the DFL’s leadership to let 16 Reps and 12 Senators seek a little cover, after making sure that they had the votes to pass their tax bill two years earlier?   Details that had been discussed between members and leadership for weeks – even since before the session began?   Details that made the GOP’s leadership do the math, and figure that they could afford to let three potentially-vulnerable Representatives flake off and still leave plenty of votes to pass the vital bill?

What do you think?

I don’t talk with a lot of legislators, so it’s not like I know any details.  But do you suppose that Banaian – who represents an area that includes Saint Cloud State University, which already went through some serious budget cuts, and which would take more with the proposed bill, and who won his seat by 13 votes, the closest margin of victory in the entire United States last November – just might have had a talk or two with Kurt Zellers, who might have gone over the votes one way or the other, and rationed out a few “no” votes to GOPers that might need ’em?

What do you think?

When the DFL needs heavy buckets hauled from the well to the corral, Doug Grow is always there:

Reality crossed paths with rhetoric…

…If Republican leadership can’t hold its caucus together on this first budget vote, imagine how difficult it will be to find conformity as it attempts to cut the remaining $5.2 billion with a cuts-only approach.

Grow taking part in the DFL’s strategy in the legislature; trying to paint the GOP majority as divided in the run-up to Mark Dayton – the weakest governor in recent memory – releasing a budget that is sure to be a big tax-clogged monstrosity.  They are trying to find a wedge to pound in between the new majority and the newly-minted activists who put them into office.

To some extent, it’s drawn some blood; a few conservative activists are making disgruntled noises.

We’ll talk about that later on here.

The point being this:  relax, everyone.  The procedure of getting votes lined up, and handing out some exemptions from party  mandates for purposes of planning for future elections, is the very definition of  “politics as usual”, and not even in a necessarily bad way.

The larger point is that the agenda is moving ahead – and needs to, in advance of Dayton dropping his fiscal duke in two weeks.

More on the big picture later today or tomorrow.

Don’t Let The Door Hit You

Wednesday, January 26th, 2011

Bright and early this morning on MPR, I heard Cathy Wurzer talking with former MNCD8 Representative Jim Oberstar.

It goes without saying the guy became a slippery wonk over his five decades in DC.

But it was his closing line that stuck with me; it should go up there with Cy Thao’s classic “When you guys win,  you get to keep your money.  When we win, we take your money“, or Larry Pogemiller’s “It’s silly to think people can spend their money better than government can“.

Asked about the criticisms he’d taken as for being seen as a porkmonger, he replied (I’m paraphrasing as closely as I can; I’ll try to get the audio after work today):

To all of them, I say – don’t drive on Highway 17.  Don’t drive on Highway 8. Don’t drive on Highway 61.  Don’t drive on [this bridge], or [that bridge], or [some other bridge].  Don’t drive on any of the things you criticized.  Follow your principles.

“Representative” Oberstar, by your imperial leave; I paid for them.  So did taxpayers in Manhattan and Mississippi, in Oregon and Ohio.  We paid for those roads, for your bike paths, the Great Lakes Marine Research Institute, the North Star Commuter Rail line, and all the millions upon millions of dollars of other spending you inveigled for your district.

You didn’t pay for it.

We did.

And I will drive on any f*****g highway I want, whether I agree with its rationale or not.  I will ride on the bike paths I criticized you for.  I will go to the ice cream social or whatever they do at the GLMRI, and drive over those bridges – maybe back and forth a few times, like a kid playing on an escalator.  Come to think of it, if I can find any escalators built with your pork-barrelling, I’ll ride ’em until security tells me to stop.

Because I paid for them.  Against my will, in some cases; more than I’d have paid, in others; with my muted assent in still others. And since I paid for them – and since you were my employee (or would have been, had I lived in the 8th CD), I will not only not ask your permission, I may even take pictures of myself doing it, and send them to you, just to gall you.

So go curl up at the Humphrey Institute, and go away.

By your imperial leave.

Ted, You Are

Wednesday, January 26th, 2011

Ted Mondale is going to the Capitol today to start pimping for a new Vikings stadium.

Mere prose falls short in fighting causes like this (and if your prose is overheated enough, Janet Napolitano will arrest you.

So I’m going to fight this battle via the gift of poetry.

I present: “Green Stadium And Ham”.

I am Ted.

Ted I am

That Ted-I-am!

That Ted-I-am!

I want no Stadium, Ted-I-am!

Do you want a Vikings Stadium?

I do not want one, Ted-I-am.

I do not want a Vikings Stadium!

Would you want one downtown or Blaine?

I would not want one in downtown or Blaine.

Go away. Don’t be a pain.

I do not want a Vikings stadium.

I do not want one, Ted-I-am.

Would you want a retractable roof?

Or skyboxes, for the aloof?

I do not want a retractable roof

or boxes for the irony-proof.

Or one in either downtown or Blaine.

Ted, you’ve got an issue in the brain.

I do not want a Vikings stadium.

I do not want one, Ted-I-am.

Would you buy one paid with bonds?

Would you buy one lined with fronds?

Not paid with bonds.

Not lined with fronds.

Not with a roof, or hoi-polloi proof.

Not in downtown, not out in Blaine.

I don’t even want one over in Spain.

I will not buy a Vikings stadium.

I do not want one, Ted-I-am.

Would you? Could you, in a recession?

Buy one! I’ll cure your depression!

No, not while the market is recessed,

And go get tied. I’m not depressed.

You may want one. You may mellow.

You may want one purple and yellow!

I would not want one purple and yellow.

Not in A recession! You obnoxious fellow.

I do not want one paid with bonds.

I do not want one lined with fronds.

I do not want one in downtown or Blaine.

It’d be a monstrous fiscal stain!

I do not want one here or there.

I do not want one anywhere.

I won’t pay for a Vikings stadium.

I do not want one, Ted-I-am.

A train! A train!

A train! A train!

If you could go to games by train?

Not with a train! Not purple and yellow!

Not in hard times, Ted, you obnoxious fellow!

I would not, could not, paid with bonds.

I could not, would not, lined with fronds.

I will not buy one out in Blaine.

Or to relieve “the children’s pain”.

I will not buy one here or there.

I will not buy one anywhere.

I won’t buy a Vikings stadium.

I do not want one, Ted-I-am.

Say! with Zygi’s cash?

A bit of Zygi’s cash!

Would you, could you, with a bit of his stash?

I would not, could not, with Zygi’s cash.

Would you, could you, with a bit more taxes?

I will not, shall not pay more taxes.

You have no idea what the facts is.

I would not, could not with Zygi’s stash,

Or even a surcharge on trash.

Not in A recession. Not purple and yellow.

I do not want one, Ted, little fellow.

Not out in Blaine. Not paid with bonds.

Not even lined with palmy fronds!

You do not like a Vikings stadium?

I do not want one, Ted-I-am.

Could buy one with a goat?

You should be held behind a moat!

Not with Zygi’s cash! Not purple and yellow!

Not in A recession! You go to hell! Oh,

I do not want one paid with bonds.

I do not want one lined with fronds.

I will not buy one out in Blaine.

Losing the ‘queens won’t be such a pain.

I do not want one here or there.

I do not want one ANYWHERE!

I do not like a Vikings stadium!

I do not want one, Ted-I-am.

You do not want one. So you say.

Think “no more Vikings”! And you may!

Think of “our” Vikings in LA!

Ted! If you will let me be,

I’ll think about it. You will see.

Say! I like TCF stadium!

Let’s play there! Play there, Ted-I-am!

We don’t need to drive to Blaine!

No traffic backups in the rain!

No Zygi’s cash. And new-built train.

Not in A recession. No purple and yellow.

It’s an ingenious plan, you curious fellow!

So I will not buy a single bond,

and I’ll go to Hawaii for my fronds.

We’ll stick with soccer out in Blaine.

And ditch the endless parking pain.

Don’t need a stadium here OR there.

Don’t need to buy one anywhere!

I do so like TCF stadium!

Thank you! Thank you, Ted-I-am!

The Rubber Hits The Road

Wednesday, January 19th, 2011

The Minnesota GOP yesterday put the Minnesota budget – for the current bienniium  – up on the hoist and start working:

Minnesota House and Senate Republicans today introduced an early action budget bill that takes immediate steps to reduce the budget deficit by $1 billion. The bill reduces spending for state agencies by $200 million in the current budget while making other one-time spending cuts permanent, reducing the long-term deficit by another $840 million. The early budget bill represents the first phase of the Minnesota Legislature’s budget balancing plan for the next two years.

The bulk of the changes involve making Governor Pawlenty’s unallotments permanent, and starting to tackle the issue of the absurd “autopilot” increases that have the less-curious in the media and most of the leftysphere chattering about “$6.2 billion deficits”:

“We need to prevent automatic spending increases that are included in the state government budget, and passing this budget bill will keep some of state government’s expenditures at current levels,” said House Ways and Means Committee Chair Mary Liz Holberg, R-Lakeville. “For the most part, the budget bill includes spending levels that were approved by the DFL-controlled Legislature and Republicans at the end of the 2010 legislative session,” said Holberg.

More on this budget – and the response from the DFL and media (pardon the redundncy) – tomorrow.

If Not For The Grace of God, There Go We

Thursday, January 13th, 2011

The state of Illinois is experiencing the fiscal shit storm of the century. Minnesota isn’t far behind.

The difference? There’s a chance Minnesotans won’t get the shaft like like our friends in Illinois just did.

Our hard-won and just-in-time GOP majority, if our elected representatives stay true to their mission, will force a different tact in the Land of 10,000 Lakes.

Illinois Gov. Pat Quinn defended a massive increase in state income taxes passed by lawmakers Wednesday and promised to quickly sign the measure to help heal the state’s ailing finances.

Lawmakers worked overnight to pass the increase to raise the personal income tax rate from 3 percent to 5 percent for four years — a 66 percent increase. Corporate income taxes also will rise, but Quinn rejected the notion that it would decimate businesses.

Then again, that’s not the point. The point is that governments both State and Federal will continue to spend beyond their means as long as they know that they can always raise taxes down the road.

The rate increase might be the biggest any state has adopted in percentage terms while grappling with recent economic woes. Nevertheless, Illinois’ tax rate would remain lower than in several other states in the region.

Some comfort that must be. They’re less worst.

“It’s important for their state government not to be a fiscal basket case,” Quinn told reporters outside his Capitol office.

Legislative leaders rushed early Wednesday to pass the politically risky plan before a new General Assembly was sworn in at noon, taking a slice out of the Democratic majority and removing lame-duck lawmakers willing to support the tax before leaving office.

Nice move. Screw the people and vacate.

The tax increase will be coupled with strict 2 percent limits on spending growth. If officials spend above those limits, the tax increase will automatically be canceled. The plan’s supporters warned that rising pension and health care costs probably will eat up all the spending allowed by the caps, forcing cuts in other areas of government.

Here’s a novel idea. How about a spending freeze? Everyone else has had to do so. Why not government?

House Speaker Michael Madigan said Republicans should have supported some parts of the plan instead of voting against everything. The proposal passed the House on Tuesday night 60-57, the bare minimum. No Republicans backed the measure there or in the Senate, where the measure passed 30-29.”They’re on the sidelines. They don’t want to get on the field of play,” the Chicago Democrat said. “I’m happy that the day has ended.”

But Republicans noted they were not included in negotiations. They also fundamentally reject the idea of raising taxes after years of spending growth.

…but there apparently weren’t enough of them to prevail. Luckily for Minnesota, we painted our House and Senate Red just in time.

“We’re saying to the people of Illinois, `For eight years we’ve overspent, now we’re going to make it your problem,'” said Rep. Roger Eddy. “We’re making up for our mistakes on your back.”

The increase means an Illinois resident who now owes $1,000 in state income taxes will pay $1,666 at the new rate. After four years, the rate drops to 3.75 percent and that same taxpayer will then owe $1,250.

Republicans predict the tax eventually will be made permanent.

That ladies and gentlemen is what we call “The Slippery Slope.”

“It’s a cruel hoax to play on citizens to say this is temporary,” said House Minority Leader Tom Cross, R-Oswego.

Funny how that works for liberals. Tax cuts are always temporary. Tax increases are always permanent.

Republicans also accused Democrats of doing irreparable harm to Illinois families and businesses. Business leaders decried the proposal as a job-killer.

“Based on this particular legislation the only businesses that will benefit are the moving companies that will be helping many of my members move out of this particular state,” said Gregory Baise, head of the Illinois Manufacturers’ Association.

I suppose having a sense of humor has served him well lately.

Governors of some neighboring states quickly jumped on the issue. Republican Wisconsin Gov. Scott Walker, who took office last week has already proposed a tax cut for businesses that relocate to Wisconsin from other states, invited companies to head north.

Atta boy. I’m still coveting.

“Years ago Wisconsin had a tourism advertising campaign targeted to Illinois with the motto, ‘Escape to Wisconsin,'” Walker said Wednesday in a statement. “Today we renew that call to Illinois businesses, ‘Escape to Wisconsin.’ You are welcome here.”

“And we won’t tax you up the wazoo!”

Quinn scoffed at the notion. “Lots of luck to them, but that’s not going to happen.”

Except for the fact that it already is.

Democrats also bristled at being blamed for the state’s financial problems, although they’ve controlled the governor’s office and both legislative chambers since 2003.

Thank God that never happens in Minnesota (crosses fingers).

Last-Minute Gift Ideas

Thursday, December 23rd, 2010

Katie Kieffer has some ideas for procrastinators.

Like, er, me.

Congress Passes The Obama Tax Non-Increase Bill

Friday, December 17th, 2010

A tax hike is averted, but only for two years – not enough time or certainty to “create” jobs but certainly better than a tax increase.

Majorities of both parties supported the bill. Voting in favor were 139 Democrats and 138 Republicans, while 112 Democrats and 36 Republicans voted against it. Eight lawmakers didn’t vote.

The tax-cut plan extends through 2012 all Bush-era tax reductions on income, capital gains and dividends. It continues expanded unemployment insurance benefits through 2011, cuts payroll taxes by 2 percentage points during 2011 and lets businesses write off 100 percent of capital investments between Sept. 9, 2010, and Dec. 31, 2011.

Classic Pelosi:

“I’m sorry for the price that has to be paid by our children and our grandchildren to the Chinese government to pay for the increase in the deficit that the Republicans insisted upon.”

We’ve recently covered this ground before but Nancy is fooling almost no one. The government creates a deficit by spending money it doesn’t have and in this case money it was never going to have and in either case is not entitled to. Voters made that clear to everyone but Nancy Pelosi.

Some early reactions:

The tax-cut deal, along with larger-than-projected gains in U.S. retail sales, prompted economists to raise their forecasts for gross domestic product and consumer spending, which accounts for about 70 percent of the world’s largest economy.

Michael Feroli, chief U.S. economist at JPMorgan Chase & Co. in New York, increased his 2011 growth forecast half a percentage point to 3.1 percent. Tom Porcelli, a senior economist at RBC Capital Markets Corp. in New York, raised his by one percentage point, also to 3.1 percent.

Deutsche Bank Securities economists, led by Joseph LaVorgna, said the tax agreement would increase inflation- adjusted growth by 0.7 percentage point, to a 4 percent annual rate for the fourth quarter of next year.

Only after the fact will we find out what earmarks were hidden in the 1900 pages but for now the passage of this bill brings short-term stability for taxpayers, many of which have been planning all year for higher taxes next year.

In light of this, it will be interesting to see if there will be a last minute boost to holiday shopping – I predict that very thing.

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