41 thoughts on “First, The MNGOP Fixed The Deficit

  1. 10 million is a far cry from the estimated $281 tax revenue shortfall in Wisconsin. Sometimes crazy fiscal policies are undertaken which contract spending and reduce tax revenues simultaneously so as to embark upon a maximally contractionary policy, in the misguided belief that tax revenues will “boom” in such a way that revenues increase in response to a tax rate decrease.

  2. $10 million was for just one month, Emery. So far, this year, we’re more like $90 million short of projections.

    And next year, there are going to be hundreds of millions of dollars more in spending – one might resume, without hundreds of millions of dollars of commensurate extra revenue.

  3. The declines in Wisconsin income tax revenues should continue and significantly accelerate over the next three years as Wisconsin businesses (both manufacturing and agricultural) re-organize to maximize the amount of the tax credit flow-through. This will occur through two mechanisms: 1) existing businesses will re-structure and maximize the amount of the flow-through credit through aggressive transfer pricing and cost-shifting strategies; and 2) out-of-state resident business owners, and owners who have already transferred taxable business income out of state through the use of out-of-state administrative companies or upstream parent companies, will find an eager market for buy-ins by Wisconsin investors seeking to obtain these tax credits. The first step is already well underway with many companies separating into production, distribution, and administrative companies with the production company maximizing manufacturing income by aggressive transfer pricing to the distributing entity and the concentration of costs in the administrative entity. The second step is just beginning as CPA firms and tax attorneys begin to structure investment deals which will resemble the 1980s market for Real Estate Limited Partnerships before the introduction of the at-risk rules and the limitations on passive investment losses. But there are two significant differences between the old LP investment deals and the coming wave; 1) the old LP deals consisted of selling tax losses to investors, and lacking a profit incentive, the old LP deals had, at their cores, a money-losing business, while these new deals will be investments to receive tax credits from a profitable entity; and 2) unlike the real estate deals of the 1980s–bank debt will not be involved or it will be only a marginal aspect of the deal. Remember that when Walker spoke to the WMC when this was passed he spoke of it as a measure that would “end taxes” for many WMC members. The people who designed this knew fully well that the cost estimates were wholly off the mark. I would not be surprised to see state income tax revenues continue to decline at 3-4% a year for the next several years as the true costs of this reverse Robin Hood, no-taxation-of-the-wealthy measure hits full stride.

  4. Walker doesn’t tax the wealthy?
    No sense reading anything else in your post when you finish with a falsehood, Emery.
    People on the left often use the gambit of stating a bizarre, absolutist position. Wallstreet was completely unregulated under Bush, the U.S. has a system of unbridled capitalism, there is no such thing as voting fraud, etc.
    Saying that Walker does not tax the wealthy is a lie. The truth is, Walker taxes the wealthy. ZYou just think that he does not tax them enough.
    Erecting strawmen is sign of an inability to compose a proper argument.

  5. Emery did you read the story? We are down $80 million for the first two months of the fiscal year. That is a pace of $960 million over two years.

    Fortunately when Governor Johnson takes office next January he will immediately take efforts to stop spending to cover up for the deficit.

    Too bad Dayton and the democrats pushed that office building through that cost the tax payers of Minnesota $90 million.

    Walter Hanson
    Minneapolis, MN

  6. “MN revenues will continue to decline as a result of the policies made by Mr. Dayton.”
    !00% as accurate as Emery’s comment.

  7. Once again, soci@list piece of crap EmeryTheUSAHater shows his inability to grasp rudimentary arithmetic.10MM or 960MM… it’s all the same to him. Of course what would you expect from a person who cannot tell whether 10 is larger or smaller than a 100.

  8. “There’s no such thing as a free lunch.”
    It’s Dayton and the DFL who believe that tax levels have no effect on economic growth. Or at least that is their public position. Keynes taught us that tax increases shift money from consumer spending and investment (which does have a multiplier) to government spending (which has no multiplier).

  9. Mr. Hanson:
    The Senate building is funded by a leaseback arrangement from the same state agency that would have to pay for renovating any on-site or off-site building . But the land is already owned by the state and off the tax roles. The two largest committee rooms will house the House and Senate while the Capitol chambers are restored, saving immense cost of any other option. And the timing of the building was supposed to mesh with eliminating about 100 offices presently within the Capitol building that have been “temporary” for nearly 50 years. What should be reported is the unnecessary extra cost due to the lawsuit by Rep. Jim Knoblach. His lawsuit was the singular reason the temporary House and Senate chambers may not be ready in time for the 2016 session.

  10. PM:
    Mr. Walkers tax policies contract spending and reduce tax revenues simultaneously which results in a “maximally contractionary policy”.

  11. contract spending and reduce tax revenues. increase after-tax earnings by Wisconsin taxpayers.
    Fixed it for ‘ya!
    I swear you have a anti-Walker stake in this somewhere, Emery. You say the weirdest things. The entire economy of WI is not government spending. It’s GDP is not all tax receipts. Where do you disagree with Keynes? Or agree with him? Should Wisconsin deficit spend?

  12. Emery:

    Um if you don’t understand spending why should we trust your rants on revenues or anything else.

    We spent $90 million to build the building. If we didn’t spend the $90 million to build the building the state will have another $90 million in the bank.

    Now you’re claiming that the building is paying for itself by rents which means that the state of Minnesota is spending money to give to the state of Minnesota. No that doesn’t replace the $90 million that was spent. And to be exact if the state hadn’t built the building and rented office space they would probably be spending less money.

    Walter Hanson
    Minneapolis, MN

  13. Trying to fine-tune the national economy to produce the best compromise between public spending and economic growth is very difficult. It’s never been done right, as far as I can tell. Trying to fine-tune a state economy to get the best compromise between public spending and economic growth is damn near impossible. People, money, and many or most businesses can flow across state borders with ease. You can do targeted things — like not tax retirement income — to attract a certain type of resident. You can try to make state policies and taxation more friendly to certain types of businesses (small businesses grow quickly and hire quickly, or they fail, while big businesses have bigger, more reliable payrolls). But all you can do is nudge.
    Illinois is more liberal than WI at present. It has been for a long while. The Illinois economy is terrible by almost any measure. NoDak is very conservative, small government state. NoDak is doing great. MN and WI are like fraternal twins. I don’t think you can make any hard and fast judgments about whether MN or WI has the “better” economic policies. You can determine which of the two has an edge in what are traditional economic growth policies. That is WI at present. Whether this will actually lead to higher growth is hard to tell with so many unknowns.
    Two fraternal twins at age 30: one is an hydrological engineer, one is a plumber. Which one is doing better? The hydrological engineer is unemployed, has a divorce behind him and an alcohol problem. The plumber has a growing plumbing business owner and a great family life. Which is doing better?
    At age fifty who is doing better?

  14. Mr. Hanson;
    I will be voting for Mr. Johnson and I assume the same goes for you. The Senate building is nothing but a political cudgel. The MN Dept. of Human Services is where ‘real money’ is spent. We’re both supporting the same candidate. We just have different expectations.

  15. Emery, you seem to be convinced that MN is doing “better” than WI. Is this because you believe that the more government friendly, less business friendly policies of MN are making its economy better than WI? Is MN doing better than WI because of or in spite of MN tax and business policies?

  16. That happens all the time, even to wealthy people, and countries.
    What do you think should drive taxes and spending, Emery? Public employee union demands?

  17. Just FYI, Emery — you will see a lot more of this public employee vs taxpayer strife in the future. The character of both public sector and private sector employment has changed. More high wage white collar people in government, more blue collar, lower payed, job-insecure taxpayers supporting them.
    High growth is the panacea that cures all ills.

  18. Economics lesson 1: Economics is the study of the rationing of scarce goods.
    Economics lesson 2: Human needs are infinite.
    Economics lesson 3: Markets have organic discipline that balance rationing and needs. Governments do not.

  19. When a tax policy (scheme) is created to reward your political benefactors it’s often referred to as: “Crony Capitalism”.

  20. Now you’re claiming that the building is paying for itself by rents which means that the state of Minnesota is spending money to give to the state of Minnesota. No that doesn’t replace the $90 million that was spent. And to be exact if the state hadn’t built the building and rented office space they would probably be spending less money.

    Simple math. Even a two year old can understand that 10 dollars not spent is 10 dollars saved. But that is beyond comprehension of our resident soci@list troll.

  21. “When a tax policy (scheme) is created to reward your political benefactors it’s often referred to as: “Crony Capitalism””
    It’s called “politics as usual’, done by the D’s and the R’s all the time. Been that way since the New Deal. Obama and the D’s regularly tax the wealthy to pay off the bottom 50%. Did you know that w/o transfer payments, income inequality (gini coefficient) wold be about three times as high as it is now? You could look it up in one of those econ 101 textbook thingies.
    You are making an argument against a tax system that is politically controlled, not an argument against an particular politicians.
    Do your arguments normally make sense to the people you talk to, Emery?

  22. Your comment deserved far more sarcasm, Emery. Only the politicians you don’t like engage in “crony capitalism”?

  23. Is your position that ideologues and partisans are the complement to dullards and dolts?

  24. Great article by Peter Thiel on the hard reality of being a merchant: http://online.wsj.com/articles/peter-thiel-competition-is-for-losers-1410535536?mod=WSJ_hpp_sections_tech

    I once wasted an afternoon over at Althouse caught between a free-enterprise capitalist and a socialist, trying to explain to them that in a free market, you can’t make an economic profit. Dullards.
    In a free market with no inefficiencies to take advantage of, every merchant is in the position of the unskilled worker who has to sell his labor to the lowest bidder and cannot control the price. The floor is what you need to survive for another day.

  25. I’ve got nothing against partisans and ideologues, Emery. Or dullards and dolts, for that matter. The ones who bother me are the people who that they are not ideologues and partisans but are ideologues and partisans.
    Their are many ways to do government wrong. There are fewer ways to do government well. There is no way to do government “right”, anymore than there is a way to do tap-dancing “right”. It’s a matter of values.
    When the government has different values than the people it governs trouble follows. The social contract frays. The small-r republican spirit is diminished The Federal government of the US is especially prone to being captured by people with values that are different than the governed because it is not very small-d democratic. For exaple, when Obama mentioned all the groups that wanted amnesty for illegals last week, he rattled off a string of special groups (business, labor, churches, civil rights activists). He didn’t bother to mention the people.

  26. I am sure there is no principle left that American conservatives both claim and haven’t renounced in the last 10 years. And it is getting that way for American liberals. Only rocks and libertarians are immune from hypocrisy and for the same reason.

  27. Rocks maybe, but not libertarians. As for liberals, they have become so totalitarian, so distrustful of the people that they wish to rule that the name is a joke. Pro-freedom people have to call themselves ‘classical liberals’ to differentiate themselves from the “liberals” who believe that free speech needs to be curtailed and you should be fired from your job for holding opinions that they do not agree with.

  28. Bill Clinton, “liberal”, on McConnelL:

    “If the worst thing that ever happened to me was an attempt to limit black bag campaign contributions? What about 9/11, what about the financial meltdown, what about the farm crisis in the 70s and what about the middle of the country’s manufacturing base hollowing out in the 80s, and what about in his native Kentucky 70 percent of the coal miners losing their jobs before the EPA ever said a word…how could you possibly say that the worst thing that ever happened to you was not being able to black bag unlimited amounts of money?” Clinton asked.

    McConnell was talking about McCain-Feingold, which the supreme court violated the 1st amendment because it regulated political speech.
    Justice Kennedy wrote the majority opinion: “If the First Amendment has any force, it prohibits Congress from fining or jailing citizens, or associations of citizens, for simply engaging in political speech.”
    Wikipedia says “Justice Kennedy’s opinion for the majority also noted that because the First Amendment (and the Court) does not distinguish between media and other corporations, these restrictions would allow Congress to suppress political speech in newspapers, books, television, and blogs”
    A liberal with any principle would agree that protecting political speech is more important that any farm crisis or enemy attack. Jesus.
    Find me a liberal who supports Citizens United and I will believe that their a still a few principled people on the Left in this country.

  29. Americans are a charitable people and a tolerant people. At some point, though, what partisans deserve minus charity and tolerance still might add up to extermination. That’s the current trajectory.

  30. Emery:

    If you think that Minnesota is going like gangbusters (after all you knock Wisconsin all the time) how come I drive by so many empty blocks in Minneapolis on what is their busy street(s) where businesses used to be and there are now empty lots.

    If it was very easy to create a business that is thriving won’t there be no empty lots with lots of businesses?

    Walter Hanson
    Minneapolis, MN

  31. Lessee…Emery compares a projection for a year’s revenue to a month’s shortfall numbers without pointing out he’s using completely different measures.

    Do you live to embarrass yourself, Emery?

  32. Please don’t make a Swift-like statement (without data) to prove your point. You sound like an intelligent individual, have at it.

  33. You provided the data, Emery. Compared a month of tax returns, a very volatile statistic, to a projection of an annual deviation from planned tax receipts.

    Please don’t make an Emery-like statement without logic to prove your point. Keep your eye on the data you have already provided.

  34. MBerg claimed the sky was falling on MN because of declining tax revenue. I pointed out Wisconsin has a similar problem (declining tax revenues). If you don’t like the manner in which I framed it, that’s your prerogative. I could have added that Kansas and IN. have declining tax revenues as well, but that would have been over-kill. The relevant question is whether policy has anything to do with it.

  35. BB:
    Emery doesn’t worry about embarrassment. Because at the end of the day, Emery just isn’t me. Therefore, in a very important sense, I am not that emotionally invested in the identity and perception of my creation in the wider world. If people don’t like (hate, despise, scorn, belittle) Emery, I can shrug and tell myself, “So what? That isn’t me they’re attacking anyway. This is very liberating, let me assure you.

    In this respect, pseudonymity is tailor made to set up a figurative straw man which a fellow commenter can attack to their hearts’ content while diverting the slings and arrows of unwanted attention away from your own tender ego and sense of self worth. It is always wise to remember you are less interesting, intelligent, and entertaining than you would like to be.

    “The person who experiences greatness must have a feeling for the myth he is in. He must reflect what is projected upon him. And he must have a strong sense of the sardonic. This is what uncouples him from belief in his own pretensions. The sardonic is all that permits him to move within himself. Without this quality, even occasional greatness will destroy a man.”
    — Frank Herbert, Dune

  36. Emery, nice try, but your claim is that things are worse in Wisconsin. You’ve got to get comparable measurements to prove this, and you’ve consistently failed to do so.

    Moreover, when others do your work for you, we’re generally finding the opposite. Despite proximity to states that are doing very well, like the Dakotas (whereas Wisconsin is next to Michigan and Illinois), Minnesota is dropping more quickly than is Wisconsin. This is a big deal, and if you were measuring things in the right units instead of simply citing the abstracts of the articles you’re referencing, you would know this.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.