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What Minnesota’s Democrats want in a 'fiscal-cliff' deal

What Minnesota’s Democrats want in a 'fiscal-cliff' deal
REUTERS/Larry Downing
Hundreds of lawmakers are sitting on Capitol Hill holding out for an agreement palatable to their ideologies.

Rep. Keith Ellison: What I’m opposed to is requiring the most vulnerable people in our community — seniors, the aged, people who are sick and really can’t work — I don’t think they should have to pay for the fiscal problems of our society. They didn’t cause them, and they shouldn’t have to bear the brunt. No, I’m not going to ask families who depend upon Medicaid to send their family member into a nursing home, or worse, so that somebody else can preserve their tax cut.

Rep. Tim Walz
Rep. Tim Walz

Rep. Tim Walz: But I do think [entitlement spending] needs to be a big component of it. I think the president, obviously, has set out a bigger revenue component than this, and we’ll reach somewhere in there, but I’m still convinced with the “go big” approach, and now there is leverage there to do it.

Rep. Collin Peterson: I told my constituents during the election: I can’t tell you what this is going to look like. All I can tell you is this: you’re all going to pay more, and you’re all going to get less. And that’s what’s going to happen at some point, maybe before Christmas, maybe next year, whenever it is, but at the end of the day, nobody is going to be exempt. We’re going to have to fix this.

Klobuchar: Our own military commanders have suggested some of the things that can be done, like the F-22 Raptor program, the F-35 Alternate Engine Program. … There are cuts to me made here, and we can do it without doing it on the backs of the middle class.

I think the other thing most people don’t talk about is the farm bill. That’s a $23 billion reduction over the last farm bill over 10 years [in the Senate version].

Peterson: There is some talk about [the farm bill], but I’m not sure it’s going to be enough money that anybody really cares enough about it.

Walz: I certainly always believe in a progressive tax code. That you’re going to pay a little bit more at the top, for one thing is, not just because you have the ability, but in many cases you benefit more from it.

Sen. Amy Klobuchar
Sen. Amy Klobuchar

Ellison: The reality is, is that we’ve seen three decades of this country thinking that if we cut taxes for the richest people, then they would use the extra money to invest [in the economy]. This has never worked. It’s time to stop that.

Peterson: I’m not against it, but that may not be enough. I don’t know that you get there by only raising rates on the wealthy.

Walz: One thing that I wanted to pass and one that I would argue is something we could agree on is mortgage interest deduction on yachts. … That’s silly, because I think that all of us know the argument that people will not buy a yacht because they don’t get the mortgage interest deduction is ludicrous.

Ellison: I think if we want to make sure that retailers like Best Buy can stay competitive, we might want to look at some kind of online sales tax. … [And a] financial transaction tax … $50 on $10,000 worth of stock trades.

Franken: I could see, again, doing stuff on dividends, on capital gains. You saw [Mitt] Romney make $20-some million last year and paid 14 percent on it. I think something like the Buffett Rule, where if you make over $1 million you have to pay a certain percentage of your net income in taxes.

Klobuchar: One example would be the oil subsidy, which is $40 billion over 10 years. … I’ve talked about how you can cap the home mortgage deduction at a $500,000 value on a home.

Franken: I would prefer that we give some kind of certainty to people and to the markets. That’s why I pushed to, and why we passed in the Senate, the extension of the Bush tax cuts on the first $250,000. So let’s take care of that, let’s make sure that we’re not going to have a fiscal cliff.

Klobuchar: I think we’d like to avoid that. I think the American people spoke loud and clear: They want us to come together toward a solution that balances cuts and revenues.

Peterson: I’m concerned about that because of the effect it would have on the markets. I don’t think we should be promoting that. … This is going to come down to whether Boehner and Obama can make a deal that they can sell. That’s the bottom line.

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Comments (5)

The sham

in this whole raise the tax rates on the wealthy issue is

1- It provides no where near enough money to even make a small dent in the deficit

and

2 - it will still leave guys like Warren Buffet paying far lower tax rate than a guy like me (owner of a small business with 70 employees). Buffets income is derived almost exclusively from capital gains and other investment income - mine almost exclusively from operating a manufacturing business. His effective tax rate will not change, mine goes up.

So, with employees looking for raises, my fed taxes going up (we are a sub chapter S corp so the business taxes = my taxes), my state taxes going up, my property taxes going up, uncertainty over my medical insurance plan, and a business forecast that looks pretty hazy (in no small part due to all the uncertainty over the tax and healthcare issues), just exactly what I am suppose to do?

Raise prices? That will just move more manufacturing work to China. Cut staff? I resisted that during the recession choosing to cut pay for myself (and other senior managers) rather than let people go. Gain efficiencies? We have been doing that forever and there is not a whole lot of fruit left on that tree.

There are real tax reform ideas out there. Ralph Nader's proposal for a .25% transaction fee on all financial trades is a very sound one. Think about this. The current value of all the financial trade transaction in a year are 70 times the actual size of the economy. Taking 25¢ out of a $100 trade yields billions of dollars in new revenue.

There are a variety of proposals on consumption taxes that make great sense. And there is the 4000 pages of special interest tax breaks written in the current tax code that should be pruned by, in my opinion, 3000+ pages.

But none of that sells. The wealthy liberals supporting Obama and friends would feel those tax increase just as the conservative friends of the Republican party. So it is not going to happen.

No, just much easier to say "tax the wealthy" without really defining who that is, what effect it will ultimately have and, most importantly, acknowledging that it's insufficient to make a real difference.

Makes me wonder if I should sell my business and become a day trader. I would personally be a lot better off and would certainly pay a whole less in taxes. Of course 70 people would lose their jobs - jobs that pay well and have great benefits. But I am starting to think that is what the politicians are providing incentives for me to do.

My redline

Any cuts to social security ...even slight of hand such as changing age of qualification and I will NEVER contribute to the Democratic party or any democrat candidate....even Ellison( the best thing congress has going for it)!

More proof

that people just don't understand the real issue. Quote from the NY Times:

“We have the greatest disproportion of wealth since 1928, and I don’t think that’s a healthy thing,” William L. Enyart (recently elected Dem to the US House) said. “How much money is enough? Do hedge fund traders really need to make a billion dollars a year and pay only 15 percent in taxes when we have teachers making $50,000 and paying 20 percent?”

Rep Enyart - I hate to tell you this but Mr. Obama's plan (and Mr. Dayton's plan) will NOT address the issue you are complaining about. Obama/Dayton want to raise the taxes on earned income - not capital gains taxes from hedge fund managers. Hedge fund managers are not going to pay 1¢ more unless you count that income as earned rather than capital gains.

But the rhetoric sounds good......

Can you cite a source?

The expiration of the Bush tax cuts should raise capital gains from 15% rate back to a 20% rate. The provisions on taxing dividends as gains instead of income would also expire. NPR says that setting the rates back to 20% is part of the Obama plan.

http://www.npr.org/blogs/itsallpolitics/2012/11/29/166150808/why-dividen...

The best statemnt in the lot

"All I can tell you is this: you’re all going to pay more, and you’re all going to get less. And that’s what’s going to happen at some point"

Basically everyone contributed to or benefited from the deficit, they should now start paying it off in proportion to their gain.
Statistically speaking, (rich is anyone above mean income ~ $50K), Since the 1% or the ~ 6th Std. deviation benefited by far the most they should help the most.
Yes representative Ellison, the poor etc benefited as well, and need to contribute their fair share, "No sacred cows"