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Gov. Mark Dayton ‘distressed’ by current anti-tax mentality

tax protesters
CC/Flickr/Fibonacci Blue
Dayton admits that the “no new taxes” mantra of his opponents is simple and difficult to defeat.
MinnPost file photo by James Nord
Gov. Mark Dayton

Much of Gov. Mark Dayton’s speech to Humphrey Fellows at the University of Minnesota Wednesday could have been delivered, with one big twist, by any number of Republicans.

And in fact, many of the points in Dayton’s speech has been made by such Minnesota Republicans as U.S. Rep. Erik Paulsen and former Gov. Tim Pawlenty.

Unless the nation’s leaders get their acts together, Paulsen, Pawlenty and now Dayton have said, the U.S. is headed for a mighty fall.

They agree on the problem: Government spending is outpacing revenue.

The big difference, though, is how to solve the problem. Republicans say the solution is to cut government spending.

Tax hike for wealthy

Dayton says the answer is to raise taxes, specifically on the wealthy.

If that doesn’t happen …

“I think we’re headed toward a fiscal cliff,” the governor said.

He used such phrases as “the demise of this country” and “death of the country” if people aren’t willing to “pay for what we need.”

This was not a “beacon on a hill” optimistic speech.

Dayton expressed “distress’’ over the will of Americans to pay taxes.

He questioned whether the federal health care plan, so massive and complex, can work. (“I’m a single-payer advocate,’’ he said of what is known as Obama-care. “So will this hybrid work? I don’t know.”)

He was even upset by the news that the University of Notre Dame is going to join the Atlantic Coast Conference instead of the Big Ten.

He will, it should be noted, continue to push for a state income tax increase on Minnesota’s wealthiest. By December, he and his revenue commissioner hope to unveil a total restructuring of Minnesota taxes.

He’ll work hard to make “Obama-care” benefit Minnesotans and hopes that, following the elections, Republicans will join in his effort.

The Notre Dame problem, however, is beyond his reach.  (Most of the Humphrey Fellows didn’t seem nearly so concerned about the Notre Dame issue as the governor did.)

Self-deprecating humor

There were a few moments of classic Dayton self-deprecating humor.

In the midst of his talk, which was filled with stats, dollars, decimal points, he laughed at himself.

“My speeches are as substantive as President Clinton’s,” Dayton said. “They’re just not as interesting.”

There was a sigh of relief and laughter from the audience.

But laughs were few and far between. Dayton clearly didn’t see a need to entertain the Humphrey Fellows. These are serious people from business, government and the nonprofit sector who attend monthly sessions that are designed to encourage leadership and greater understanding.

The fundamental problem that Dayton sees in our culture is the unwillingness to pay taxes. At one level, he understands.

“Nobody likes to pay taxes,” he said.

But at a more philosophical level, he’s perplexed and disgusted with the attitudes that led to the creation of the Tea Party.

How, he wonders, can people who received so much from previous generations willing to pay far-higher taxes, be so opposed to building — or even maintaining — what they received?

“Historians will say this was the decade of great squandering,” Dayton said.

Again, he worked in a chuckle line. During the Eisenhower years of the 1950s, when the interstate highway system was built, along with airports and so much more, he said the highest tax rate was 93 percent.

He held up his hand.

“I’m not proposing that,” he said to laughs.

The budget issues are not just a national problem; they’re a huge state problem as well, Dayton said.

Dayton lambastes GOP newcomers

And then, he lambasted the mostly new members of the Republican legislative caucuses.

He described those members as “people who know nothing about government and care even less.’’

All they understand is that if the state has a budget of $34 billion, and they think it should be $32 billion, he said.

“They don’t know — they don’t care — what those cuts do,’’ Dayton said. “They’ve been in their positions for 1½ years. … It’s very distressing.”

How gloomy was the governor?

It’s clear he fears that he again could be dealing with Republican majorities – more stridently conservative than ever – following the elections.

Had elections been held either at the close of the legislative sessions in 2011 or this spring, Dayton says he believes “the DFL would have swept” into control.  But what happens in the months following session, he said, is that issues get “muddled.”

He’ll do all he can to help DFL legislators in their campaigns. (He’s already appeared at a number of fundraisers for individual legislators and has plans for many more in the final weeks of the campaign.)

Dayton admits that the “no new taxes” mantra of his opponents is simple and difficult to defeat.

But simplification, he said, doesn’t solve problems.

Example:  The University of Minnesota and the state’s other public institutions of higher learning are vital to the future economic success of the state.  A highly educated workforce always has been a key factor in keeping Minnesota ahead in competition with other states.

Yet, he said, his battles with the GOP Legislature led to 15 percent cuts for those institutions.

Smiling, he turned to University President Eric Kaler and thanked him for the kind introduction he’d given the governor.

“You’re either very gracious or a good politician,” Dayton said, noting the 15 percent cuts.

“It could have been worse,” Kaler responded.

But the trend of cutting the University and other state schools has to be reversed, Dayton said.  He spoke of how in some states, there are numerous research institutions. Minnesota has only its University to discover that next big thing that will keep Minnesota in front of the pack.

“My father used to say that if you’re going to put all your eggs in one basket, you’d better take good care of that basket,’’ Dayton said.

There were a few questions from the audience, including questions regarding the amendments.

The voting amendment makes no sense to the governor. “Fiction,” said Dayton of the problems the amendment is supposed to cure.

As for the marriage amendment that would limit marriage to between a man and a woman, Dayton is hoping for “a singular accomplishment for Minnesota to defeat this amendment.”

Dayton again talked of the Republican ability to simplify a message.

The amendment, he said, is supposed to “save marriage. … Who’s not in favoring of saving marriage? I failed to save two of them, but I still believe in it.”

But mostly this message was about budgets, taxes, know-nothings in the Legislature and the importance of  Minnesotans paying attention.

When contacted by the Associated Press, Rep. Greg Davids, R-Preston, who heads the House Taxes Committee, was not impressed by the governor’s remarks.

 “I care very deeply about this state,’’ Davids said. “I just happen to believe [taxpayers] should be able to keep more of the money and give less to government.’’

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Comments (31)

Decade of squandering

That might be as good a description of the era of conservative governance as any.

I'm not going to slam Gov. Dayton

It's enough to say that it saddens me greatly that we cannot find better qualified, sharper minds to elect.

We can pour bales of cash into government's maw, but unless we can somehow convince the truly gifted among us that America is worth the sacrifice we make our elected representatives make, people like Mark Dayton will just take those bales over the cliff with them.

Squandering

There must be some other agenda, other than keeping taxes so low. Otherwise, how could these legislators not see that, to take just one, but a big one, example that cutting the U of M costs us a great deal of money. Eric Kaler uses the figure that for every dollar we spend on the University, we get a return of $13.20. What investments could beat that? Mine sure don't, especially now.
It's like the republicans refusing a deal that for every $1 cut the Democrats would cut $10. What kind of math challenged person would not take it?

Wow

People claim that Mitt Romney is out of touch because he has a lot of money. But at least he earned his.

This guy is out of touch and never worked at an honest job a day in his life. Of course he doesn't care about higher taxes. Money just flows into his bank account every month and he has no idea where it came from.

His remarks were embarrassing, really. Reminds me of something Louis XVI would say.

Mitt Romney "earned" his money?

That's interesting. The way I see it Romney was born into a very wealthy family, and parlayed various connections to get himself a career in dismantling companies other people had built to sell off the parts.

I wouldn't call that "earning" anything. In some cases, what he did amounted to nothing more than vandalism.

And by the way, unless you've seen his tax returns - which we really haven't - we're not even sure what he earned, let alone how he earned it.

Dayton is a wealthy guy who inherited money, too. But he is waving his hand in the air asking you to let him pay more in taxes on it. That seems rather different to me.

You're wrong

Mitt Romney donated his entire inheritance to charity. You should read his bio before you assume you know him. He and his wife lived in a $75/month basement apartment when they were first married.

And Romney donated $4 million to charity last year. I wonder how much Dayton donated.

I did read his bio

And as usual you are inaccurate. He had already made his money destroying companies for Bain when his father died. He neither worked during college or paid for his schooling.

Dayton's Self-loathing

"Dayton expressed “distress’’ over the will of Americans to pay taxes."

He might understand this more if he ever had to actually earn money to get by and provide for his family. I applaud those in his family that came before him for being so very successful and building vast wealth after starting from nothing. I understand that he feels guilty for being born wealthy and he probably knows deep down that I he wasn't a Dayton and couldn't pour 20+ million of family money into his campaign, he would just be another guy (that no one has ever heard of) busting his a** to build a future for his family.

Higher Taxes

Seems simple to these Politicians don't it?!
Always with the "raise" taxes! No matter if it’s on the "rich". The REAL problem is SPENDING! The government is ALWAYS SPENDING! STOP it! If we don't have it we can't spend it! This NOT about taxes. Fire all these people! Dayton is "shocked" by the mentality!? We, the people are the ones who should be shocked! ALL politicians are ELECTED to do as the PEOPLE instruct them! Not what they (politicians) THINK is best for us. Get outta office you thieves and liars!

What government services do you no longer wish to receive

People always say there is too much spending but they can never seem to articulate which government services they currently receive that they no longer want.

Well said!!

Well said!!

Squandering

Since 2008, 15 pieces of legislation have contained stimuli funds, totaling over $2.5 trillion. Most economic indicators would support a verdict of SQUANDERING.

According to the IRS, the top marginal rate during the Eisenhower years was 91%, not 93%. That was true until the Kennedy-Johnson tax cut of 1964 reduced it to 70%. The Governor insinuates that the interstate highways and the nation's airports were built on the back of the top marginal rate. The Governor did not mention the percent of federal revenue that was reaped from the top marginal rate. I suspect that the Governor could not answer that question; I suspect that it would not support his argument.

Address the problem and stop blaming taxpayers

Is there any doubt that sending is the problem? How long do you think you can go on with all time high spending and not be buried in debt? Companies have been leaving Minnesota and taking jobs with them. Businesses are moving out of state or starting next door in in Wisconsin. An example is the founder of Cirrus the airplane manufacturer in Duluth is starting a new aircraft company and manufacturing plant, not in Duluth, but in Superior, WI. and that is just a new company, I can't count the companies that are leaving or have left already.

Ain't seen nothin yet!

As the baby boomer population ages medicare will be stretched to the limits. In a few short decades there will be more people on medicare than those under 20. Everyone wants taxes cut but not the government programs that they use or help them.
Look at the mess at the federal level with automatic tax cuts Congress agreed to now nobody wants.

Gov. Dayton is a very smart

Gov. Dayton is a very smart man and he is absolutely right. You can insult him all you want, but you can't prove him wrong. We taxpayers, especially those at the top margin, are paying a far, far lower tax rate than we have in decades. Simple logic tells us that we can't maintain the way of life that was built by those (higher taxpayers) before us unless a higher tax rate is reinstated.

This country has as much money as it ever has, but it now flows overwhelmingly to the top.The wealthy, corporate powers-that-be have managed to convince a certain gullible portion of the population that we simply have to lower our expectations in maintaining our infrastructure, educating our young, taking care of the poor, etc. Money that goes to support this government work interrupts that flow to the top. They are determined to maintain their wealth and profits regardless of the cost to our society and the future of our country.

paying more

I think people will commit more to MN (with less grimacing) if they feel more confident about how it is deployed.

I suspect…

… Mr. Rose is incorrect, but in keeping with his own lack of factual support for his assertion, I'm not going to research it. What DOES seem relevant is that the current tax "burden" on individuals and corporations is lower than it has been in about 50 years, far lower than it was in the Eisenhower years, so whining about said "burden" is just that – whining. THAT assertion can be supported by going to the Washington Post's website, or clicking on the link in Eric Black's piece in today's MinnPost. The WP graphic – based on figures from the CBO, as serious a bunch of number-crunchers as there ever has been – shows that the current tax "burden" as a portion of GDP is only marginally greater than the tax BREAKS – the vast majority of them going to individuals – that are also part of the picture.

There ain't no free lunch.

When people who like to call themselves "conservative" begin to include in their commentary the social and governmental services they currently benefit from that they're willing to forego in order to bring spending into line with income, then they'll have some credibility. Until then, it mostly amounts to "Don't spend money on stuff that doesn't benefit ME!" Ayn Rand would probably approve of such sentiment, but grownups know there are no societies – nor have there ever been any societies – that operate on that basis. Roads are not paved, sewers are not built, water supplies are not cleaned, health care not provided to those without adequate resources, etc., through the use of pixie dust and magical thinking.

One has to admire our

One has to admire our governor for saying the truth when people might not want to hear it. In a day when Mitt Romney's tens of millions of ANNUAL income from whatever he's not working at these days get taxed at a mere 13.5% [that's only for a tax return he lets us see--imagine what's in the ones he's hiding!], it behooves us to be reminded by Dayton that when the U.S. was great and building infrastructure on massive scale, there was a steeply progressive federal income tax (and fewer accounts held in the Cayman Islands, etc.). For Pete's sake, even in 2000, my Minnesota income tax was higher than it is now. And the state didn't have to rob Minneapolis Schools of millions of dollars to "balance" its budget (money stolen several times over and not yet repaid).

Dayton said in the last legislative session that there were people elected to it that didn't know anything about governing, who were incapable of governing because of ignorance. He has had to deal directly with them, and I'm going to bet he knows what he's talking about. I haven't seen anything from MN GOP legislators that would contradict him.

There is no free lunch

Mr. Schoch:

I see that like the Governor, you do not know the answer to the question. If you disagree with me, I would like a reference to your source. When I disagreed with the Governor, I provided my source, which was the IRS.

Excerpted from the link below, which contains its own sources:

Federal Revenues Historically Unresponsive to Top Marginal Tax Rate

"One relevant principle in economics is the observable phenomenon that increasing tax burdens hinder an economy’s outputs. In 1913, passage of the 16th Amendment permanently embedded the income tax into our lives, but the seemingly counter-intuitive inverse relationship between taxation rates and tax revenues ever since is well documented. Regardless of marginal rates, tax revenue as a share of GDP remained static in a narrow range of 18-20%, even in the 1960s when the top marginal tax rate was 90%"

http://ivn.us/2012/07/03/federal-revenues-are-historically-unresponsive-...

Your "source"

Is based on a dubious article from the Wall Street Journal, hardly non-partisan. Read the comments. The IVN article itself does not identify the author. GIGO

The IVN Author is Craig D. Schlesinger

Directly under the title, the author's name is clearly visible. To the right, this information is provided:
"Craig is a musician and holds a Bachelor's of Science in Finance from the University of Florida. Not affiliated with any political party, Craig describes himself as a classical liberal - regarding civil liberties, free ..."

Have you heard of Hauser's law? It is an empirical law. Historical federal revenues range from 18-20%. If you disagree, provide your refuting information and source. My sources is the federal government's Office of Management and Budget. Read the table cited in this source:

http://en.wikipedia.org/wiki/Hauser's_law

Logan, you can have your own opinion, but you cannot have your own facts.

I read your "sorce"

Many do not agree with your "law" or your facts. You are entitled to your opinion but don't own the facts either. Stick with the musician.

Something to add to the conversation?

Hauser's Law is an observation of federal income tax revenue compared to GDP; it is based on the empirical data from every year that the Unites States has collected income tax. The information is readily available; I cited the the federal government's Office of Management & Budget. I am not sure who, with the exception of you, does not agree with these facts. I anxiously await your rebuttal; all that is required is some numbers and reputable source.

Lunch is still not free

Mr. Rose:

According to your own figure, the top marginal tax rate in the Eisenhower years was 91%. Mr. Romney paid – in the only full tax return he’s allowed us to see – 13.5% on his many millions of income in 2010. I’d say there’s a vast difference in the income derived for the nation’s business and obligations, but I’m not likely to be granted access to the tax returns of the top 5% of the population in, say, 1952 and 2010 in order to make a direct comparison. Maybe someone else has already done so.

My point, which you conveniently ignored, is that the overall tax burden in current American society is lower than it has been since those Eisenhower years, and maybe just as important, whatever “burden” those taxes impose has largely been relieved by nearly-equal tax exemptions, the vast majority of them for individuals, and some of which I take advantage of myself (e.g., the mortgage interest deduction). Eric Black’s MinnPost piece took no sides on this, but he did provide a link to the Washington Post which even an internet bumbler such as myself was able to use without difficulty. As I noted previously, the CBO doesn't make things up.

To repeat: Whining about the “burden” of taxes is just that – whining. Overall, we’re paying less of our income in taxes than our parents did, and that proportion increases as one moves up on the income scale.

It’s an interesting set of blinders worn by some of MinnPost’s readers on the right: Mark Dayton inherited a pile of money and is somehow a pariah because of that good fortune, while Mitt Romney inherited a pile of money and is somehow the opposite. Just as has been the case with similar people in similar situations down through the years, being born on third base doesn’t mean you’ve hit a triple.

Dayton doesn’t pretend that he did, and I give him some credit for that. Meanwhile, Mr. Tester’s line(s) are equally applicable to the presidential candidate he supports: “…Money just flows into his bank account every month and he has no idea where it came from. His remarks were embarrassing, really. Reminds me of something Louis XVI would say.”

Indeed.

Is lunch free or not?

Mr. Schoch:

You have said, "There ain't no free lunch", but now you say "lunch is still not free". Do you understand the the math of a double negative?

"My point, which you conveniently ignored, is that the overall tax burden in current American society is lower than it has been since those Eisenhower years". You will need to back that one up. I think we are talking about the top marginal rate, which today is 35%. In 1988, 1989, & 1990, it was 28%; 31% in 1991 and 1992.

Grand theories aside, empirical data indicates that federal tax revenues versus GDP are insensitive to the top marginal rate. The question that I have asked is how much money is collected at the top marginal rate. It seems that I will need to answer it myself. The top marginal rate is a tool with great leverage for the politics of envy. Hence, the question goes gets ignored.

Besides the rate, the threshold at which it kicks is significant. For instance, in 1935 there was only one tax payer in the top marginal rate. "Between 1958 and 1986, an average of 14% of individual income tax revenues were generated at rates above 39.6 percent" (link below)

http://taxvox.taxpolicycenter.org/2011/12/01/top-income-tax-rates-and-re...

While hardly insignificant, the 14% collected at the top rate did not build the nation's airports and interstate highway, as the Governor seems to believe.

Is Hauser's a law or an opinion

A quick read tells me that Hauser's law is hardly conclusive. The static 18-20 percent of GDP for federal tax revenue is actually a fairly significant 14.5 to over 20 percent swing with higher collections marked in years following tax increases. , And it includes all revenue not just income tax. To argue that changes in rates in income tax do not change collections while not looking at just income tax revenue is misleading.

Besides, if I were to accept Hauser's as true and fast, the solution is easy. If we just raise taxes to collect what we spend, the economy will have to grow; after all federal revenues are 18-20 percent of GDP no matter what. GDP will grow to approximately 5 times federal revenue. Steve has made me a Keynesian.

Hauser's Law is an Observation of 67 Years of Data

Hauser's Law is an observation of empirical data. Yes, the range (extremes) of the data set is 14% to 21% over 67 years, while the top marginal rate moved up and down in a range of 28% to 91%. I find that to be remarkably stable. That is an opinion, and you are free to disagree.

Your idea to tax the economy into growth may not work. Why not instead, leave the money in the economy to grow the GDP? People will pay more taxes in a healthy economy by being taxed on greater income, and some of that income will be taxed at higher marginal rates.

Growth is the engine of the economy, not taxation.

Yet..

Hauser's law has nothing to do with tax rate. It has to do with a comparison of tax as a percentage of GDP. And the conclusion from this supposed "law" isn't that the government inherently took in the same amount of money. Rather, the conclusion is that (should the "law" be true, which arguably, it isn't), high tax rates of high income levels don't hurt the GDP. If it did, then taxes as a percentage of GDP would swing wildly higher than 20% because tax income would increase while GDP would decrease. But, it doesn't. Plus, 14% of the US GDP is pretty significantly different from 21% of the US GDP.

Compare:
http://en.wikipedia.org/wiki/File:U.S._Federal_Tax_Receipts_as_a_Percent...

to

http://www.tradingeconomics.com/united-states/gdp-growth

to

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=213

The T-Paw Legacy

T-Paw has left us a legacy: All taxes are bad, regardless of how they're spent. It was particularly amusing when he tried to impose a "user fee" on tobacco. When the courts told him that it had to be labeled as a TAX because of the tobacco settlement, he did a 180 degree turn and killed the bill.

According to T-Paw and the Tea Party, user fees are OK, but taxes are bad. It's just semantics, people. They're both forms of revenue and, in this case, from exactly the same source. How can a user fee on tobacco be good but a tax on tobacco be bad?

It's this sort of knee-jerk and extremely shallow reactionary thinking that drives me nuts.

How about a balanced approach? Cut government wherever we can and raise taxes as much as we need to to fill the remaining gap? I'd be willing to pay more if everyone else was in, too. I want to leave a legacy for my children, and not T-Paw's legacy.

Oppositional Defiant Disorder

Is one description for the psychological malady that inflicts those who bristle at being required to contribute to the public good. Their response to taxes amounts to nothing more nor less than an attempt to tell the government "You're not the boss of me."

They have exactly the same response to government regulations, even when it's clear that those regulations will save them millions of dollars of liability later.

I've known people who had the same response when they were caught speeding by the highway patrol: not an acknowledgment that they were breaking the law, got caught fair and square, and would now have to pay a justifiably deserved fine,...

but rather, statements to the effect that the (insert whatever expletive you'd like, here) highway patrol officer had done something wrong by catching them. If it hadn't been for that officer they wouldn't have had a problem.

Such people are trapped in a form of arrested preadolescence wherein they are unable to take responsibility for their own actions, nor to appreciate the importance of interdependent relationships.

Their focus is on their lives, and their own benefit, but the same malady generally makes it impossible for them to feel happy with their accomplishments and their wealth, no matter how much they have.

This dissatisfaction, too, they blame on others, since they are unable to look within themselves for the source of the discomfort with which their lives are so constantly afflicted.

They hate Gov. Dayton passionately, because he has what they can NEVER seem to achieve, a strong, internal sense of security and satisfaction, which I suspect would continue even if he had far less money. Who Gov. Dayton is, as a healthy, functional human being, constantly bumps them up against their own DISsatisfaction.

He is as much a burr under their saddles as FDR was for the same dysfunctional type of wealthy person a few decades back.

Did any of the dissenters actually READ this article?

It is stated clearly that most modern infrastructure, i.e. freeways, bridges, etc. were built or expanded under a very high tax rate of 93% for the highest earners.

In time, in order to keep these things in working order, you would need to spend the exact same amount plus inflation to replace and repair everything.

You can't do that if the tax rate is only 33-35% or less, or nothing, like it is for far too many millionaires and corporations.

Or is every anti-tax person just really really bad at math?

No, they're not. They support the underlying agenda of privatizing every freeway, every bridge, every school, every prison, and every other government service, AND....if the private sector cannot make a profit from it, the service will cease to exist, under their vision. A very dark vision, at best.