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Star Tribune wimps out in Dayton budget editorial

I'll admit my first reaction to Gov. Mark Dayton's $4.1 billion tax hike on upper-income Minnesotans was to tweet "WOW DOA." That was more political prognostication than personal view, but I don't blame anyone with mouth agape at the size of Dayton's hikes.

There's a healthy debate about having the nation's highest top-tier tax rate, but the Star Tribune muffed it with Wednesday's "Dayton plan misses competitive reality." The Strib came out against Dayton's tax hike without offering a deficit-closing alternative.

As Strib editorialists well know, if you don't like higher taxes, you need bigger cuts. (Please, spare me the "reform" dodge; you might save some money there, but this problem is far bigger than that.) But the Strib never suggests what those cuts will be.

Take more from poorer Minnesotans? Own it, Strib!

The editorial states Dayton should have broadened the sales tax or reduced income-tax deductions to lower headline-grabbing upper-income rates. It's unclear if those are mere shifts (that could hit less-weathy Minnesotans harder) or deficit-reducing hikes (that would likely require additional cuts). Meanwhile, another editorial suggestion — lower corporate taxes — would deepen the red ink, at least in the short term.

During the campaign, Republicans and the Strib (correctly) hectored Dayton for a deficit-closing plan he never convincingly delivered. Now he has. The GOP and Strib owe the public an honest, detailed alternative.

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Comments (21)

I thought the whole thing was disingenuous. Dayton himself ackonwledges that this plan is unlikely to pass unscathed through the GOP-controlled legislature. So to that end, it is simply an opening offer in a negotiation.

The facts upon which the editorial is premised are suspect. "Most states have tax systems more regressive than Minnesota's." Really? And what difference does it make to Dayton's widely-known tax policy preferences which party turned out to control the majority in the legislature?

To me, the central flaw of the editorial is this: "Dayton had reason to reposition his budget proposal somewhat closer to the Republicans with whom he must govern." Really? What reason? It will happen as a natural consequence in the process of legislating. It is either naïve or fatuous to suggest that one party to a negotiation should pre-compromise, especially when the other party has staked out an uncompromising position. There is no doubt the GOP is playing hardball to get what it wants, why should the Governor be held to a different standard?

Here's your honest alternative.

Dear Govt Employees:

RE: The tough times we are in and the future.

Your mission: Do less, with less, for less and enjoy the fact you have a job with medical coverage. If you can't figure out how to do that. Your bosses (my elected legislators) will do it for you. Just ask them. They are just itching to help you in this journey.

Will check back with you in May.

The People

Mr. Larson's lack of thoughtfulness is almost amusing, but it's a useful reminder of why the right wing typically makes for terrible government. My own elected representative might well suggest that Mr. Larson has no idea what he's talking about.

Among the several disappointments of moving to the Twin Cities – this is a terrible climate, which has to be experienced in every season for its awfulness to be fully appreciated – has been the 'Strib, and this morning's weasel editorial is but the latest example.

I've always thought it interesting that newspapers – correctly, in my view – insist that letter-to-the-editor writers include name, address, etc., so that the authenticity of the letter can be verified. As David has pointed out in a separate piece, even people WITH the 'Strib admit that something has to be done about the personal attacks of unidentified "commentators" on their website, yet editorial authors are allowed to hide behind the same mask of anonymity that's denied to lesser mortals, including regular reporters and op-ed columnists.

Nothing wrong with saying you don't like Dayton's budget strategy, but if you want to be taken seriously, show us alternative(s) that can at least plausibly solve the problem(s). "Do less, with less, for less…" isn't an alternative, it's posturing.

Something the Strib and every irrational, know-nothing "expert" fails to admit is that reducing corporate taxes will not create jobs; it never has, and the evidence has been there for decades to prove that.

At the same time, broadening the sales tax will not help, since the wealthiest send far less money as a percentage of income than do the poor and middle class; therefore, it would be a very regressive tax on those people.

Like it or not, the only way out of the deficit is to increase taxes on the top 5% of income earners. They were unjustly given tax cuts in the past, and look what they wrought. It's time for them to pay back their ill-gotten gains and start contributing their fair share to the state. If they don't want to do that, move; we won't miss you.

Mr. Schoch,

Alternative #1 - Freeze spending at current levels.

If we do this, like most MN families have done, we will have a surplus.

However, the typical, liberal reaction is to raise taxes. We already know that no matter how much we raise revenue, it will still not be enough.

Freezing spending will not be popular with anyone, but it may be the only solution. How will the liberals be able to “pay-off” their special interest groups without any additional money?

As stated time and again, if you don't offer alternatives for solving the problem, you're just whining. Shame on the Star Tribune editors for not offering alternatives to that which they find objectionable in Gov. Dayton's budget. After 8 years of "no new taxes" and the resulting cuts in government programs at every level, it's time to look at realistic ways of solving the budget deficit. Further cuts will only worsen the situation for the people of Minnesota. That's not the answer, and those who espouse it need to show how further cuts will NOT have adverse effects on Minnesota's citizens. Cutting corporate taxes solves nothing, either, especially in the area of job creation. History has shown time and again, despite the rhetoric of the Republicans, business tax cuts do very little to spur economic growth or job creation. Until we make it painful for companies to shift their manufacturing offshore, we will see little or no meaningful job growth in this country.

It's time to quit posturing and start working on solutions to the budget problems facing this state and this country. Politicians, know your constituents are watching!

I'm frustrated by this idea that we need to race to the bottom in terms of taxes. I don't see any need to compete with Alabama - or India - to supply cheap labor and low taxes. We built a great state on educated people and substantial reliable infrastructure. What a great opportunity to come out on top while other states cut both of those. As a reasonably educated youngish Minnesotan, if I were to start a business I'd start it here - not Alabama to save a bit on taxes - because I don't want to be in Alabama, nor could I find a multitude of creative educated people.

The abstract conservative premise, which has intuitive merit but is not evidence-based, is that a higher tax rate will lead to lost business, jobs, and a diminished future tax base.

But the same intuition could have told Delta that if they charged for baggage, they'd lose customers to Southwest. Maybe they do, but the revenue has been worth it as this week's news indicates. Meanwhile, several other airlines can now also benefit from baggage fees because Delta does also. (I actually don't remember which airline went first, but anyway.)

Once Minnesota raises its tax rates, it makes it easier for Wisconsin, etc., to follow. The competitive reality lost on the StarTribune is that sometimes self-interest is served by raising a cost and that competitors are not necessarily static but might more easily follow the lead out of their own necessity. If the StarTribune had integrity and wasn't just looking out for business interests, they'd advocate Minnesota seeking a joint pact with multiple states to raise corporate taxes.

Admit it, David and you other liberals: Dayton's presentation was merely a political act not a serious solution to our budget woes. He's judt trying to pick up political capital by playing on the DFL's old worn-out attempts to create class conflict and envy. Most people have seen through that charade.

Come back and blog about it when he has a serious proposal.

In it's current incarnation, the Star Tribune is a moderately pro-business newspaper. Editorials like today's and endorsements of Coleman and especially of Horner bear that out. The muzzling of the more outspoken columnists like Nick Coleman, and even Katherine Kersten, who make moderate businessmen nervous is also evidence of that.

It's always been my opinion that what drives economic growth in Minnesota is a high quality education system, from early childhood through the university, and that's something that doesn't come cheap. Business will pay lip service to the desirability of lower taxes, but what creates business here is educated workers, and what persuades business to come here is quality of life, and that includes great schools.

Enough of this false analogy of the family budget is like the state budget. That ideas got more holes in it than your pasta collander. If this were true consider the camy budgets of the huge number of poor. Unemployed, underemployed, etc. And what about those with mortgages and car loans. I'm thinking that's not just a few of us. In fact I'd bet most off those "living within their means" are pretty well
off or are practiciing ascetics. The metaphor has never worked. If fact I'm glad my family budget does not have the responsibilities a state budget has. The questiIon is who has the vision to see that mission as it was promised? Or who will welsh out on the vig. Actually maybe we should ask those five percent who would be affected by Gov Dayton's proposal. I'd bet the farm the majority should say go for it. But I may never know because the data is not going to be gathered. Because wishes ain't fishes. I'd love to see the poll instead of Bill Cooper and Jason Lewis trying to metaphorically mail a living barking budget at the post office.

Hal - I pointedly did not endorse Dayton's plan because it's not really my point.

My point is we are at the Rubicon. Election's over. One has to balance the budget, and has to show their work. Saying "his taxes are too high" is sophistry unless you say "here's what I'd do instead."

Negotiating position? Sure, could well be. But the point is that Dayton is the only one whose math works. It's up to other comers to prove their "seriousness" with detail. This is the honest way for Minnesotans to judge. Perhaps an all-cuts budget would reveal some "class conflict" of its own but we won't know as long as we let ourselves dance around hard choices.

Memo #2 By Eric

Mission- To Balance the state budget without
asking any state tax payers to pay more.

The Givens -
1. Governor can not raise taxes.
2. Legislature will not raise taxes
3. Off mission comments about property taxes
and Failed Minnesota Miracle are considered

Action Gram- Learing Point

It is come to our attention that we are not
offering enough specifics. Well specifics are
not our job. Ex. Lets say a department head
was presented with a un-expected and pleasant
suprise of a one time windfall of lets say
ONE MILLION DOLLARS. Would not we all agree
that the department supervisors and the right
minded employees could figure out the best way
to spend the extra funding in a way that would
do the taxpayers and Minnesota the best?! They
are experts and close to where the rubber
meets the road. Solution found.

Word Problem Excercise

Therefore- When we have a not so unexpected
shortfall. Don't we all believe that these
very same people should be able to best
mitigate the shortfall in a way that would do
the least amount of harm? If not, their bosses
(our employee legislators)can do it for them.
They are just chomping at the bit to try.

We will follow up on this serious matter around
the 3rd Weekend in May. Gotta Go.



Broadening the sales tax would actually make it more progressive because the wealthy tend to spend more on clothes and services than mere mortals. Former Speaker Dee Long did a pretty extensive study of this a few years back and you can bet if Dee says it'll make it more progressive, it will.

I have no problem with what the Strib wrote. The editorial page is well, the editorial page. Dayton's proposal is a non-starter. It will go no where and merely adds to the great divide on how to handle the budget mess. See California and New York for other examples of politics over reality.

Does a temporary tax increase of some type make sense? Yes. Are couples making $150K a year "wealthy"? No.

What should they do? First the pension mess must be addressed. The unfunded amounts at the local and state levels are a huge piece of the issue. Public employees should be forced into 401K plans with benefits similar to the private sector. Ditto for medical coverage into retirement.

Government should also be required to cap spending to projected revenue like the rest of us. If special needs are out there, then the voters should have a say.

Businesses are very mobile. If the cost of doing business gets too high, businesses will relocate. Again, see what has happened to California with their jobless rate. Or soon to be bankrupt Illinois.

$2000 that goes to Dayton and the rest of the politicians (be it Democrat or Republican) is $2000 less a small business has to pay for employees or purchase services.

So -- a limited temporary tax increase, higher for the wealthy but spread across all income earners since all benefit from programs. Firm reform in pensions and retirement medical coverage for public employees to dramatically reduce labor costs. A hard look at all government programs and an honest discussion on what government needs to do with reductions in duplication.

And finally an honest debate on education and an end to the "spending more money produces better results".

One point to another commenter Mr Friedman. One reason Delta shifted their corporate headquarters to Atlanta was dramatically lower taxes. Minnesota lost many high paying jobs.

Tax rates do matter to corporations and cities like Atlanta, Dallas, etc have a very solid and well educated workforce.

Mr. Foster: If you really mean what you say, why did you find it necessary to write "...even Katherine Kersten...."

Mr. Gotzman:

It is well and good for families to "tighten their belts" during hard times. But equating a family budget with a state budget is misleading at best, and totally dishonest at worst. Read some economists not named Friedman or Greenspan if you have trouble believing this.

The Timberwolves have better odds of winning the NBA title this season than the Legislature going along with a top personal income tax rate of just under 14 percent. It's time for the legislature and the governor to actually start working on a comprehensive budget solution instead of simply jabbering about it.

Somebody pays either way. Under Dayton's proposal, the top 5% in income earners pay and the slide in quality and range of educational and social services is slowed. If the Republican plan (assuming there is one) wins, the poor, sick, small employers, property taxpayers, students, etc. pay. It really is that simple.

One more thing: How can it be that increasing only the marginal rate on a mere 5% of the population can raise $2.4 billion? And that a surcharge on those who make more than $500,000 will raise another $918 million? The underlying problem has been income and wealth disparity -- that's why there are too many people with incomes too low to support themselves decently, and why the general population more broadly can't afford to pay more in taxes.

Dayton's solution takes a few small steps towards rectifying this problem, and I applaud him for it.