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Typical Pawlenty: Slash the safety net, raise property taxes, and cut taxes for the wealthy

The state of Minnesota faces an unprecedented budget crisis and what does Gov. Tim Pawlenty propose? How about higher property taxes for average Minnesotans, a shredded safety net for those at the bottom, and hefty tax cuts for big corporations.

The following is an editorial that appeared in the Ely/Cook/Tower Timberjay.

How typical.

The state of Minnesota faces an unprecedented budget crisis and what does Gov. Tim Pawlenty propose? How about higher property taxes for average Minnesotans, a shredded safety net for those at the bottom, and hefty tax cuts for big corporations.

It’s utterly shameless, and vintage Pawlenty.

Just consider those big tax cuts for corporations. Pawlenty wants to slash the corporate income tax by 20 percent, ostensibly to encourage the creation of jobs. In reality, it’s a big tax giveaway that will send desperately-needed tax dollars primarily to big banks and huge retailers, like Walmart, few of which are actually based in Minnesota. More than 70 percent of this tax cut will go to corporations that already make in excess of $2 million in profits annually. Our potential tax dollars will simply pad their bottom lines, and more likely contribute to bigger bonuses to top executives or payouts to shareholders, than create any new jobs.

A 20 percent cut in the corporate income tax won’t help most Minnesota corporations. That’s because only about 40 percent of them actually earn enough profit to incur any income tax liability. That figure, which dates from 2005, is probably lower today since most small businesses are struggling in the current economy.

And of those 40 percent that do pay taxes, most pay very little, because they don’t make huge profits. In fact, Minnesota-based corporations (which are the small businesses most of us deal with in a typical day) pay just 7 percent of corporate income taxes in the state. Large corporations, mostly based out of state, incur 83 percent of tax liability in Minnesota, which means they will receive 83 percent of the benefit of Pawlenty’s tax cut. Giving such corporations a hefty tax break has the effect of shipping our scarce tax dollars out of state. It may be a good plan if you’re running for president and want to attract contributions from corporate big shots, but if you’re trying to solve Minnesota’s budget crisis, it’s inexcusable.

That’s not to say that tax cuts for businesses are worthless when it comes to job creation. But such incentives should be tied to actual job creation. Pawlenty’s proposal provides no linkage whatsoever. Multinational corporations could slash their workforces here in Minnesota and still reap the rewards of Pawlenty’s tax cut. That’s just stupid.

If Pawlenty actually wanted to help small businesses, he wouldn’t have spent the last seven years slashing local government aid. Look up and down the Main Streets of any of the communities in our area, and most of the owners of the storefronts you see will pay more in property taxes this year than they will in corporate income tax. Most of these businesses won’t see any effect from Pawlenty’s tax cut, but they will feel the property tax bite from his latest round of LGA cuts. Main Street businesses pay a big chunk of the tax bill in most small towns and as LGA is continuously cut, these same businesses end up picking up much of the slack.

Which is why this plan is so typical of Pawlenty. For his entire political career, Tim Pawlenty has believed in comforting the comfortable, and forcing the rest of us to pay the bill. His latest budget plan is just more of the same. Slash the safety net. Raise property taxes on struggling homeowners and small businesses. And lavish big giveaways on the biggest and most profitable corporations.

And to think he now wants to take his philosophy to Washington. Come to think of it, he should fit right in.

This editorial is reprinted with permission.