Nonprofit, nonpartisan journalism. Supported by readers.

Donate

Revenue analysis finds House GOP tax plan regressive

MORNING EDITION

To the surprise of no one, the Minnesota Department of Revenue has run the numbers on the House GOP’s version of the tax plan and declared it … regressive. MPR’s Tim Nelson files several posts on Monday’s exchange of “correspondence.” The actual letter says, among other things: “According to our analysis of HF 42, the major provisions in the bill would have the following impacts:
Increase property taxes by $859 million over the next three years as a result of local aid reductions and, if combined with the reductions in property tax refunds paid to renters, would total $1.2 billion of increased property tax and reduced property tax relief over the next three years.
The reduction in the proportion of rent assumed to be property tax for renters from 19% to 12% will make the tax system more regressive. The proposal will reduce the total amount paid in refunds by about 50%, dropping the average refund paid by $300 from $643 to $343. Approximately 38,000 renters, or about 12% of recipients, would no longer receive a refund.
Net property taxes would increase for all classes of property, including farmers, homeowners,and businesses. Business taxes would increase $63 million statewide next year despite the proposed reduction in the statewide business levy.
Property taxes would increase by an estimated 4.3% statewide, including 3.7% in the metro areaand 5.3% in greater Minnesota.
The difference between planned local aid reductions and expected property tax increases — about $230 million per year — is the anticipated amount by which local governments would reduce costs and services.”

The consensus is that this (please, please) last week of wintry weather has tamped down flood crests, at least in the Twin Cities. Madeleine Baran of MPR is reporting: “The Mississippi River was at 18.4 feet in St. Paul on Monday morning — far short of the 26.4 feet recorded in the historic flood of 1965. City officials said they expected the river to rise to 19.2 feet by Wednesday. Rick Larkin, St. Paul’s director of emergency management, said the river is moving at 100,000 cubic feet per second just as fast as Niagara Falls during the summertime. … At Montevideo and Granite Falls, the river is expected to crest by Wednesday morning, but officials expect the damage to be minimal and limited mostly to major roads. Jones said he’s been closely watching the weather north of the Minnesota River — that area still holds considerable amounts of heavy, wet snow. Several rivers, including the Chippewa and Pomme de Terre, are expected to send more water south into the Minnesota River, boosting the chance of a second crest. … the Red River in Fargo-Moorhead is still below flood stage, but the National Weather Service said there’s a 50-50 chance the river will reach record levels this spring. The Red River usually crests later than rivers in southern Minnesota. This year, the river is expected to crest in early to mid-April.”

Despite all those companies and millionaires being lured by the good life in Wisconsin and South Dakota, a new study predicts Minnesota will lead the Upper Midwest out of the recession. Dee DePass of the Strib writes: “Minnesota has enjoyed a resurgence of manufacturing and business services over the last few months. Minnesota’s GDP declined 2.3 percent in 2009 and is expected to post a 0.04 percent growth rate for fiscal 2010 and 2.6 percent for fiscal 2011, according to the U.S. Bureau of Economic Analysis and various economic reports. Actual results are not expected until later this year. … IHS Global Insight predicts U.S. GDP will grow 3.2 percent in 2011 alone. But over the next five years, Wisconsin is only predicted to grow 2.47 percent a year on average. Iowa? By 2.53 percent a year. In contrast, North and South Dakota should grow a respective 2.45 percent and 2.43 percent, the report said.”
                                            
Maybe the trickle down will follow. A piece by David Phelps in the Strib tells of high-end retailers moving into  the Mall of America: “They include a lifestyle store from designer Michael Kors, upscale footwear retailer Stuart Weitzman and an A/X Armani Exchange store with street-chic fashions. The mall is also adding the Sky Deck Sports Grille and Lanes with bowling, video games, sports viewing and dining. The new stores also include Naartjie Kids, a children’s clothing chain with roots in South Africa; Bettie Page, a nostalgia boutique for retro clothing from the 1950s; See’s Candies, owned by Warren Buffett’s Berkshire Hathaway Inc., with its first permanent Minnesota store; and outdoor footwear specialist Merrell Shoes.”

Without offering a lot of specifics, Strib business columnist Eric Wieffering comes to the aid of Best Buy, assuring readers that somehow the big firm will ride out this latest slump, too: “In the near future, though, the Big Box is giving way to the little one: Best Buy plans to open only eight or 10 U.S. stores in the current fiscal year, which ends in February 2012, but it will add almost 150 stand-alone Best Buy Mobile stores in the coming year, bringing the total to 312. The company is also expanding its online-only inventory of televisions and other products, and improving search functions and other capabilities on bestbuy.com, which rang up $2.5 billion in sales last year, an increase of 14 percent. But the store remains central to Dunn’s belief that it’s the best place to show consumers how to get the most utility and enjoyment from the latest and greatest in technology. ‘The question we’re asking is, ‘What can we do for our customers that nobody else can’?’ ” Well … if you’re not going to offer discounted refurbs, like Refurb Depot, or guarantees on used gizmos, like Amazon, or a two-year warranty like Costco, maybe you could come up with a cell phone contract that wasn’t as dense and expensive as a mortgage?

What may be most amazing about U of M prof Jay Coggins’ response to Steven Cunningham’s March 25 Strib commentary (“The rich are getting richer, right?”) is that  people who are smart enough to operate a calculator are still having a debate over who’s got the money. Says Coggins: “The Gini coefficient measures inequality for all of us, not just the poor. It can be zero (if income is distributed equally); it can be 100 (if, impossibly, a single family captures the entire national income), or anything in between. A higher Gini means more inequality. The Census Bureau tells us the U.S. Gini has risen from 39.4 in 1970 to 46.2 in 2000, and to 46.8 in 2009. Government programs and taxes can and do reduce inequality, though. After accounting for their effects, the U.S. Gini coefficient falls to 38. How does this compare to Ginis for other rich countries? We take the top prize. Our 38 leaves us tied with Portugal atop the rankings of the richest countries. American exceptionalism indeed. Not since the Roaring Twenties have the richest in America had it so good.”

Debra O’Connor, the PiPress’s “Watchdog” columnist, has a good one up: “The college senior in Colorado felt cheated when for $23 per page she ordered a custom-written term paper from a Twin Cities company and it wasn’t delivered on time. Never mind that she was cheating by passing off a paper written by a stranger as her own. She complained to the Better Business Bureau about Essaywritingcompany.com, owned by Jordan Kavoosi of Farmington. ‘I ordered it, and they were supposed to have it back to me within four days,’ she told the Watchdog. ‘I constantly emailed. Nobody replied to me. Then (Kavoosi) calls me and says under no circumstances am I going to get a refund.’ It wasn’t the first complaint filed against the company, which has resolved most of those registered with the Minnesota BBB. But President and CEO Dana Badgerow calls Kavoosi an ‘entrepreneur who is skating on the thin edge of legality, and for sure he’s plunged into what we think is unethical behavior.’ “

Aaron Klemz, one of the kids blogging at The Cucking Stool, rips into Rep. Linda Runbeck (GOP) for being down with stripping LGA away from Minneapolis, St. Paul and Duluth but keeping the faucet open to cities in her district. “Runbeck is delivering an increase in Local Government Aid to her district while slashing LGA for the economic engines of Minneapolis, St. Paul and Duluth. Two cities in Runbeck’s district are certified to receive LGA in 2011, Circle Pines and Lexington. Circle Pines is scheduled to receive $233,811 in 2011. This is a 15% increase over 2010’s certified amount, and a nearly tenfold increase over what they actually received ($27,244) in 2010. If the property tax ‘reforms’ proposed by Runbeck pass, she’ll succeed in simultaneously delivering a windfall to her district while obliterating the cities. Lexington, another city in Runbeck’s district … would see an increase in 2011 from what they received in 2010 ($296,869). This is quite a windfall for the cities in the district of the legislator who charges that LGA creates “dependency” and needs to be axed.”

Meanwhile “Chad” at the Fraters Libertas blog links to a post by David Mills, pointing out the hypocrisy of lefty “counter-culturalists” now sneering at homeschooling because people like Michele Bachmann are for it. This may be the central point … I think: “The critics found themselves so alarmed, of course, because now politically, culturally, and religiously conservative parents were educating their children at home and rejecting the influence of a system in which the critics — so many of them former counter-cultural types themselves — were heavily invested. And also from which, in many cases, they drew their income. Teachers who explained American history in terms of commercial self-interest were not heard admitting, much less condemning, their own self-interest in maintaining the educational order and the systems of control over others it required.” Sorry, but my Montevideo public school education left me unprepared to explain what he’s talking about.

Comments (6)

  1. Submitted by Neal Rovick on 03/29/2011 - 07:58 am.

    A distillation of the Republican outlook;

    From a October 17, 2004, The New York Times Magazine article by writer Ron Suskind, quoting an unnamed aide to George W. Bush (later attributed to Karl Rove:

    “The aide said that guys like me were “in what we call the reality-based community,” which he defined as people who “believe that solutions emerge from your judicious study of discernible reality.” … “That’s not the way the world really works anymore,” he continued. “We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality—judiciously, as you will—we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors…and you, all of you, will be left to just study what we do.””

  2. Submitted by Ray Schoch on 03/29/2011 - 08:25 am.

    Indeed, facts mean little to the latest version of Republicans. “We make our own reality” is akin to that famous emperor proudly displaying his new suit of clothes.

    And speaking of clothes, MOA officials might be surprised if they check further into “Bettie Page.” It ain’t just “retro clothing” that Ms. Page specialized in, as a simple Google search will show…

  3. Submitted by Paul Udstrand on 03/29/2011 - 11:00 am.

    //And while you’re studying that reality—judiciously, as you will—we’ll act again,…

    I just have to point out, this was one of Karl Marx’s basic tenet’s, make history, don’t just study it.

  4. Submitted by Barbara Miller on 03/29/2011 - 11:08 am.

    It is a testament to my slippery slide down and out of the middle class that not only do I could I never afford to shop at MOA’s new tenants, I don’t even know who the heck they are.

    Now given that I refuse to shop at employee-crushing WalMart, and once again at our very own GOP funding and homophobic Target, and given that I no longer purchase in quantities large enough to justify CostCo membership, I guess it’s time to turn my retail attention to Arc Value Village.

    This is an immensely weird era.

  5. Submitted by Greg Kapphahn on 03/29/2011 - 12:39 pm.

    When you’re trying to construct a world in which you, with your particular set of psychological dysfunctions (shared with most of your “conservative” friends) are lifted up and celebrated, whereas those with their personalities still intact, i.e. those who are capable of the things you are no longer capable of: trust, love, empathy and compassion, are seen as defective if not dangerous,…

    the holes that are left in your personality and your soul as the result of having pieces of your personality locked away by your psyche, leave holes in your perspective and your ability to comprehend the world around you…

    holes that make it impossible for you to entertain the existence of countervailing facts and information.

    When pressed with the reality of such information you respond with anger which quickly flashes to rage. This particular brand of “conservatives” sees the world, can ONLY see the world, in exactly the way they already see it. Such people will swallow wholeheartedly the craziest theories and follow the craziest leaders in order to “feel” as if they are right about everything.

    Without professional help (which their dysfunctions preclude most of them from ever seeking or accepting) they will go to their graves believing themselves to have been right about everything long after the world has come to the conclusion that they were wrong and would have destroyed society if allowed to restructure it in the only ways that would have been acceptable to them.

  6. Submitted by Rich Crose on 03/29/2011 - 12:53 pm.

    In all the talk about if the rich are getting richer no one is mentioning that the wider the wealth disparity, the deeper we bury the American Dream. Hard work and determination will only make you a millionaire if you are 6′-11″ tall.

    If you are born middle class in America, you have the same chance of becoming fabulously wealthy as winning the lottery –1 in 195 million.

    On the other hand, without an education, you have a 1 in 35 chance of getting a job that pays a living wage.

    Hope springs eternal. You might as well play the lottery.

Leave a Reply