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Millionaires, it turns out, not cool with tax increase idea

AFTERNOON EDITION

“Obnoxious” is the word longtime DFL kingmaker Vance Opperman has for raising his taxes. Dee DePass and David Phelps of the Strib write: “Minneapolis publisher and prominent Democratic fundraiser Vance Opperman called it ‘obnoxious’ to single out a group of high earners in Minnesota to balance the budget. But he added that he supports funding education ‘no matter how you raise the money. … That’s what sets us apart from other states.’ He suggested the state look at revenue-raising options such as expanding the sales tax and instituting structural tax reforms to reduce annual revenue volatility. …. others feared the tax increase would stifle philanthropy, curtail profit sharing and ultimately brand Minnesota as a difficult state in which to do business. [Ecolab CEO Doug] Baker, who earned $8.5 million last year, said Dayton’s approach to solving the state’s budget deficit is bad policy because the plan would lift Minnesota’s tax rate to twice that of Illinois. Instead of taxing the rich, Baker said he would tax clothing, consumer services and other items. ‘We know this stuff is pretty progressive and it hits the people [harder] with more income,’ he said.”

An AP story this morning looks at the not exactly peripheral question, “What kind of Minnesota do we want?” It says: “According to the nonprofit Kaiser Family Foundation, in fiscal year 2009 Minnesota was 21st out of 50 states in the amount of state money spent per resident. The state’s per capita spending that year was $5,677, higher than large states such as Florida, California and Texas but lower than neighbors such as Iowa, Wisconsin and North Dakota. ‘Minnesotans built this community over a number of years thanks to high levels of education, a strong safety net, an investment in infrastructure, good civic involvement and low political corruption’, said Jay Kiedrowski, a state finance commissioner in the 1980s. Some believe that legacy is on the line.”

A Wall Street Journal story, by Amy Merrick, captures the essence of today’s going-nowhere-fast dynamic: “In a statement Thursday, Mr. Dayton said, ‘Most of the committee’s recommendations parallel my own proposals.’ But the governor continued to argue that income taxes should be raised only on the wealthiest Minnesota residents and said ‘most other Minnesotans are already overtaxed, due primarily to the 75% increase in property taxes statewide during the previous eight years.’ He called on Republicans to accept one of his offers, adopt the independent panel’s suggestions or propose a new deal. On Wednesday, Republican lawmakers ridiculed Mr. Dayton’s latest proposals, which presented the choice of raising income taxes on residents earning more than $1 million a year or increasing cigarette taxes by $1 a pack. Ms. Koch and House Speaker Kurt Zellers sent Mr. Dayton a letter Thursday calling his proposal ‘incredibly disappointing.’ ‘We view this as a giant step back from where we were just last week,’ said the letter, which also asked for an updated list of the governor’s proposed spending cuts.”

House Majority Leader Matt Dean has some ideas for Gov. Dayton. A Strib commentary, penned by him, says: “1. Abandon your continued call for tax increases. State revenue will increase $3.1 billion in the next biennium. We can fund the priorities outlined in your State of the State speech without taking any more money from struggling families and businesses. We don’t need an income tax increase or a cigarette tax increase. And we certainly don’t need the across-the-board income tax proposed by the Carlson-Mondale commission. … 5. Call for an end to the outside political activity by your allies. Minnesotans know it’s too late to be fighting over the last election and too early to start fighting about the next one. They are fed up, tapped out and anxious about their houses, their jobs and their kids. They have neither the time nor the patience for this shutdown or the politics around it. Serious negotiations can begin when the political campaign is halted. Minnesota is gaining unwanted and unneeded national attention for failing to come to agreement while every other state has resolved its differences. Notably, the Democrat governors of California and New York resolved their budgets without raising taxes or shutting down state government.” So California’s problems are solved? I’ll have to alert my pal in San Francisco.

MPR’s Tom Scheck files a piece on our push toward a record for state shutdowns: “If the shutdown lasts until Sunday, Minnesota will have the longest state shutdown since 2002 — the year The National Conference of State Legislatures started tracking the data (info from NCSL posted below). There were three state government shutdowns in 1991 — Pennsylvania, Connecticut and Maine. Pennsylvania’s shutdown was limited because the governor has the authority to continue many services. Pennsylvania’s budget battle in 1991 meant state employees continued to work but didn’t receive a paycheck. That impasse lasted 34 days. Maine’s impasse that year lasted 17 days. It was considered an ‘on and off again shutdown’ where state workers were ordered off the job for all but three days of the impasse. The dispute dragged on as the two sides disagreed over changes to the state’s worker’s compensation laws. Connecticut’s impasse in 1991 lasted from July 1 until August 23.”

The latest on The Shutdown from T-Paw the candidate who fought the budget wars and “won”: Eric Kleefeld of Talking Points Memo writes: “Pawlenty, who is struggling to break out in the presidential field, has been cheering on the Republicans in his home state — and likening them to Republicans in Washington who are holding out on the debt ceiling. On Thursday, during an Iowa/Facebook Townhall event, he boasted in remarks that were e-mailed out on his campaign press-list:

‘I applaud the Republican legislature in Minnesota for standing strong and standing firm and saying we’re not going to raise taxes in Minnesota. We don’t have a state in Minnesota that’s over-taxed, we have a state that has spent too much, before I became governor, and we’ve got to get it back in balance.

‘I share that with you because it’s similar to the challenges seen in Washington D.C. going on with this debt ceiling limit issue. They’ve got the President and Republicans negotiating, and I urge our Republicans in Washington D.C. to stand strong. The only way you get real change in Washington D.C. is to draw lines in the sand. And if you notice, most politicians are like running water downhill. They want least resistance. So it’s helpful, in having them do bold and courageous things, to put up some points of resistance.’ ”

 I apologize if you were drinking something hot when you read that.

Lynda Waddington of The Minnesota Independent files a piece off news from Ladbrokes, the British betting operation: Michele Bachmann currently has 7-to-4 odds of emerging victorious from the Iowa caucuses, says a British bookmaking site. On both sides of the big pond, however, bookies and the Iowa Electronic Markets are pointing to President Barack Obama to give a repeat performance in the general. Ladbrokes.com, a London-based gambling company in existence since 1886, had Bachmann at 5-to-2 odds just two weeks ago, but now sees the congresswoman as a safer Iowa bet — although perhaps not as ultimately profitable as some other possible wagers. … While the Brits might be bullish on Bachmann in Iowa, they cool on her chances of capturing the GOP nomination. Currently, she has 6-to-1 odds in that category — well behind a safer bet for former Massachusetts Gov. Mitt Romney, who has 11-to-8 odds of being the party’s nominee. If Bachmann does capture the political party’s flag, Ladbrokes currently gives her 20-to-1 odds at winning the presidency.”

I had to run this one by me … again. KARE reports: “A city council member from St. Francis was issued a misdemeanor citation for Filing a False Police Report from an incident last week. On Friday, July 1, Leroy Schaffer called the St. Francis Police Department to report a suspicious package he received in the mail. When an officer arrived, Schaffer showed him the package with a postmark from Chicago, IL still in the mailbox. Schaffer told the officer he thought it was a bomb because, ‘he was in politics and has lots of enemies.’ ” It was a fake hand grenade. … Detectives found a sheet of address labels from the ‘Paralyzed Veterans of America’ with one label missing. There was an identical label used on the package. Schaffer was interviewed by Detectives and admitted he drove to Chicago and sent the package to himself. He indicated he did so for sympathy from the public, claiming, ‘There’s a lot of people out there that want to kill me, that’s why I sent it to myself.’ ” That last line deserves a “quote of the year” nomination.

Oh, and an update on the dude who was chased down and admitted he had shot himself up with “bath salts”KARE also reports: “According to the criminal complaint, Andrist told police that he is currently injecting bath salts. He admitted he used meth in the past but told police that bath salts had the same effect for less cost. Andrist has ten prior DWI convictions and four prior Fleeing Police Officers in a Motor Vehicle convictions on his record. He has one other felony DWI conviction on April 29, 2005 for which he served jail time.”

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Comments (12)

  1. Submitted by Paul Brandon on 07/08/2011 - 03:47 pm.

    I assume that the St. Francis Police Department will bill Mr. Schaffer for costs, if not have him prosecuted for lying to the police (see Anthony, Casey).

  2. Submitted by Greg Kapphahn on 07/08/2011 - 04:18 pm.

    Sorry, Mr. Opperman. YOU LOSE!

    There are countless Minnsotans who have worked their backsides off over the past thirty years. SOME of us, the wealthy, have seen our incomes double, triple, even quadruple while providing little, if any, additional benefit to society.

    OTHERS of us have seen their incomes stagnate and even go backward.

    Some are now unemployed as the result of policies of corporations that didn’t care in the least about their hardworking, loyal employees, locally, but only worried about raising their own profits and executive compensation.

    Those who were making out the best received a MASSIVE TAX CUT ten years ago. Furthermore, they now have a hugely DISproportionate amount of the income and assets of the state in their own possession (as measured by the actual benefit they are providing to society).

    Even under Gov. Dayton’s “tax the rich” proposal, our wealthiest friends would STILL NOT end up paying as much by percentage as their middle class fellow citizens, nor would they be paying as much by percentage as they did back when Minnesota was known as “the state that works.”

    My question for you, Mr. Opperman and all your wealthy friends is this, “Considering that your wealth is a direct result of the money your ancestors and fellow citizens have spent through state and local governments to provide all the infrastructures upon which your enterprises have always depended, where the h-e-double toothpicks, to you think you get off expecting all the people with LESS money than you to pay far more than their fair share to support the things it takes for you to continue at your current level of income?

    And if you think you deserve as much money as you can manage to extract from all your fellow citizens because you’re not happy, yet, you don’t need to consult bankers and economists to tell you WHY you deserve more. You need to consult with a reputable shrink who will help you understand why, no matter how much you have, you still feel as if you never have enough.

    And who, of course, will help you recover from the dysfunctions that cause you to feel that way.

    If you don’t comprehend, yet, that you can’t buy happiness, get the help you need to discover how it is you might rediscover how to feel fulfilled and satisfied regardless of the state of your balance sheets.

  3. Submitted by will lynott on 07/08/2011 - 05:15 pm.

    Vance Opperman called it ‘obnoxious’ to single out a group of high earners in Minnesota to balance the budget.

    My, my. Please, someone ask him why, instead, it’s not obnoxious to single out the working and middle classes instead.

    Jesus wept..

  4. Submitted by Steve Sundberg on 07/08/2011 - 05:19 pm.

    Re: Opperman. Haven’t the wealthiest already benefited from significant tax CUTS the past 10-15 years while middle- and low-income haven’t (until Obama came into office)? Wouldn’t any tax increase actually bring the wealthiest back to some kind of parity?

    Sorry, but Opperman doesn’t get my sympathy in this. If the wealthiest 0.3% in Minnesota simply can’t afford to pony up the extra $1000 or so, then they have far bigger problems maintaining their standard-of-living than any Dayton tax plan.

  5. Submitted by Andy Champ on 07/08/2011 - 06:03 pm.

    Dear Mr. Opperman,

    This PDF document will tell you all you need to know about the “obnoxiousness” of tax rates in Minnesota:

    http://www.itepnet.org/wp2009/mn_whopays_factsheet.pdf

    Sincerely,

    Average Minnesotan

  6. Submitted by Jeff Wilfahrt on 07/08/2011 - 09:21 pm.

    Simple case of the king has no clothes.

    We all need to laugh out loud at this.

    Jeff Wilfahrt, Rosemount, MN

  7. Submitted by will lynott on 07/09/2011 - 02:09 pm.

    Opperman is unwilling to pitch in with the rest of us to aid the state that has so richly benefited him. Unbelievable. He makes me think of the pro athlete who turned down tens of millions here to take an even bigger paycheck elsewhere, because, after all, he had to feed his family.

    Nauseating.

  8. Submitted by Jon Kingstad on 07/09/2011 - 06:49 pm.

    Vance Opperman has been a major DFL kingmaker since I’ve lived in this state. I’ve attended three DFL State conventions and he was always a presence there working to advance the agenda of this or that politician. I now have an understanding why Mark Dayton stood on the sidelines at the 2000 convention while Opperman worked the delegates for votes for his guy.

    His comment shows his true colors and allegiance in this showdown.

  9. Submitted by Sam Joseph on 07/09/2011 - 07:20 pm.

    there is no truth that the middle class pay a higher percent of their income on minnesota taxes than the wealthy. the study that shows that is seriously flawed. but even if it were true, it would only be because the wealthy spend less money as a percent of their income than the middle class does – and hence avoids the strictly voluntary taxes such as sales tax, cigarette tax, and lottery tax…. they also spend less of their income on property tax, because they choose to spend less of their income on housing. they very clearly spend more of their income on income tax.

  10. Submitted by will lynott on 07/11/2011 - 07:32 pm.

    #9, forget the income tax. The only relevant issue is total tax. The following shows that the rich pay a much lower percentage of their income on taxes overall.

    http://www.itepnet.org/wp2009/mn_whopays_factsheet.pdf

    In case it’s news to you, the republican insistence on lower state taxes has, for the last decade, had an equal and opposite effect on local property taxes, the most regressive tax there is. Pay attention now–this means that low income families, seniors on fixed incomes, and the former middle class, all are taxed at a higher rate than your precious rich.

    Sorry to break your toy.

  11. Submitted by Sam Joseph on 07/12/2011 - 09:56 pm.

    Hey Will, I looked at the link to the info on who pays how much tax. I have a question. How is it possible that the lowest decile of minnesotans pay 6.5 percent of their income on sales tax, when the minnesota sales tax rate is around 7 percent. Is it possible that almost every single thing they buy is subject to sales tax? Dont they buy clothes? Food? What about all the property taxes they spend money on – there’s no sales tax on that! Something doesn’t add up.

  12. Submitted by will lynott on 07/13/2011 - 09:05 am.

    #11, the sales tax rate and the percent of income spent on it are not connected mathematically. When the lowest decile buys an item that is subject to the sales tax, they pay the price of the item plus a bit over 6.5% OF THE PRICE OF THE ITEM as the sales tax. And, as the table shows, they spend about 6.5% of their income in this manner. The fact that the two unrelated numbers are the same order of magnitude is a coincidence.

    Beyond that, I can’t be bothered to do your research for you. I suggest you direct further questions to the creator of the table, the Institute on Taxation and Economic Policy.

    http://www.itepnet.org/

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