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Horner responds to revenue concerns

Following reporting about Independent Tom Horner’s tax and budget plan, his campaign sent out this clarification:

There’s been some confusion today over the Department of Revenue statements. I would start by actually encouraging everyone to view the video that the GOP links to on YouTube. Their shortsighted complaint loses out to reason. I actually think it’s a great exchange. In it, Horner says that with his tax reform plan, we started with Department of Revenue numbers and that after going back to the Department of Revenue with the plan, the department said the campaign’s numbers add up within the parameters we outlined. All of that is true.

 

This conversation seems to have morphed at some point from “Do Horner’s numbers add up?” to “What was the exact format for asking the Department if the numbers add up.” But even if that has become the question, nowhere did Horner contradict himself. Many of you have already spoken to me about this so pardon if I’m repeating myself. But this is an issue that deserves a thoughtful response. The Horner-Mulder budget outline assumes a $1.3 billion net increase from the sales tax reform (other tax revenues are derived from tobacco, alcohol and income tax expenditures/credits). The sales tax reform includes:

 

(A) Dropping the rate by one point(B) Continuing to exempt food, medical, prescription drug, business-to-business services(C) Expanding to clothing and a variety of consumer services.

 

What we did was went back to the Department of Revenue using the Department’s own numbers in order to confirm our math. There are a variety of ways to raise the necessary revenues by broadening the sales tax base to additional consumer services. The Department of Revenue Tax Research Division confirmed that we were correct in that analysis. Though this was originally done by phone weeks ago, much like Rep. Emmer’s vetting, we went back to them yet again to have them type that language out for us.

 

When it comes to choosing which consumer services to tax, we have always maintained that will be a top agenda of the Horner administration working in partnership with the legislature, consumer and industry groups, and others through aggressive public engagement in order to determine the best solution for Minnesotans and Minnesota’s economy. What we have done is set the target to reach under the substantiated assumption that there are different ways to get there, especially depending on the state of the economy.

 

We cannot continue to pretend that any gubernatorial candidate can run on a platform that assumes there is no need to work with the legislature or economic and consumer experts in order to determine a responsible approach to tax reform. It’s the reason why everyone from sitting legislators to think tanks to former Minneapolis Federal Reserve chief Art Rolnick to former Department of Revenue commissioner John P. James have looked at our budget plan and said that sales tax reform is the right move.

 

While many DFLers have falsely claimed that we are proposing a reduction in corporate income taxes in the next biennium, the Horner-Mulder plan does not propose doing that until the second bi-ennium of the term, and only once the budget deficit is resolved. To reduce corporate income taxes without paying for it may be a proposal of one campaign, but not this campaign.

 

To the credit of all three candidates — Senator Dayton and Rep. Emmer included — there are three distinct tax proposals out there for Minnesotans to evaluate. One assumes we can raise the top rate of the income tax at or near the highest levels in the nation without doing dramatic harm to both Minnesota’s economy and the state government’s ability to budget without significant cyclical volatility. The second proposal assumes that we can cut state government revenues and services to the bone and simply rely on shifting the costs to local governments and property tax holders. The Horner proposal assumes we need to build a tax system that reflects the economy that actually exists today — a system that gives us the stability to budget responsibly and invest soundly in Minnesota’s future.

 

I continue to find it ironic that any political party hundreds of thousands of dollars in debt would question our campaign’s ability to budget responsibly.

 

Best,Matt  Secretary Horner2010

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Comments (2)

  1. Submitted by Thomas Swift on 10/01/2010 - 12:53 pm.

    “What was the exact format for asking the Department if the numbers add up.”

    Are they serious?

    The Department of Revenue says they did not revue Horner’s tax plan. What part of that format does team Horner not understand?

  2. Submitted by Richard Schulze on 10/02/2010 - 05:47 pm.

    //[Rep Emmer] assumes that we can cut state government revenues and services to the bone and simply rely on shifting the costs to local governments and property tax holders.//

    //The Horner proposal assumes we need to build a tax system that reflects the economy that actually exists today — a system that gives us the stability to budget responsibly and invest soundly in Minnesota’s future.//

    Good one Tom 😉

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