3-21-13 Waconia Patriot Letters to the Editor

Governor’s tax plan leaves much to be desired

To the editor:

Governor Dayton has been the source of some excellent teachable moments this year.
Now that he has heard from a variety of taxpayers including the business community and his own party, he is back on track with his original intent — taxing the rich. Last week he spoke to the Minnesota Chamber of Commerce luncheon in St. Paul. In his comments to the 650 members, the Governor stated that he was still going to tax the top earners. “We need the revenue,” “I don’t know how else to get it,” “I believe in it,” “I believe its right,” and “I believe its fair,” he said.
These quotes are illustrative as they indicate how the Governor and his party think. Clearly they are no friend of the “free market” and “supply side” economics. Rather they insist on “class warfare” in order to endear their supporters. His 2 percent tax increase, (7.85 to 9.85 percent) on the top earners is estimated to bring in an additional $1.1 billion in revenue. However that assumes all else remains static. A mistake in our lackluster economy?
The Governor was surprisingly hostile to the Chamber attendees. He criticized them for not supporting his original plan for increases in a variety of sales taxes. Conducting his own personal “conclave,” he chose Minnesota as the best place to grow a business and raise a family — not only in the nation but the world! I’m told there was a little white smoke coming from his podium!
Now for those pesky facts. According to the Tax Foundation, for fiscal 2013, Minnesota’s state business tax climate rank is 45th with our state income tax ranked at 44. Our corporate income tax of 9.8 percent makes us 12th highest. Tax Feedom Day in Minnesota was the 8th longest in 2012 ending on April 23. So much for white smoke!
The Governor also said, “Just saying no to tax increases is not a budget plan and it’s not responsible.” Well evidently continually saying “yes” to spending increases is? His proposal is for a 7 percent increase in spending to $37.9 billion. Let’s not forget the cost of the new Minnesota Health Exchange and the federal side of spending including Obamacare.
Any objective review of “supply side” economics will show that private sector investment is encouraged by lower tax rates. Historically this has resulted in more revenue to the government. How is that possible you say? Businesses and people are willing to put their money to work investing in economic expansion which create more jobs. You might say, “investment is on sale” when you lower the rate and expand the base, you create more tax revenue. The Democrats categorically reject this idea.
By the close of this session (May 20), we will see how far Minnesota Democrats were willing to push their agenda. They have critical decisions to make between now and the 2014 midterm elections. We will be watching.

Joe Polunc