Taxing 'the rich' isn't enough. We need longer vision [Dayton spending 'unsustainable']

St. Paul Pioneer Press ^ | 7/3/11

[rhema]

What we have here is a failure to compromise. Much of the state budget could have been passed, but the governor chose not to get those parts of the deal done. At midnight the lights went out unnecessarily on lots of state workers and government functions tied to parts of the budget that could have been passed. At the 11th hour legislators proposed a lights-on measure that would have kept the government running for a few more days. The governor dismissed it as a gimmick.

In other words, bring on the pain - an unnecessary infliction of pain. But, as they say, sometimes you have to break a few eggs to make an omelet. The DFL governor is apparently thinking he can inflict enough pain on the state to force the Republican Legislature to its knees.

Let's be clear. The Legislature passed a complete budget and sent it to the governor. He vetoed it. Meanwhile, the governor has yet to put forward a full budget himself. Instead, he put forward a set of numbers without the details to back them up.

One thing the governor is very clear about, though, is taxing the rich. Please don't misunderstand. We are not all that particular about taxing the rich. They won't go hungry and they can go somewhere else if they don't like it.

Problem is, taxing the rich is a Band-aid, not a solution. We already have one of the higher state income taxes in the nation, so clearly high income taxes don't produce balanced budgets.

And if you think even higher income taxes in an already high tax state are the answer, take a look at how things are going in New York, California and New Jersey. Those states have even higher income taxes than we do and still have all the same budget problems, if not worse.

It would be much easier to get behind the soak-the-rich agenda if were working for other states, but it's not. Or if the governor had a budget of his own and would explain to us how this approach will work not only in the upcoming biennium but in the one that follows and that one that follows that.

What's the plan? Tax the rich, then tax the rich again, then tax the rich again?

While tax revenue will be up nearly 6 percent this year, Dayton wants spending to increase 12 percent. This kind of spending is unsustainable. The Minnesota State Demographic Center predicts a 4.1 percent annual rate of revenue growth between 2010 and 2020. Meanwhile, with very little total population growth, the 65+ population is about to skyrocket - increasing more in this decade than it has in the last 40 years combined. So what we are facing is the lethal combination of low workforce growth, low revenue growth and high growth in entitlement spending.

The governor is silent on this, the issue of our time. Silent, perhaps, because the holy grail of the left, taxing the rich, can't possibly solve the problem.

As we have said before, Gov. Mark Dayton is an honorable man who ran on tax increases. He won by the skin of his teeth: 8,000 votes and 44 percent of the electorate. But he won. Taxing the rich is an article of faith for the governor and his base of supporters, and he will do his best to see it through, breaking eggs as needed along the way.

And to repeat, we're not necessarily against increasing the taxes of the rich in an already high-tax state, except that it is largely besides the point. It's a Band-aid.

The real issue is the accelerating demographic shifts that, it would seem, defy solution via taxation. We urge Gov. Dayton to lead in this area by laying out his long-term vision for addressing the demographic trends that are upon us.

[rhema]

Wonder of wonders, the lead op ed staff editorial in the SPPP exposes the Gov's petulance and demagoguery.

. . .It would be much easier to get behind the soak-the-rich agenda if were working for other states, but it's not. Or if the governor had a budget of his own and would explain to us how this approach will work not only in the upcoming biennium but in the one that follows and that one that follows that.

What's the plan? Tax the rich, then tax the rich again, then tax the rich again?

While tax revenue will be up nearly 6 percent this year, Dayton wants spending to increase 12 percent. This kind of spending is unsustainable. The Minnesota State Demographic Center predicts a 4.1 percent annual rate of revenue growth between 2010 and 2020. Meanwhile, with very little total population growth, the 65+ population is about to skyrocket - increasing more in this decade than it has in the last 40 years combined. So what we are facing is the lethal combination of low workforce growth, low revenue growth and high growth in entitlement spending.

The governor is silent on this, the issue of our time. Silent, perhaps, because the holy grail of the left, taxing the rich, can't possibly solve the problem.

[Caleb1411]

Let's be clear. The Legislature passed a complete budget and sent it to the governor. He vetoed it. Meanwhile, the governor has yet to put forward a full budget himself. Instead, he put forward a set of numbers without the details to back them up.

The governor's "plan": "Gimme money, lots of money. I don't owe the peons an explanation of where it's going."

[rhema]

"We are not all that particular about taxing the rich. They won't go hungry and they can go somewhere else if they don't like it."

They will.

Millionaires go missing.

"Here's a two-minute drill in soak-the-rich economics:

"Maryland couldn't balance its budget last year, so the state tried to close the shortfall by fleecing the wealthy. Politicians in Annapolis created a millionaire tax bracket, raising the top marginal income-tax rate to 6.25%. And because cities such as Baltimore and Bethesda also impose income taxes, the state-local tax rate can go as high as 9.45%. Governor Martin O'Malley, a dedicated class warrior, declared that these richest 0.3% of filers were "willing and able to pay their fair share." The Baltimore Sun predicted the rich would "grin and bear it."

"One year later, nobody's grinning. One-third of the millionaires have disappeared from Maryland tax rolls. In 2008 roughly 3,000 million-dollar income tax returns were filed by the end of April. This year there were 2,000, which the state comptroller's office concedes is a "substantial decline." On those missing returns, the government collects 6.25% of nothing. Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year -- even at higher rates."

[Eric in the Ozarks]

Minnesota is a great place to live. Just too much government...

[SVTCobra03]

“Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year — even at higher rates.”

When you raise taxes on the wealthy they just invest in tax-exempt income streams. Liberalism really is a mental disorder.

[Vaduz]

Wonder why hacks have such a hard time with two words own and owe?.

[Happy Rain]

“Raise taxes on the boss to get a raise?”
“Seize more money from payroll to increase the payroll?”
“Divert productive private capital to nonproductive public “works?”
Keynes is both the most beloved and most failed economist the world has ever known and the Left will pound his destructive policies until reality gives way to totalitarian fantasy.

[kabar]

In the US Congress, the Dems have not presented a budget for almost 800 days. The welfare state is collapsing and the Dems want to postpone the inevitable by increasing taxes. Evenutally, as Maggie Thatcher has reportedly said, “You run out of other people’s money.”

[Senator John Blutarski]

..... Let’s see how long it is before some genius from the Left tries to make a case for an “expatriate tax” or to restrict the physical relocation of citizens from one state to another. The same spurious arguments that the 0bama administration is deploying against the Boeing relocation will be tried against individual citizens of sizable means.

Yes, such a act would be blatantly unconstitutional, but the Left really doesn’t care about such trifles.

[conservatism_IS_compassion]

"Soak the rich" economics is Extrapolation Economics.

Extrapolation is founded firmly on the assumption that "If one is good, two is precisely twice as good."

"Liberals" incessantly prattle about the environment, and how we should moderate our use of fuel because of external effects such as "global warming" or some other version of "the sky is falling."

But when it comes to taxation, people who will hire tax lawyers to minimize their own tax liability will solemnly and indeed vociferously argue that tax rates have no negative effect on the total taxable activity which will be reported to the government. Thereby grounding their linear extrapolation of revenue firmly on the quicksand of hypocrisy.

[Colonel_Flagg]

What we have here is a failure to compromise.

Actually, what we have here is a governor who got 43 percent of the popular vote who's on medication.

[org.whodat]

What a head line, I read it and thought there was a problem in
Dayton, Ohio. Damn!!!!

[exDemMom]

Problem is, taxing the rich is a Band-aid, not a solution.

It's not even a Band-aid. One can't even call it a placebo, since studies have shown repeatedly that placebos do have measurable positive effects despite being only sugar pills.

The problem isn't that the rich, who are already paying more than their fair share of taxes, aren't paying enough. The problem is that too many politicians have attitudes towards spending like that portrayed in the old joke, "I can't be broke. I still have checks left!"

[muawiyah]

Let's propose for a moment that you have a Washington DC area "power couple". They could be made up of a couple of lawyers, or maybe top level career government administrators ~ and their incomes could easily make the $300,000 level.

With astute investment they might have substantial outside income in 401(k) accounts, as well as taxable private investments in a stock fund.

They could make a MILLION BUCKS A YEAR.

So, where will they live? Will it be Maryland? There are some elite communities in suburban Maryland and a major university, plus private schools. There's also high taxes, fancy restaurants, live theatre, riding stables, beaches, etc.

Or, will they live in Virginia? We have the same elite communities, a major university, plus private schools. We have several restaurant districts ~ with more of a focus on ethnic goodies than classy stuff, but still an adventure. There are riding stables, live theatre, and if you want to drive, a lot of beaches!

Oh, yeah, we have LOWER TAXES.

So, which is it ~ HIGHER TAXES or LOWER TAXES.

The only such folks I've seen chose Maryland have come from Chicago!

Good lord are those people stupid!

[muawiyah]

California already did that. They wanted to tax any retirement income that derived from previous employment in California. That case went to the USSC who said "NO, and HELL NO".

So, yes, Leftwingtards are that stupid ~ and stupider.

If you're retired, don't move to California.

[New Jersey Realist]

In the immortal words of the Beatles:

One, two, three, four...
Hrmm!
One, two, (one, two, three, four!)

Let me tell you how it will be;
There’s one for you, nineteen for me.
‘Cause I’m the taxman,
Yeah, I’m the taxman.

Should five per cent appear too small,
Be thankful I don’t take it all.
‘Cause I’m the taxman,
Yeah, I’m the taxman.

(if you drive a car, car;) - I’ll tax the street;
(if you try to sit, sit;) - I’ll tax your seat;
(if you get too cold, cold;) - I’ll tax the heat;
(if you take a walk, walk;) - I’ll tax your feet.

Taxman!

‘Cause I’m the taxman,
Yeah, I’m the taxman.

Don’t ask me what I want it for, (ah-ah, mister Wilson)
If you don’t want to pay some more. (ah-ah, mister heath)
‘Cause I’m the taxman,
Yeah, I’m the taxman.

Now my advice for those who die, (taxman)
Declare the pennies on your eyes. (taxman)
‘Cause I’m the taxman,
Yeah, I’m the taxman.

And you’re working for no one but me.

Taxman!

[abb]

But when it comes to taxation, people who will hire tax lawyers to minimize their own tax liability will solemnly and indeed vociferously argue that tax rates have no negative effect on the total taxable activity which will be reported to the government. Thereby grounding their linear extrapolation of revenue firmly on the quicksand of hypocrisy.

Excellent logic, CiC! We need to ask Ben Stein does he employ a tax attorney the next time he runs off at the mouth about how tax policy doesn't affect decision making.

[blam]

How about an ‘exit’ tax, lol.

[conservatism_IS_compassion]

We need to ask Ben Stein does he employ a tax attorney the next time he runs off at the mouth about how tax policy doesn't affect decision making.

. . . or else simply ask, "How much money do tax lawyers make, anyway?"

How big is that industry?