Skip to comments.Taxing the Wealthy(Gov Dayton-Mn)
Posted on 05/31/2011 3:29:33 AM PDT by Son House
During this contentious legislative session, we've seen rallies and protests against cutting from state government programs that help the disabled, elderly, and low income residents. But with Governor Mark Dayton insisting to raise taxes on the top 2% of the state's money makers, Republican lawmakers say those are small business owners who create jobs. We went out to see how a potential tax increase would effect them.
"Don't worry, we won't tax jobs out of state," exclaims republican House Speaker Kurt Zellers.
It's been the campaign and legislative slogan for State republicans: "No new taxes", citing small businesses as the potential victims of tax increases. But how far is the rhetoric from the truth?
"A tax on the top 2% is really hitting small business where it hurts," says Steve Yaggy, owner of Yaggy Specialized Transportation.
Yaggy is one of the business owners that would make the governor's cutoff for higher taxes. But he says that doesn't make him rich.
"The people I know that are small business people fall into that category yet, the 1% or 2%, but only because they're running a small business, not because they're rich or they're millionaires," he says.
Many small businesses are S-Corporations, a business classification that keeps them from paying corporate income taxes, but require owners to lump their business income with their own take-away pay when filing individual taxes.
"That doesn't mean you have any money left. You could take that much money into your cash register and have that much in expenses as well," explains Yaggy.
As a business consultant, Jeff Bigler does okay for himself. He has a small business in Rochester with a few employees and does well enough that he can afford to give to a few charities as well.
"Lourdes: Building our future, Hiawatha Homes, to name a couple."
Bigler says understands how spending cuts could lead to less money for those who need it. But while a roughly $7,500 tax increase would not break the bank for him, he says it would likely lead to less donations and slower business growth.
"It limits our choice, giving more government choice as to where my dollars might be spent. And I'd like to have the choice to see where those dollars go."
As for the Governor changing his tax proposal...
"Would you be willing to go to the top 1%?"
"Anything is negotiable, but somebody needs to come with a proposal," says Governor Mark Dayton.
For now, Governor Dayton is sticking by his plan.
Please ping the Mn list(as if they didn’t already know...)
Dayton is of Dayton-Hudson. Is Kurt Zellers of the Zellers dept. store chain?
What a lot of people don’t get is that small business owners put their own capital up for their companies. Thus, their active income also includes a return on that capital. Nonbusiness owners are taxed much less for their capital investments, which are less risky, and by having their investments taxed separately their active income may well be taxed at a lower rate as well.
The higher the tax on small business income, the greater the deterrence from starting and staying in business—and hiring and retaining employees.
Minot, ND, is looking good right now.
Why not Minot?
Twenty below keeps the riffraff out.
Under Perpich and a DFL house about 30 years ago it was South Dakota who prospered from the destruction of the Minnesota business atmosphere.
It's North Dakota's turn NOW.
The truly wealthy shelter their income in tax-exempt foundations. Hence, tax increases "on the rich" almost always fall hardest on the upper middle class.
Ask the Dayton:
Do you want more revenue or do you simply want to punish the so called rich?
Revenue is only ever maximized at these reduced tax rates.
The spending side of the equation is always ignored as the factor creating the deficits.
He's got a proposal. Marx Dayton vetoed it.
Going Galt has a lot of appeal right now.
ND has the benefit of not having the country’s 4th largest legislature.
They also only meet every other year. (less damage they can do)
how about taxing all legislators and bureacrats more and living the not taxpayer funded jobs alone.
Here’s a novel idea. Why not cut state spending by 2% instead?
Democrat Tax Plan:
War - raise taxes
Peace - raise taxes
Economic boom - raise taxes
Economic crash - raise taxes
It’s sunny - raise taxes
It’s rainy - raise taxes
They never learn, do they?
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Same old tired democrat playbook to take from the producers and give to the leaches. They never learn.
Thanks for the ping. :)
Someone light up a doobie in her honor, mon.
At least with dayton we know at some point, he’ll give up.
He’s got what the republicans have to offer. if he does not like it.
SHUT IT DOWN! Clock runs out at the end of the month and expect for my mother (who works for the state) I don’t know of anyone that would notice.
That is misleading.
From your source, “slightly more than half of it from investments in tax-exempt municipal and state bonds.”
You should understand that tax-exempt bonds yield a lower interest rate than other investments. So investors are accepting lower rates of return in exchange for the simpler tax situation. A corporate bond would pay a higher interest rate, yielding more income, then income tax would be due, and the after-tax return would be the same or slightly more than the tax-exempt bonds. In your example of Heinz-Kerry, investing in taxable bonds might have pushed total income up to $6M, and they’d have paid $1.5M in total taxes, or 25% overall tax rate. Nobody would then have called them tax cheats. Either way, they would end up with $4.5M after-tax. Basically, the Feds sacrifice the tax revenue as a benefit to the locality.
The only real beneficiary is the local government selling the tax-free bonds — because they get to pay a lower interest rate on money they borrow to overspend at the local level. I would eliminate tax-free bods for that reason, and not because it somehow allows investors to “get away” with something.
"Simpler"? Is that all? rotflmao.
BTW, my dad was a municipal bond financing consultant for thirty years.
The only real beneficiary is the local government selling the tax-free bonds
And you should have seen the corruption for the benefit of developers in those. Further, you have not addressed the tax exempt foundations the wealthy use to both hide income and benefit their investments. Both are criminal and massive.
“Further, you have not addressed the tax exempt foundations the wealthy use to both hide income and benefit their investments.”
Nope, I didn’t disagree with your second point, just the misleading statement about tax rates on the $5M as though it should have all been taxable.
One can make lots of money that is untaxed following the tax laws in the US. Warren said that he could avoid all income taxes by never “trading” his assets, in some cases perhaps borrowing against his holdings at 0-1%, or in others trading “essentially equal” assets, a non-taxable event, when rearranging a portfolio. The wealthy need never pay income taxes. It is for the middle class dummies.