The linked story tells me that the Republicans control the legislature, that the Governor is a democrat, that they disagree over the budget, and that the resulting impasse is shutting down the government.
The question is, did the Republican legislature pass a budget or not? That is, is MN government shutting down because the legislature hasn't done its job, or because the Governor vetoed the budget and is holding everything hostage to extort higher taxes?
If the Repubs have passed a budget and the Governor has vetoed it, the shutdown is on his head, period.
. . .Despite what you may have heard, a government shutdown is not necessary. The Republican budget as passed by the Minnesota Legislature in May funded government operations, providing an increase in spending. Gov. Mark Dayton vetoed it.
At $34 billion, the Republican budget is the largest in state history. It is $4 billion more than the state raised in revenue for the current biennium. But it's not enough for Gov. Dayton. Gov. Dayton wants to raise taxes to grow government.
The problem with Gov. Dayton's budget is that it does not exist. Since revising his tax proposal a month ago, the governor has failed to identify how he would spend the $1.8 billion in additional revenue. Thus far he has not proposed any reductions in spending to close the budget gap. Even with his increased tax burden on small business owners and job providers, Gov. Dayton still doesn't have the money to fund his proposed spending.
His non-existent plan isn't anything he or his administration is apparently worried about. During a recent Commission on Planning and Fiscal Policy meeting, the Minnesota Management and Budget Commissioner said a plan did not exist. That simple statement defines the governor's. He has no plan. He just wants to raise taxes, and he is getting ready to shut down government in a careless attempt to force the issue.
Both the GOP House and Senate budget targets propose to spend just over $34 billion in the upcoming budget cycle. That’s a fact.
The next fact is that the state will spend about $30 billion in the current budget cycle, which ended June 30.
Any first grader can tell you that these numbers mean that the GOP intends to INCREASE spending in the next budget cycle, not CUT spending.
The numbers make for about a proposed 13% increase in state spending.
Only in leftist government world does a 13% INCREASE in government equal to a “severe cut”.
The cause for panic amongst the Marxist set was the annual release of the Minnesota Tax Incidence Study published by the Minnesota Department of Revenue (DOR).
The study causes lawmakers and policy makers to sit up and take notice because it is thorough, accurate, reputable, and professional. The study is put together everyyear by a team of non-partisan tax professionals at DOR who enjoy a reputation forunbiased and objective work in an area that inevitably attracts emotional and vitriolic rhetoric.
The same reputation for professional and unbiased work, unfortunately, isn’t enjoyed by the “journalists” who toil at the liberal rags that pass for newspapers and legitimatepublic policy web sites.
They shrieked their collective horror at the study’s conclusion that the top 10% of income earners in Minnesota pay 10.3% of their income in state and local taxeswhile the other 90% pay 12.3%.
This news, of course, drives liberals nuts because in their world, successful peopleshould be punished while the less successful should be rewarded. The lever for thatbalancing is the government, which is asleep at the switch, in their view.
Inevitably, the news over the next days and weeks will be filled with calls by the DFL and their media allies to “balance” the state’s increasingly “regressive” tax system by raising taxes on job creators and, by the way, bringing some more moolah into state coffers to help sustain those double digit spending hikes that are so critical to the government economy that sustains liberal politicians by sustaining their political patrons (e.g. teacher unions and the social services industrial complex).
The dirty secret is that these outlets are cherry picking the data and not telling the full story.
There are two ways that a tax system becomes more regressive. The first is to cut taxes for those at the top of the income distribution ladder. The other way is to increase taxes for those at the bottom.
All taxes aren’t created equal. Some are progressive in nature while others are regressive.
A system has been created to measure taxes on this continuum. The “Suits Index” is a system that tells us which taxes are progressive and which are regressive and how much so.
Check out the taxes that are most regressive:
· Tobacco taxes;
· Minnesota’s “sick tax” to fund state health care;
· Utility taxes;
· Gasoline taxes;
· Estate taxes;
· Gambling taxes;
· General sales taxes;
· Corporate taxes (which in some fashion are passed to consumers).
Think about it. Dems have participated in raising just about every one of these taxes in the recent past. And then they turn around and cry foul over a system that has become more regressive.
Now there are two way to fix this “problem,” if that’s what you think should be done from a public policy perspective.
You could adopt the rat plan, which is to raise progressive taxes, meaning the income tax, and therefore bring more money into government.
The alternative is to cut regressive taxes, which is what House Speaker Kurt Zellers suggested in response to the media breathlessly demanding his reaction to the newsthat job creators and other successful people aren’t ponying up their “fair share.”
Are the wealthy paying up when it comes to taxes?
Take the income tax, for example.
When broken down by decile, you can see that the successful pay the majority of the income tax. And the less motivated amongst us?
The bottom 10% don’t pay ANY income taxes. In fact, they get back from the state over $17 million through refundable credits and other goodies.
The next 10% pay NO income taxes and receive $23 million in refunds.
The next 10% pay in, net, a little over $4 million, which is less than 1% of the total income tax collected.
The next 10% pay, net, about $80 million, about 1.1% of the total.
The next 10% pay, net, about $207 million, about 3% of the total.
The next 10% pay , net, about $357 million, about 5% of the total.
The next 10%, net, pay about $526 million, about 7.5% of the total.
The next 10%, net, pay about $788 million, about 11% of the total.
The next 10% pay, net, about $1.2 BILLION, about 17% of the total.
The next 10% pay, net, about $4 BILLION, about 56% of the total.
Put another way, the top 20% (those with household incomes above $90,000 per year) pay nearly three-quarters of the income tax while the bottom 20% pay nothing and even get something back.
Put another way, the top 5% of households (households income above $183,000) pay about 43% of the income tax.
Put yet another way, the top 1% (household incomes above $430,000 per year) payabout 25% of the income tax.
That is what the media won’t be telling you about Minnesota’s tax burden.
Are the successful paying their fair share? They most certainly are and then some.
If the DFL wants a more progressive system, maybe they ought to rethink all the regressive taxes they’ve embraced to satisfy other elements of their constituency.
I’m in Minnesota and have watched this whole thing closely. Its important because I believe its a coordinated plan by Dems at the national and state level. They’re desperate and know they have nothing to run on in 2012 and are trying to force Republicans to commit political suicide. I think Minnesota is the test and if it works they will do it in DC.
Dems see it as a win/win. Shut down in a way that causes the most pain and blame it on Republicans. If Republicans cave, they will lose TP voters. They probably hope TP goes third party splintering the conservative vote. Its all about 2012.
Dayton is doing what he’s been told to do — he’s not at all bright.
If the Repubs have passed a budget and the Governor has vetoed it, the shutdown is on his head, period.
They did, he did. Dayton owns it.