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Tuesday Talk: How do we achieve a fairer tax system?

January 18, 2011 By Joe Sheeran, Communications Director

Today, we’re releasing our latest report: Minnesota’s Tax Fairness Retreat. It looks at how Minnesota’s tax system has become more regressive since 2000, meaning lower- and middle-income Minnesotans are shouldering a larger proportion of the state’s tax load. Overall, middle-income earners pay 10.3 percent of their income in state and local taxes, compared to the state’s wealthiest, who pay 7.7 percent. What’s your take?  How do we achieve a fairer tax system in Minnesota?

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106 Comments:

  • John Crampton says:

    January 18, 2011 at 9:32 am

    Simple, make the richest 2%ers start paying taxes at progressive rates that they paid during the 50s and 60s when our economy was growing and creating jobs and record prosperity.  The disinvestment that has occurred since Reagan and especially since W. Bush has produced stagnation and a hollowing out of our country’s productive resources. 

    PS Milton Friedman is dead and was full of horse hooey when he was alive.

     

  • herbert a. davis,jr. says:

    January 18, 2011 at 9:45 am

    If we are not willing or able to go back to a truly progressive tax system similar to the 1950’s with progressivity, high rates and few deductions, then it is all tinkering while the country slips further into financial chaos.

    Check out the “history of federal income tax rates”....you will see what made this country work in the past and where we have to go if we want anything other than Amexica- a country with 2% wealthy and 98% poor and willing to work for peanuts….of course, we could save a few bucks just downsizing our empire and wars!

  • David Akerson says:

    January 18, 2011 at 10:37 am

    The only fair tax is a flat tax rate. Each and every person would pay the same flat tax rate on the money earned.Do away with most of the IRS as you would not file a tax return. You paid your tax. And all money coming in is taxed no matter how you get the money. This would be a fair tax system and I challenge anyone to say it isn’t. Unless of course you don’t work and are on the public dole system.

  • Josh says:

    January 18, 2011 at 10:47 am

    The question is how you define wealthy.  Many of the “wealthy” in this state who are sole proprietors of small businesses, meaning that there is no distinction between personal income and business income.

    As such, they may make $200,000 of sales a year, but after paying employees, buying new inventory, rent, electricity etc they may only actually make $50,000 a year for personal use.  There are a number of deductions that they can use because this scenario is common.  The issue is that it shows that they pay a lesser percentage of income because they are known to be making $200,000 per year, but only taxed at their income minus deductions.

  • Dan C says:

    January 18, 2011 at 11:02 am

    A flat tax is definitely wrong.  Someone earning $15,000/year can’t afford 23% in taxes. They need every penny they earn just to live.  Someone eaning $1,000,000/year can easilypay 23% a year in taxes. and have w0,000/year left over.  There fore the lower income person should have their tax eliminated and the rich person bumped up.  Now, if you are looking to eliminate the RS and H&R Bock, fine.  Make the taxes progressive with NO deductions, period.  Then, you’ll have fair and progressive taxes. No maore games on the part ofthe rich.

  • Mike Downing says:

    January 18, 2011 at 11:15 am

    You answered your own question with your title.

    Read Neil Boortz’s book The Fair Tax. It applies equally to states & the federal government.

  • herbert a. davis,jr. says:

    January 18, 2011 at 11:22 am

    Flat tax or national sales tax is regressive.

    It might be better than what we now have. No need to come up with a new system that we don’t think will work when we can return to an old highly progressive system that we do know WORKS!

    We got away from the old system to benefit the rich so they could get richer and we bought into being “trickled down on”....it didn’t work for the government or most of us.

    Every wealthy person wants any change to be towards a “flat tax” (anything but,progressive).

  • Lois says:

    January 18, 2011 at 11:36 am

    This is a response to Josh.  The small business owner in your example would pay taxes only on the $50,000 left over after all the expenses you mentioned, not the $200,000 earned in sales.  This is basic accounting.  Any small business that can’t figure out how to file that paperwork isn’t going to be in business very long.

    The argument that a progressive tax structure will inhibit hiring is spurious because wages paid are an expense, and thus reduce the amount that the business will owe in taxes.

  • WAYNE says:

    January 18, 2011 at 11:42 am

    AS A FLAT TAX ADVOCATE ( REGRESSIVE, I KNOW), THERE IS THE VALUE OF US ALL BEING IN IT TOGETHER AND INCENTIVE FOR ALL TO PARTICIPATE/ VOTE . AMERICAN’S GREATEST MOTIVATOR IS HOW IT HITS MY POCKETBOOK. ” THE BEST TAX IS THE ONE I DON’T PAY”

  • Lois says:

    January 18, 2011 at 11:44 am

    The argument that a flat tax will simplify tax filing overlooks the fact that what makes filing complicated is not the calculation of tax owed on taxable income, but the calculation of what qualifies as taxable income.  If we eliminate all or most of the deductions to income, a large portion of which can only be taken advantage of by relatively wealthy people, it would vastly simplify tax filing. 

    I myself don’t bother to itemize tax deductions, so it only takes me a couple of hours a year to prepare my tax return.  Most of this time is taken up with the annual financial review I should be doing for my own record keeping anyway.  Of course, if I owned a business it would take me much longer, but it would be time I should be spending on accounting anyway.

    To make the tax system fairer, we should eliminate most or all deductions, raise the standard deduction, and tax the rest at progressive rates.

  • Lois says:

    January 18, 2011 at 12:19 pm

    Although I favor a progressive income tax as the means by which most tax revenue is generated, there is one kind of tax that people on the other side of the political spectrum are calling for that I believe has merits:  a consumption tax.  Overconsumption of natural resources, namely fossil fuels, is an addiction that will kill us.  The consumption tax I favor is also called a carbon tax, and the plan I favor is the bipartisan CLEAR Act (S 2877), proposed by Senator Maria Cantwell and Susan Collins. 

    Also called “Cap and Dividend”, the CLEAR Act would put a tax on carbon at the source (oil well, coal mine, port of entry, etc), then rebate the American people 75% of the revenues from the tax, on an equal per capita basis, with the remaining 25% going to build green energy infrastructure. 

    The tax would be low initially to avoid economic shock, but would be incrementally raised over time.  The increased cost of fossil energy would ripple through the economy, increasing the price of nearly everything in proportion to the amount of energy required to make and distribute it.  This would provide a powerful disincentive to use fossil fuels wastefully, while providing a powerful incentive for investments in efficiency, conservation and renewable energy alternatives.  Businesses that figure out how to use less fossil energy would do well, while those mammoths that don’t would fail.

    The people who would feel this tax the most would be 1) those who use the most energy—people with big cars, big houses and jet skis, and who fly a lot (mostly rich people), and 2) poor people, who tend to drive old inefficient cars, live in old drafty houses, and sometimes have to drive crazy distances to work.

    However, what keeps the CLEAR Act from being regressive is that rebate.  It is estimated that 80 to 90% of people, including the poor living in drafty houses, would earn back more than they pay out through this carbon tax.  Everybody, rich and poor, would come out winners if they used their rebate to insulate their houses, install solar hot water heaters, etc.  And that is before the 25% spent on building the community infrastructure needed to break our fossil fuel addiction.

  • Bruce Kittilson says:

    January 18, 2011 at 12:24 pm

    Only income should be taxed—if one has the income, one can afford to pay.  There could be some “use” or consumption fees, but certainly no sin taxes.  There should be no distinction between earned and unearned income.  Income tax should be moderately progressive—which assumes that those who benefit most from society should pay something additional.

    The tax structure should be extremely simple and have no exemptions.  The principal debate should focus on the definition of income.

    Because of our ultra-complex tax system I refuse to spend a penny hiring experts to determine my taxes.  I calculate my own, in pencil, and mail each return early in the season.  The IRS has always corrected my errors to allow reductions, or has informed me of additional amounts due, in time to make amendments before April 15.  I have found the IRS always to be accurate and fair.

  • Bill Nelson says:

    January 18, 2011 at 1:31 pm

    I believe everyone should pay the same percentage of tax based on their income.  Has there been any talk of allowing the tax payers to choose exactly where their tax money goes?  For example, I could choose 50% to public education and 50% to public transportation.  Some people balk at paying taxes because they do not like how and where their money is spent.  Many people feel that their elected representatives don’t represent the tax payers’ economic interests when tax payer money is allocated for state projects.

  • Dan C says:

    January 18, 2011 at 1:31 pm

    Josh, I read your comment, but I think you are forgeting an important fact.  Businesses do not pay income taxes on GROSS RECEIPTS/SALES.  Instead, the pay taxes on NET EARNINGS.  In other words, all company expenses are deducted before the trax is calculated.  In this way, there is a big difference between workers, who are taxed on gross income and businesses, who are taxed on net income.

  • Dan C says:

    January 18, 2011 at 1:40 pm

    I believe that not only is a flat tax regressive, it is generally unworkable for the low income earners.  Those making poverty wages will be taxed out of life.  They will not even be able to subsist after the taxes are taken out. 

    The flat tax does not put us all in it together.  If our economy has enormously and disproportionatley benefited someone, then that someone should be prepared to pay disproportionate taxes.  That tax philosophy has existed since the founding of our country and the father of economics, Adam Smith.  He held that a progressive income tax was really the only fair tax.  I agree.  Even with high taxes the rich will hae plenty of money left over.

    In fact, there is an evil leaving too much money for the rich.  They use the excess earning to corrupt our Congress, provide access to key legislators, and influence the decision made about taxes.  The poor don’t have that luxury.

  • Dan C says:

    January 18, 2011 at 1:47 pm

    I believe the consumption tax is probalby the most regressive tax of all.  It most adversely impacts the poor.  The poor basically spend all their income on consumption.  Many times, that consumption is in areas that would be the heavist taxed.  For example, the poor drive mostly old heavily carbon consuming cars because they can not afford to buy the new technologically efficient ones that lower the tax burden.  They are trapped because they use all their money to consume and they generally have to buy the most heavily taxed items.  I believe this is but aother reverse Robin Hood trick of the rich.  The rich just have to pay more tax and stop trying to foist that responsibility on others who can’t afford it.

  • Dan C says:

    January 18, 2011 at 1:49 pm

    I agree with Bruce and I do as he does.

  • Dan C says:

    January 18, 2011 at 2:02 pm

    I don’t think this is a practical way of financing the Federal Government.  For exampl;e, many people don’t like the IRS and would choose not to finance it.  However, with the tax code Congress has given them, they are a critical necessity for Government.  It’s like paying association dues.  The dues go toward that entire association.  People can’t determine if they want to fund law3n mowing, but no shoveling.  First, it would be a nightmare to track nd control.  If you think the buraeucracy of the IRS is bad, it will be nothing compared to the bureaucract needed to control ad track wish list expenitures.

  • W. D. (Bill) Hamm says:

    January 18, 2011 at 2:17 pm

    Joe Sheeran, how about taking this up one notch on the honesty scale and sepperate you and your middle class friends from those of us in th 62%, (not rich or middle class) and see who is really on the bottom of that scale.

  • Rachel says:

    January 18, 2011 at 2:37 pm

    Bill, today’s report has tax rates for more specific income groups. Check out the graphs on pages 14 and 20.  http://bit.ly/ibeBkH

  • W. D. (Bill) Hamm says:

    January 18, 2011 at 2:58 pm

    Thanks Rachel.

  • S. Nelson says:

    January 18, 2011 at 3:41 pm

    Statistics can be misleading when thrown around like this.  Your paragraph made it sound as if the rich were paying less than the middle class because they pay a lower percentage.  If I am wrong, please correct me, but I believe the rich few still shoulder a much larger percentage of the tax burden than the middle and lower class.

    I believe a fair way to do taxes is what has been proposed as the “FAIR TAX”.  It is based on spending not income, would all but eliminate the IRS and income tax.

    More and more senators are getting on board.  Are we ready for such a change in this nation?  I’m not sure, but I like the idea of challenging the current system.

    Read about it here
    http://www.fairtax.org/site/PageServer

  • Ginny says:

    January 18, 2011 at 6:39 pm

    I think a consumption tax would be the fairest and it would make our country greener. It would also penalize somewhat people who spend a lot of money.

  • Marie Alena Castle says:

    January 18, 2011 at 6:45 pm

    Balance the Budget by Taxing the Tax-Exempt

    Minneapolis and St. Paul alone are estimated to have about a fourth of their real estate tax exempt. This consists primarily of religious and secular non-profit land and facilities. Extrapolated statewide, this has to amount to a huge source of potential revenue even if only a fee for public services is levied. So why not tax all property?

    Given the dire financial straits we are in, it seems reasonable to ask that those who pay nothing begin to pay something to help lift us out of this mess. There may even be enough potential revenue from these tax-exempt properties to eliminate any need for other tax increases and service cutbacks.  A general reduction of all property taxes may even be possible. These organizations are also exempt from state sales taxes, so eliminating that would generate still more revenue.

    Would these organizations be substantially harmed by removing their tax exemptions? Probably not. Many smaller non-profits lease or rent their facilities, so they already pay taxes through their lease/rent arrangements. Those that depend on donations would surely see enough increases there to cover their tax costs, assuming their services are valued enough to generate donations at all. It would help enormously if the potential revenue available were published so citizens could evaluate the worth of this proposal.

  • Ginny says:

    January 18, 2011 at 6:47 pm

    I didn’t mean penalize people who spend a lot of money; I really meant penalize the expenditures of people who spend a lot which would undoubtedly mean the rich—unless someone can show me some poor people who spend a lot. Much fairer.

  • John Crampton says:

    January 18, 2011 at 7:18 pm

    Taxing religious institutions and real estate is an excellent idea.  If the Catholic Archdiocese of Minneapolis-St. Paul has enough money to produce and mail 600,000 DVDs telling people how to vote, maybe they should get some “real skin” in the game by paying property taxes.

    Another good source of money would be to eliminate the tax deductibility of mortgages on second properties——then people could invest in things that have some productive value rather than overpriced starter castles that are ruining the lakeshores and lakes of our state.

  • Mike Downing says:

    January 18, 2011 at 7:51 pm

    Yes Ginny, let’s penalize the consumers that buy the products that companies need to produce that hire people to work that pay the taxes to support….....

  • Ginny says:

    January 18, 2011 at 9:04 pm

    Good ideas, both, on second-home deductions and on religious institutions that engage in overt political activity: denying the sacraments to those who vote for (invariably Democrats) who support abortion, but in Minnesota, some fundamentalists who are out and out defying IRS rules and daring the government to come after them for endorsing candidates. So why don’t they go after them?

  • W. D. (Bill) Hamm says:

    January 19, 2011 at 8:04 am

    And the religious purges continue as always led by the feminazis of the teacheers Union. At a time when you should be working to repair the damage of his kind of DFL ant-religious bigotry, here you are with more of your overbearing elitism. Right back to the choice/life battle. Divide us further ladies, you gain nothing and take us all down with you.

  • Dan C says:

    January 19, 2011 at 9:45 am

    I agree.  Churches have been pushing the line for too long.  They are getting more and more actively involved in politics while skipping out on paying taxes for that privelege.  Churches involved in politics in the pulpit or on the streets need to be warned once.  Then, if they persist, remove their tax exempt status.  There just isn’t a free lunch there. 

    To tell you the truth, I would have thought the church had its hands full just trying to save parishioners’ souls.  Now, they are mixing in politics?  There are ample signs churches are falling far short of their primary goal.  I suggest they better endeavor to become more Christian before they worry about politics.

    Also, while sactimonious self-righteous far might males get further radicalized by woman exercising their human rights, I suggest they better work to reduce abortions in their own families and congregations.  There is a whole hip-boot depth of hypocrisy in their self-righteousness.  More of that Palin abstinence lecture for us, while raising a pregnant out-of-wedlock teen.  In other words, walk-the-talk.  Certainly, I sicken of the talk-the-talk.

  • Ginny says:

    January 19, 2011 at 10:49 am

    I think there are good reasons churches are losing members. Most, in my opinion, offer little or nothing to most of us (I do have a church that I love and I think is in sharp contrast to most others I know about). Too many do not offer the guidance needed to live honestly and ethically in this world, and do not offer sustenance to our own inner souls, to help us survive our difficult outer worlds.
    My own church, by the way, is growing.

  • W. D. (Bill) Hamm says:

    January 19, 2011 at 11:43 am

    Its called “Challenging Fixed Belief” and your right 40 years of it have had a negative affect on religion. The only question is did the athiests in the system have the right to do it. Just what effect might it be having on the seeming increase in mass killing. A crazy athiest is better than a crazy christian right? That’s why I’, agnostic, athiest are at least as self richious and pias the people of religion.

  • Doris says:

    January 19, 2011 at 12:52 pm

    People avoid paying income tax by living
    for 6 months out of state.  They should
    pay income taxes for the 6 months that they reside in Minnesota.

    It’s mostly the wealthier that can afford
    to live out of state for an extended vacation.  Some of these people are on
    pensions paid for by the State.

    Can this be changed?

  • Mike Downing says:

    January 19, 2011 at 1:36 pm

    Yes, let’s change our constitution based on your definition of fairness!

    Myself, I would learn the best practices of states which are growing in population and in jobs. Most are in the South and most have low or no state income tax.

    Increasing the tax burden on citizens does not make a state more competitive.

  • Bernie Bauhof says:

    January 19, 2011 at 2:24 pm

    Tax fairness. I see we are trying out a kinder and gentler synonym for income redistribution.  There is nothing fair about legislating that an individual must pay more for the same product or service simply because the individual earned the resources to do so. This tax the rich mantra reminds me of a quote from Karl Marx. “From each according to his abilities, to each according to his needs”. Most of us are familiar with his ideology and how well that worked out.

  • Dan C says:

    January 19, 2011 at 3:45 pm

    Bernie, I’m surprised it has taken you this long to recognize our system over the centuries it has operated.  Adam Smith, the founder of economics, recognized the importance of a progressive income tax in the late 1700’s.  When the US enacted income tax in the US, the need for a progressive income tax was first recognized as an essential part of it.  A great REPUBLICAN President, Theodore Roosevelt, stressed the need for progressiveity in the income tax.

    I’m afraid you are very tardy recognizing our current income tax.  However, probably the single biggest element of our income tax system that has stymied growth and held our economy back is the fact that it is NOT progressive enough. 

    Wealth has become even more concentrated among a few in our nation, to the detriment of most everyone else.  Much of our country’s earliers years progressivity needs to be reinstated.

    It is not compatible with our founding fathers and the purpose of our nation that such as excessive amount of wealth be so concentrated among so few.  After all this is a nation of, by, and for the people, not just a few.

  • Dan C says:

    January 19, 2011 at 3:58 pm

    Mike, I don’t know what statistical reports you look at, but it is generally the Northern tier states that have the highest standard of living.  In addition, these same Northern tier states have the highest average education levels.  These are precisely because these states have recognized the need to invest in people. 

    Before Governor Tim Pawlenty, Minnesota was a perennial leader among statess in both education and standard of living.  Since Tim Pawlenty, the quality of education in Minnesota has markedly declined., which undoubtely will point to a deterioration of our standard of living. 

    People didn’t live in Minnesota for the nice weather and winter beaches.  They lived here because of the hard working progressive people who valued education, innovation and creativity.  Minnesota thrived being a higher taxeds stated despite having a minimal taxing state to our west (South Dakota).  However, Minnesota continued to grow far faster than Souht Dakota.  That was because of our great standard of living.  Theree is a price exacted from us all of rbeing ignorant.

    If Minnesota is ever to again grow into supremacy among the states, it must increase taxes and the progressity of them.  After all, our government exists for the people, not money.  The fairest tax is one where the wealthiest among us do everything in theit power to see that their blessings and opportunities are offered to everyone. Selfishness is not such a value.

  • W. D. (Bill) Hamm says:

    January 19, 2011 at 4:05 pm

    Doris, most of those folks are middle class and above. Being a 62%er I’ll support that proposal 100%.

  • W. D. (Bill) Hamm says:

    January 19, 2011 at 4:21 pm

    I am less inclined knowing now that we have been argueing over you beloved reggresive tax system for well over 200 years. When are you going to get the bugs out of it. Since most us find the existing tax system over complicated and riddled with political loopholes, what is wrong with fairness as a starting point. Must it be politically postured to your goals for negotiating stance even here. A simple flat tax, low end cut off with child credits,upper end local job creation credit, fair deduction for charitable giving, end of loopholes. If it needs adjustment it would be incramentally lkie the sales tax for everyone. Right now with a progressive tax system in place there are so many loopholes added by politicians of both parties that the rich pay almost no taxes. You never close the loopholes when you raise taxes so it comes right back to us.

  • Dan C says:

    January 19, 2011 at 4:52 pm

    Bill, I can’t remember hearing you argue for over 200 years.  I have no problem with eliminating any or all incme tax deductions.  However, I feel progressive income taxes are necessary.  The flat tax is unfair.  I suggest you google Adam Smith and Theodore Roosevelt and find out what they said about the need for progressive income taxes and why they are needed.  Go ahead eliminate deductions, but the make the tax progressive as income rises.  After you have read about what the father of economics and a great American President said about income tax, then tell me why you don’t agree.

  • Mike Downing says:

    January 19, 2011 at 5:50 pm

    Look at the 2010 Census and the resulting change in the House of Representatives.

    It only takes an IQ of 80-100 to see the high taxed states losing population and the low taxed states gaining population.

    Your social experiment with high state taxes is indeed resulting in a sane reaction from a free market, i.e. the flow of jobs and people away from high taxed states.

  • W. D. (Bill) Hamm says:

    January 19, 2011 at 7:12 pm

    Bernie, thank you for that Karl Marxs statement. It points clearly to what is wrong with the progresive tax system. Dan I’m not sure if Teddy also supported eugenics or not, as many progresives of the day did. Never in my life Dan have I ever heard anyone but a politician tell me about how great our State or Federal tax system is. Having knocked on a few thousand doors, I can say clearly that negative comments are dominant. Why do you insist on sticking with what has never been liked. You haven’t addressed the inability to close loopholes, supporting such closure without a plan is just anouther lie. History has clearly shown failure after failure with these socialist structures. Tweeking doesn’t work because they are fundamentally unsound.

  • Marie Alena Castle says:

    January 19, 2011 at 7:17 pm

    In the 1970s the citizens of Minnesota passed an amendment to Article X of the state Constitution to allow taxing the business operations of churches. This amendment passed by over 70%. It was supported by a coalition of business associations and labor unions (led by Wheelock Whitney and David Roe, respectively). Despite the overwhelming popularity of this amendment, it has never been implemented. An attempt was made in about 1989 to add implementation language to the tax bill but was pulled at the last minute due to political pressure by religious institutions. I was there, involved in getting the implementation included, so I know.

  • Joan C says:

    January 19, 2011 at 9:28 pm

    To begin, lets tax income with a graduated scale that taxes higher earners at a higher percentage. Paying according to what “you receive” is fair to all. Let’s NOT increase property taxes to penalize/discourage home ownership financed with money already taxed as income.

  • Dan C says:

    January 19, 2011 at 10:41 pm

    Using population gains and losses by the Census and attributing that to state taxes is poor analysis.  There are many reasons.  First, it is the elderly population relocating to the south, mainly for warmer weather.  I think there has to be better research and analysis of the facts before one can attribute it to taxes.  I think it is more wishful thinking on your part.

  • Dan C says:

    January 20, 2011 at 9:52 am

    Bill, you’re illustrating your limited knowledge of history again.  However, you sure like to drop name-calling bombs.  Marxist?  Come on.  Does that mean you are Fascist?  Teddy Roosevelt was a progressive and he was OF YOUR PARTY - REPUBLICAN.  However, progressive had a different meaning back then.  Generally, it was associated with a movement to rid government of corporate and organized crime corruption.  Second, the IRS, and the tax system in general, are complicated because NO ONE likes paying taxes.  The continuing jockeying of monied interests to lobby for special advantage in the system is a continually corrupting influence.  However, most responsible citizens realize it is a necessity for a society and our country to function.  A progresive income tax is needed, not a flat tax.  A flat tax is unfair to the poor and selfishly enlarges the fortunes of people who already have too large a piece of the economic pie.  The income tax was founded on that principle, the father of economics felt that a progressive tax as necessary, and our country has operated very well for about 100 years using that principle.  I think it is important to remember that sefishness is not patriotism.

  • W. D. (Bill) Hamm says:

    January 20, 2011 at 10:40 am

    Sorry Dan, I have never been a member of the GOP. I did desert the DFL for three years to try to help make something of the IP but have now returned to fight socialists who fight back.You still haven’t made your case that a complex proggresive tax with politically favoritism is better than a simple flat tax with limited opportunity for political manipulation. Your argument seems to be “Let’s stay with the politically inefficient Proggesive tax”, so I can help all my rich friends get favorable deductions for a fair lobbying fee.

  • Dan C says:

    January 20, 2011 at 2:24 pm

    Bill, you make the naive assumption the flat taxis not subject to corruption/manipulation?  That’s prety foolish.  The progressive tax is every bit as efficient and certainly a lot fairer.  You know a plain progressive tax and a flat tax are the same, except one is progressive.  It’s no problem.

  • Mike Downing says:

    January 20, 2011 at 5:04 pm

    Dan,

    You obviously do not know the “Fair Tax” based on your objections to it & your comments on this forum. Please read about it BEFORE you comment on it.

    BTW, how well does the current tax system handle tips, gratuities, barter, the cash underground economy, etc.?

    The “Fair Tax” eliminates the need for most workers to file with the IRS. Look at the inefficiency of tax preparation, tax lawyers, tax accountants. All of which is needed with the current inefficient system.

    Only lawyers, accountants and politicians favor the current system. Which group do you belong to?

  • Bernice Vetsch says:

    January 21, 2011 at 10:23 am

    Mike D—the so-called “Fair” tax would, even more than the present system, transfer the burden of paying for government to the poor and middle classes.

    I HAVE read about it.  It would tax consumption rather than income, so its most unfair feature is that lower income folks who spend most or all of their incomes on the basics (food, clothing and shelter) would pay the tax on all or most of their incomes.

    Wealthy folks, however, who spend a fraction of their incomes on those necessities, would find every penny they save or invest free of any taxation.

    Since only new items are taxed, a rich person might buy a “used” home (perhaps Bill Gates’s mansion, which cost $15,000,000 to build) for $25,000,000 and be charged no tax.  A person at the other end of the home-buying action, however, would have to pay the tax on the entire price of a mobile home or elderly bungalow. 

    The tax is called 23%, but apparently the amount of that tax is to be added to your purchase (so a $1.00 loaf of bread would cost $1.23) before adding it to the new total.  Could cost quite a bit if you’re buying a car or a house, couldn’t it.

    The “Fair” tax is a ruinous and Unfair idea.

  • Mike Downing says:

    January 21, 2011 at 11:17 am

    Bernice,

    You reply clearly shows that you have NOT read the “Fair Tax” (The FairTax Book by Neil Boortz and Rep. John Linder). The Fair Tax provides credits for the poor & middle class which refutes your ideologically based comments.

    Learn the facts. Facts will set you free from your ideological blinders.

  • Ginny says:

    January 21, 2011 at 11:23 am

    Bernice
    Thank you for the facts and a rational voice in this discussion. I didn’t know much about it before, but now I do.

  • Bernice Vetsch says:

    January 21, 2011 at 11:31 am

    No, Mike, I haven’t read their book and don’t plan to.

    But I did read the legislation when it was proposed in Congress several years ago.

  • Dan C says:

    January 21, 2011 at 12:06 pm

    Oh, so “Fair Tax” connotes a consumption tax written about in a book?  Frankly, I don’t choose to read the book.  I know enough about consumption taxes to know they are NOT fair.  Then, you talked about tax breaks given to the poor?  I thought you wanted to eliminate the bureaucracy?  Adding any exception to the consumption tax will only add a bureaucratic element, defeating one of your alleged advantages of the consumption tax.  It is income that needs to be taxed, not the spending of income.  Just like it is the interest earned on savings that is taxable, not what they bu with the interest.

  • Mike Downing says:

    January 21, 2011 at 12:28 pm

    Yes Dan, reading and understanding the facts is such a burden to place on one before one offers an opinion.

    One needs not file anything if one has values & principles and does not want a handout from those that paid more.

    BTW, did you see that another 21,000 jobs were lost in MN in December? Compare that to the job growth in Texas…..... Texas will have 4 more Representatives due to the 2010 Census. MN will lose one or two in the 2020 Census if Gov Dayton increases taxes further.

  • Dan C says:

    January 21, 2011 at 1:25 pm

    Well, I see that you truly idolize Texas.  Maybe relocating there would be good for you and for everyone else.  As far as growth in Texas is concerned, any degree of research will find more than your pre-drawn conclusion.  In 2005, Texas ranked 35th in the country among states paying in vs what they got back from the Federal Government.  Minnesota ranked 2nd.  That means that Texas got far more money back from the Feds, in comparison to what they paid in, than Minnesota. So, this little State of Minnesota has been paying welfare to Texas.  However, I never knew you were such a proponent about the positive affects of welfare.  Texas would be a dust spot in the country without the massive military spending consumed in the state.  Texas is awash in military bases, and accommpanying US military workers.

    I am glad that you are such a strong supporter of welfare.  Heaven knows, Texas gets plenty of it.  So, it must be that Texas owes considerable thanks to Minnesota for supporting it in people and money.

    Meanwhile, go Dayton go.  Minnesota did well in the 2010 Census campared to many of the strongest Midwest neighbors who haven’t had major oil field finds.  Minnesota’s kept its representatives.  However, there’s nice ocean front property for you down there in Beaumont.

  • Mike Downing says:

    January 21, 2011 at 2:17 pm

    Dan,

    It’s not an Ocean; it’s the Gulf of Mexico. My waterfront property is in SW FL and here in MN.

    Yes, I must believe in welfare since I have lived in MN since 1971 and have given far more of my hard earned wealth to welfare than you could ever imagine.

    How did the “tax the rich” programs work in Maryland, NJ & NY Dan? Why would anyone support & follow such a failed policy? The rats & the Pied Piper comes to mind.

  • Dan C says:

    January 21, 2011 at 3:52 pm

    Mike, I could not imagine you giving enough.  You and your sensationalist metaphors…pied piper…  BW Bush gave the largest tax cut in history in 2001 and look how well that worked.  The millions of jobs he created.  He had a net loss in jobs during his admnistration.  THe first time in a long time.  Obama has already created more jobs in his 2 years than GW Bush created in 8 year.  Minnesota prospered far mor in the past, when it had higher taxes, than the do now.

    Anyway, I’m glad you been taxed plenty.  If you make over $500,000/year, I think you should be prepared to pay more.  Alo more.  Console yourself by calling it patriotism.  The worthless President GW Bush taught us what selfisness is like by lying to start wars he didn’t fund.  Now it’s time to pay.  Since the children of the rich share so little in the deadly burden of war, they might as well pay for it and all the services the veterans need.  Besides, you probably live more than 6 months in FL to avoid Minnesota tax anyway.  If so, you have no say.

    You know, patriotism doesn’t stop at your wallet.  The rich got us in this mess, now theyca get us out.

  • Bill N. says:

    January 21, 2011 at 3:55 pm

    Mike -
    Are you against paying taxes or against paying taxes that provide welfare benefits?  If you could choose to designate where your “hard earned” tax money goes (i.e.: public education, public transportation, etc.), would you be less likely to be against the concept of taxing citizens.

  • Mike Downing says:

    January 21, 2011 at 4:09 pm

    Dan,

    Why don’t you answer the question of “How did taxing the rich work for Maryland, NJ & NY?”? What impact will Gov Dayton’s “tax the rich” plan have on job growth, competitive position of MN and population growth?

    PS I pay MN taxes just to have the opportunity to challenge the failed policies of liberal progressive lefties like you. Fortunately, our arguement is fact based & data based and is therefore winning the arguement of anyone who is interested in providing a sustainable path for our grandchildren in this global economy.

  • Dan C says:

    January 21, 2011 at 6:09 pm

    Frankly, I could care less about MD, NJ, NY, or FL.  In case you forget, this is Minnesota.  Wer dn’t follow the trend, we set it.  The day has to end in your silly quest for the bottom.  Minnesota has had a long reputation of leading in education, standard of living, quality of life, and progressive taxes.  Apparently, you like FL, where votes can’t be honestly counted.  I like Minnesota where people care and selfishness does not rule the day.

    You can bring up whatever anecdotal examples you want.  They have no relevance in Minnesota.  I have examples about how Pawlenty has ruined the State and put us in competition with the bottom dwellers.  I think Minnesota is far better than that.  You know, I just listened to a great American President yesterday in one of his greatest speeches when he sad, “Ask not what your country can do for you.  Ask what you can do for your country.”  A great quote for you to ponder.

    Our country has excelled working together and helping each other.  We put a man on the moon in 1969, and we are unable to do that now.  There are jus too many people asking about what can be done for them or why do they have to contribute to this society.  I think it’s about time people act more like a team, instead of selfish spoiled rich boys.

  • Mike Downing says:

    January 21, 2011 at 8:13 pm

    It is obvious that have no response about Maryland, NJ or NY since these case studies do not fit your warped paradigm.

    History repeats itself unless one learns from history.

  • Dan C says:

    February 3, 2011 at 4:24 pm

    In case you forget Mike, Mark’s proposed tax increases for the rich haven’t happened yet.  Are you foolish enough to believe they have?  However, I sure hope they get enacted.  There are too many self-proclaimed 3m super-achievers needing a tax increase.  Too many spoiled people, sacrificing too little in an effort to hoard as much for themselves no matter how many it hurts.  That’s what they cal patriotism.  The patriotism of screw you, I’ve got mine mentality.

    Minnesota needs a strong progressive tax system.  Much more progressive than we now have.  Current statistical analysis shows the wealthiest in Minnesota paying a smaller percentage of income in taxes that the poorest in the state.  Basically we have a reverse Robin Hood tax system.  The newest data show the poor actuallyt pays the highest tax rates, folowed by the MIddle-class, and LASTLY the rich.  Taxation precipitously drops offfor th rich.

    The rich not only need to have their taxes increased for equity reasons, they need to have them increased even more to make up for the years on a free ride.  Mike can keep peddling his irrelevant state comparisons to the cows come home, but it doesn’t change Minnesota’s unfair tax situation.  Enough of the regal perks for the rich.  They need to earn what they have.

  • Mike Downing says:

    February 3, 2011 at 5:22 pm

    Dan,

    Why are you jealous of successful people? I was born, raised and educated in other states and am a self-made man. Frankly, I don’t owe you a dime.

    You and your ilk believe your unproductive failures should be rewarded by stealing from the productive and successful.

    My parents taught me the Ten Commandments. “You shall not steal” is the 7th Commandment (8th in the Jewish faith). You are arguing that stealing more & more from the successful is good and righteous. My God tells me otherwise.

  • Ginny says:

    February 3, 2011 at 6:21 pm

    How did you get from being a “self-made man” to invoking G-d to back you up as someone who didn’t steal to get where he is (wherever that is).

    Your own Bible disagrees with you:
    Here is Moses, warning the Children of Israel nearly 3,300 years ago: “Beware… lest you eat and be sated, and build good houses and dwell therein, and your herds and your flocks multiply, and your silver and gold increase, and all that you have increases, and your heart grows haughty… and you will say to yourself: ‘It is my own power and the might of my hand that has accumulated this wealth for me’” (Deuteronomy 8:11-17).

    If your Torah can’t convince you, here are some people, more successful than you, I’m sure, who might do so.

    Another bit of poetry:
    “Tell me the place you were born
    The lives that your ancestors led
    The ground that surrounded the people.”
    From a report on the myth:
    “Pro-business economic policies and tax policies are often centered on the myth of the self-made man,” the report says. But the myth of “self-made” wealth “is potentially destructive to the very infrastructure that enables wealth creation.”

    The report profiles a number of successful individuals who all believe that that they prospered in large part thanks to things beyond their individual control, such as social investments in education, research, technology and infrastructure, the report says. Or as one CEO says, “We are all standing on the shoulders of those who came before us.”

    He and others profiled believe it’s vital to give back to society so that others in the next generation can have the same opportunities they had.
    “This is not so much a call for increased taxes as it is a highlight of society’s role and claim upon us as individuals. We each have a responsibility to the common wealth upon which individual wealth is possible,” says Chuck Collins, the report’s co-author.
    “How we think about wealth creation is important since policies such as large tax cuts for the wealthy often draw on the myth of the self-made man… Taxes are portrayed as onerous, unfair redistribution of privately created wealth—not as reinvestment or giving back to society. Yet, where would many wealthy entrepreneurs be today without taxpayer investment in the Internet, transportation, public education, legal system, the human genome and so on?” The myth of the self-made man is that he has “made it” alone.

    Warren Buffett, founder of Berkshire Hathaway and the second-richest man in the world, says: “I personally think that society is responsible for a very significant percentage of what I’ve earned.”

    Eric Schmidt, CEO of Google, says, “Lots of people who are smart and work hard and play by the rules don’t have a fraction of what I have. I realize I don’t have my wealth because I’m so brilliant.”

    Those profiled and interviewed are awarene of what made them successful, and they want to pass that along to future generations in the form of public support. Some of us call that government. Gladwell sets his sights on the self-made man - and claims he does not exist,

    “People who were very successful, the big CEOs who were making their $100 million paychecks, were patting themselves on the back very firmly and saying ‘I deserve it.’ And I wanted to ask the question, ‘do they deserve it?’” Gladwell said.

    “And what I discovered is that’s not true. And success is a product of culture of background and what your parents and great-grandparents and great great grandparents did for a living.”

    You need to get out more—look at the stars and admire G-d’s handiwork.

  • Bernice Vetsch says:

    February 3, 2011 at 6:59 pm

    Mike - So you’re a “self-made man.”

    Does that mean your parents home schooled you rather than “take” anything from the government that created public schools?

    Does it mean that they, and you, built roads, highways, sewer system, airports and depots and a private electrical grid rather than accept anything from the government that accepts its responsibility to create and maintain the infrastructure that allows us all to live?

    Do you, by chance, read and believe Tim Pawlenty’s favorite guru Grover Norquist—creator of the anti-tax philosophy and of the Leave Us Alone Coalition you seem to be a member of?

  • Mike Downing says:

    February 3, 2011 at 7:53 pm

    Ginny,

    God knows that I freely to a variety of charitable organizations. I am also highly confident that my charitable giving is significantly more than your and Dan’s charitable giving combined.

    Your lecturing others on charitable giving should be directed to your liberal progressive friends who, on average, give much less than conservatives.

  • Ginny says:

    February 3, 2011 at 9:20 pm

    Another message that went over your head.

  • Dan C says:

    February 3, 2011 at 10:36 pm

    Mike - me and my ilk cheerfully pay taxes as our responsibility to everyone else.  It’s our repayment of a debt owed for good fortune.

    You know, I know of NO country on the face of the earth that has survived, let alone flourished, where citizens sillily hoard their wealth, by claiming it can’t stolen from them.  You have made what you made your money because of others. A company which chose to employ you for the time they did, for professors you taught you what yu know, and consumers who chose to buy your company’s products.  That is a blessing.  Your company pays taxes, which it should.  Society allows it to flourish.  If you don’t think so, then move to your island or mountain top and keep everything you have.  No one will bother you there.  You can be as selfish and greedy as you want.  However, I think you’ll discover you won’t flourish there.  Who will make your vehicles, let alone the roads to drive them on?  Who will furnish you your fresh water?  Who will send their children to godforsaken lands to die for your freedoms?  Have you served?  Probably not.  You know there is a spirit of shared sacrifice that is gone in our country.  You probably want tax cuts while you support two wars in foreign lands.  Pretty damn selfish, if you ask me.

  • Mike Downing says:

    February 4, 2011 at 11:40 am

    Dan,

    We are in this financial mess in DC & St Paul simply because liberal progressives have promised too much and spend too much.

    Our federal budget will not even balance if the federal government confiscates (steals) 100% of our income.

    Liberal progressives have dug a hole and want to dig the hole deeper. The majority of Americans simply want the federal government to stop digging any further.

    A Jan. 12th CBS News said “Americans strongly prefer cutting spending to raising taxes to reduce the federal deficit. While 77% prefer to cut spending, just 9% call for raising taxes.”

    Fortunately, you, Ginny and others on this site are part of a very small minority.

  • Dan C says:

    February 4, 2011 at 1:33 pm

    Mike—You might have worked for 3M as a chemical engineer, but I think you must have drank too much of your product.  I can tell you get your news from Glenn Beck and Michelle Bachmann. 

    First, it wasn’t the “liberals” you love to refer to, that collapsed the economy.  It was the speculative Wall Street investors and AIG.  Who largely support the GOP.  These Wall Street robber barons literally ruined the market with CSD’s.  They traded real estate securities like mad, with a Las Vegas gambling mentality.  On top of that, they knew these CSD’s were garbage, so they thought they could get around that by not telling others and getting them insured, mostly with AIG.  Well, when almost all equity was mortgaged (loaned out) and no more could be loaned, the economy slowed because purchasing slowed, and this was because people could no longer buy using equity.  Consumption consequently dropped, business slowed, and people got laid off.  Ths led to home foreclosures and there we went.

    The problem was that banks were allowed to merge with investment houses, pushed by Phil Grahams (TX Republican Senator) in 1999.  He convinced a majority in Congress that merging the two and repealing Glass-Steagal were a good idea for he country.  There were several Democratic Senators that predicted the very collapse we experienced in 2008.  Glass-Steagal was enacted after the 1929 stock market collapse to prevent the very thing from happening that did.  Republicans still block regulating Wall Street banks and investment houses, even though these large banks and investment house did the trememdous damage to our economy that they did.  You see, rich Wall Street investment houses, banks, and the super-rich executives that run them, have bought the Republican party.  Republicans are in their back pockets.

    Liberals never caused the Great Recession, they were victims of it.  It was the greedy and selfish bankers and Republican party infatuation with a laissez-faire philosophy that caused the collapse.  There still have not been meaningful regulation of this dangerous and disastrous speculative trading.  Meanwhile, average taxpayers paid for the bail outs and low interest loans to banks, investment houses and AIG.  AIG still has not repaid a large chunk of their $185 billion loan to the Treasury.

    As far as your bogus poll is concerned, it is heavily skewed and biased.  The questions were asked out of context.  Over 80% of the American public don’t want any reduction in Social Security benefits.  In fact, respondent said they perferred increases in taxes over reduction in benefits more than 2 to 1.  Over 70% feel the same about Medicare. And the only way the budget could be balanced by cuts alone, would be by the decimation Social Security and Medicare.  So, I hate to tell you, but your study is biased, inaccurate, and most of all totally unrealistic.  Totally balancing Government budgets, without tax increases will virtually bankrupt the Government.  There won’t even by money to repay the debt.  You plan is silly and not close to workable.

    In addition to your slefish and greedy pitch to eliminate spending, current taxes in the US are the lowest they have been in 55 years.  I see little economic sense or even accuracy in your diagnosis or remedy for our county’s problems.  Maybe you are a good chemical engineer.  I don’t have information to judge that, but I can see you know little of economics or common fiscal sense.  Now, maybe yo andSarah can sit on yur front porches and see Russia, but I suggest you are seeing a mirage made in your mind, much like your economic machinations.  I would guess that paying increases in taxes will be the first time you have ever made any shared sacrifice for your country.  Try being a patriot, it might be good for you.

  • W. D. (Bill) Hamm says:

    February 4, 2011 at 1:42 pm

    Mike, your problem is you haven’t learnt that fuzzy math yet. As for the “Progressive” thing, I have a standing challenge to all progressives, go to this site; www.dsausa.org, if you can find any differance in thier meaning of the word and yours let me know. This is kind of a “Progressive” discovery effort.

  • Mike Downing says:

    February 4, 2011 at 3:44 pm

    Bill,

    Thanks for the URL. I skimmed over the site. Yes, “progressives” and “socialists” appear to be one in the same in that they are destroying the very fabric that knit this great country together.

    Dan & Ginny are unable to see themselves as part of a destructive force which is creating this political and geographic divide.

  • Mike Downing says:

    February 4, 2011 at 4:10 pm

    Dan,

    I just checked my transcripts to confirm my “A"s in Micro-economics, Macro-economics, Accounting and Finance. I also just checked my ETRADE & Fidelity accounts, which are up >25% over their 2007 highs. I also just reflected on the new products and businesses I created at 3M. These are all much better measures of practical business finance and economics knowledge than any simple comment by you.

    BTW, it sure is a great feeling to be debt free rather than in debt requiring others to bail you out. It’s called personal responsibility. You, our state gov’t and federal gov’t can implement a debt free plan if you/they make the simple choice to do so. I can tell you I will root you on and certainly not be jealous of your financial success.

  • Mike Downing says:

    February 4, 2011 at 4:29 pm

    46 states face huge budget deficits for 2011, around $100 Billion!

    CBS News: “There is a financial crisis looming involving state & local governments. The states have collectively spent nearly a half a trillion dollars more than they collected in taxes. There is also a trillion dollar hole in their pension funds.”

    This is simply a spending problem unfortunately similar to many American families. MSN Money: “43% of American families spend more than they earn in one year.”

  • W. D. (Bill) Hamm says:

    February 4, 2011 at 4:41 pm

    Socialist is such a crude and vulgar term, “Progressive has that air of importance. What really intrigues me is; are progressives to ignorant to understand, or do they think we of the 62% are too ignorant to understand? This is serious philisofical stuff here.

  • Dan C says:

    February 4, 2011 at 5:23 pm

    Mike—

    I am surprised at your ignorance.  I guess you must have had economics instructors that were Santa Clauses.  And by the way, your ignorant diatribe about liberals causing economic destruction was contradicted by your own words when you bragged about getting over a 25% return in the markets You ignorantly shot yourself in the foot.  I guess liberals weren’t so destructve then were they.  You owe Obama big time. The markets love Obama.  He actally saved us from depression, unlike your failed hero GW Bush, who only knew how to get us in trouble.  I guess he was “Mission Accommplished” in that respect.

    Mike, you must understand it was people buying the 3M products.  It’s great you did something constructive at 3M.  I assume that is expected, or you wouldn’t be around.  What you accommplished wasn’t anything great.  It was expected, or bye-bye.  So it was good to see that you at least did your job.

    Who said I was in debt?  Do you have a comprehension problem? I’m doing just fine.  Unlike you, I don’t choose to brag about myself.  I think you making yourself look foolish is funny enough. I’m having a very comfortable retirement.  You jump to far too many conclusions.  None that I have seem that are correct.  I would hope you did a better job at 3M than that or you should have been gone. 

    I laugh reading your posts bragging and puffing your chest out as some great achiever in life.  Like a kindergarten student at show-and-tell.  Since your values seem to rest upon how much you earn, I’ll tell you I have kids who out earn you.  Believe me, you are a small cog.  Maybe a legend in your own mind.  It’s just that I was taught to share and not be as selfish as you.  However, you just keep a braggin’.  I’m sure President Obama thanks you for the acknowledgement of the fine job he did for you.  Now, if only you could do something worth a darn for others.   

    “A” in economics…what a joke.  Then why don’t you know about our economic situation?  Reads like the Peter Principle to me.  Instead, you just make juvenile accusations and attacks bragging about your “great” achievements.  I don’t see anything that looks that great to me.  However, you seem to be afflicted by selfishness nd narcissism.

  • Ginny says:

    February 4, 2011 at 6:03 pm

    What does it matter what you name something if it’s the right path to follow?

  • Mike Downing says:

    February 4, 2011 at 8:08 pm

    Bill,

    I assume “progressives” do not have a mirror to view themselves and the destruction they leave behind them.

    They are far too busy pointing fingers at others to pay more so they can have more and spend more. They have built this house of cards over the last 40-70 years. It is crumbling around them so they want others to bail their ponzi schemes out.

  • Mike Downing says:

    February 4, 2011 at 8:24 pm

    Dan,

    I can & will agree with you on one and only one thing. I do need to personally thank Barack Obama for my financial investment results over the last two years.

    I saw Barack Obama as a fraud in 2008 (I’m from Illinois & understand and have seen Illinois politics up close & personal) and I therefore bet against Barack Obama helping my family or this country economically.

    I invested in silver and gold since I knew Pelosi’s, Reid’s and Obama’s stimulus would help unions, community organizers, George Soros, et al. I knew their fiscal and monetary policies would destroy the $, create inflation and eventually remove the $ as the world reserve currency.

    I certainly am not proud to say I was right in my economic forecast since we are observing the fall of America with our own eyes.

  • W. D. (Bill) Hamm says:

    February 7, 2011 at 8:57 am

    40-70 is close enough for discussion. This last 40+ yr. cycle started with the grease that passed the civil rights act in 1963-4. That grease was public employee Unioization. Our founding fathers had clearly warned strongly about allowing white collar public employees to collectively use their power against this government to their benifiet. It was the reason they had to agree to remain non political through out their service to the government. Look what they have acomplished in 47 yrs’, they own the DFL and many believe their more stealth efforts in the GOP are paying dividends as well.

  • Mike Downing says:

    February 7, 2011 at 11:15 am

    Bill,

    Please explain “their more stealth efforts in the GOP are paying dividends as
    well.”

    Are you referring to the past & present RINOs who continued the reckless spending in MN & DC?

  • Mike Downing says:

    February 7, 2011 at 11:28 am

    I had a real good laugh this morning reading a letter in the Pioneer Press which described Gov Dayton as supporting a Flat Tax in MN. The letter writer was anti-GOP and pro-DFL.

    Where has Mark Dayton ever spoke on supporting a Flat Tax? I have only heard him speak of “taxing the rich” and making our tax system more progressive. Gov Dayton will propose adding another tax rate to increase income taxes on the rich. This will fail.

    Gov Dayton must not be a reader of current state policies. Maryland tried this approach a few years ago and it failed miserably since the rich simply moved out of state. Maryland actually lost state revenue from the rich and businesses lost revenue from the rich when they moved. This will happen in MN as well.

    Gov Dayton will be offering his “Lose/Lose” tax increase on the rich within two weeks.

  • W. D. (Bill) Hamm says:

    February 7, 2011 at 11:46 am

    I am speaking of GOP progresives in general who come from the same College influences as DFL progressives. Having never been a Republican, I have no great insight into the GOP. I do know though that all white collar public are not DFL.

  • Dan C says:

    February 7, 2011 at 5:49 pm

    Obviously, as the lead-in for this site suggests, the rich have been paying a far lesser percentqage in State taxes.  They have also been paying a lesser percentage in Federal taxes. 

    The only solution in this period of deficits has to be coonsiderably raise taxes on the rich.  I realize I will pay more taxes, but that is what is necessary to sustain our State.  The heaviest consumers, poor and middle-class, need to keep their rate of taxation the same as it is now, or even reduce them, but the rich definitely need to pay a larger percetage of taxes.

    If the rich so balk at paying their fair share of taxes and threaten to leave the State, then I would say, “Don’t let the door hit you in the rear.”  Our state needs team players all willing to do their share.  If they don’t like this, they can relocate to another state tht doesn’t mind non-contributors.  Selfishness shouldn’t be a Minnesota value.

  • Dan C says:

    February 7, 2011 at 5:57 pm

    I read an interesting article in Alternet discussing the CIA World Fact Book, wich ranked the US as the 42nd most unequal country in the world, in terms on income inequality.

    The scaries thing about the rankings was that Tunisia, Yemen, and Egypt had a more equal distribution of income than the US.  This doesn’t bode well for a country that adores liberty and freedom.  Less wealthy countries with more equal distributions of money are revolting.  When will it be the US turn?

    When you add that to the reverse Robin Hood of the tax structure, it doesn’t bode well for our country.

  • Mike Downing says:

    February 7, 2011 at 6:15 pm

    If Gov Dayton supports a Flat Tax as John L Simmer writes in today’s Pioneer Press, I suggest Gov Dayton propose a Flat Tax or Fair Tax in his State of the State speech and in his budget.

    I am 100% confident it will pass both the MN House & MN Senate since it would make MN more competitive and would encourage investments and job creation in MN.

  • Dan C says:

    February 7, 2011 at 10:53 pm

    I believe a truly progressive state tax needs ot be implemented in Minesota.  For years the rich have been skating, paying less taxes than the poor or middle-class.  It’s time for them to “pony up,” make up for past inequities, and pay a higher rate from now on.  They can afford the higher tax, and they should pay it.

    If the rich refuse to pay, they can always move to SD, FL, AZ, or any other state where there is little or no tax.  However, I admire Minnesota for its formr great educational system and high quality of life.  People need to reember they get what they pay for.

    Why should MInnesota be held back by people who don’t want to pay taxes?  If they want to leave, let them.  People in Minnesota will achieve far more without them.  Generally, the lower taxing states re the poorer and non-performing states anyway.

  • Ginny says:

    February 8, 2011 at 2:12 pm

    Taxes (nationwide, I think) are at their lowest levels since 1950.
    That is NOT a positive statistic. That explains a great deal about why our country and state are sliding into bottom of the pile rankings in dozens of area: health care, infrastructure and new technologies like high speed rail, affordable education, and the like.
    I don’t understand why the rich think they should be immune to the taxes everyone else pays.

  • Mike Downing says:

    February 8, 2011 at 4:22 pm

    Ginny,

    Once again you need to learn the facts from the IRS and The National Taxpayers Union. Go to: http://www.ntu.org/tax-basics/who-pays-income-taxes.html and you will learn that the Top 1% pays 38%, the Top 5% pays 59%, the Top 10% pays 70% and the Top 25% pays 86% of all federal income taxes. Yet the bottom 50% pay only 2.7% of all federal income taxes.

    It is estimated that 45-47% of all Americans pay no federal income tax. Perhaps we need a Constitutional Amendment that you forfeit your right to vote if you do not pay federal income taxes. The liberal progressives have given 45% of America free candy or free dope in order to to buy their votes.

    Perhaps this huge disparity on who is actually paying the federal income tax bill is the reason behind the “shellacking” on 11/2/2010.

    Your words ring hallow in the face of the facts. I am reminded of candidate Obama’s comments in 2008 when I read your postings: “Words just words”.

  • Dan C says:

    February 8, 2011 at 4:31 pm

    Yes,Ginny.  I’m glad you read the same article that I did.  Income taxes are the lowest since 1950.  Yet, people selfishly argue gainst increasing them.  I hear people say increasing taxes impinges on teir freedoms, when they don’t,or don’t want to, realize that millions of people are paying a horrible price for the inequity of icome.

    Egypt is getting to be a more and more interesting story.  40% of the population lives way below the poverty line and wait in line for 4 hours for 6 loaves of bread to eat.  Yet, Hozni Mubarek has an estimated wealth of $40-$70 billion.  Yes, that’s billions of dollars.  Enough to feed everyone and help make the country prosper.

    Now, we can hear about equalizing Mubarek’s income is “stealing” from him, but who really is the thief?  I believe it was Mubarek.

    I think people who have been blessed with great riches owe it to the American people to pay back a generous portion as gratitude for the opportunity and freedom to earn that money.  It was the poor and middle-class that enabled that wealth.  I think the rich in America risk what happened in Tunisia and Egypt, happening here, if they don’t share their wealth.  It’s time to float everyone’s boat, not just a chosen few.

    Isn’t there a famous saying that goes, power corrupts and absolute power corrupts absolutely?  It’s time to rein in the corporate power that is rotting our country from within.

  • Dan C says:

    February 8, 2011 at 5:10 pm

    This is Part 1 or 3

    While I read about the rationalizations for the rich not paying any more taxes, or advocating for a flat tax so taxes for middle-class and poor can be increased while leaving the taxes for the rich untouched, I find the rationalization for justifying such telling only half-truths. 

    As of 1999, the 220 richest people in America own 80% of the planet’s wealth. (http://everything2.com/title/80%+of+the+_wealth+on+this+planet+is+in+the+hands+...).  It is not just earned income that is subject to taxes.  It is also capital gains and dividends on investments, it is rental income, and interest on savings, in addition to other income.

    I believe the day is here that America can now be legitimately considered a Plutocracy, or rule by the wealthy.  I will furnish facts and figures to substantiate that conclusion. 
    A recent Norton and Ariely, 2010 study pointed out that wealth was more concentrated than originally thought.  I have extracted and paraphrased a good portion of Wealth, Income and Power, by G. William Domhoff, September 2005 and updated December 2010, available on: sociology.ucsc.edu/who rulesamerica/power/wealth.html, in an effort to make it shorter and more understandable.
    INCOME
    The most dramatic illustration of income inequality is the change of ratio of the average CEO pay to that of the average factory worker occurring over the last 40 years.  In 1960, the ratio of CEO pay to the average factory worker was 42 to 1, and in 2000 it was 531 to 1.  This was about a 13-fold increase in the ratio.  In comparison, the CEO to worker pay ratio in Europe is 25 to 1.  While Europe might not be who we want to emulate, our vastly skewed ratio is not something to be proud of.  During the period of 1990-2005 CEO’s received an average 300% increase in compensation, compared to 4.3% for factory workers. 
    More up-to-date information for early 2010 is found on the AFL-CIO website showing median compensation for CEO’s in ALL industries to be $3.9 million, $10.6 million for CEOs’ of corporations listed in Standard and Poor’s 500, and $19.8 million for companies listed in the Dow Jones Industrial Average.  Since the average worker’s pay is about $36,000/year, the current ration for DOW Jones CEO’s to workers is 550 to 1.
    If one wonders how such a large gap might develop, the factor of how the board of directors determines pay must be considered.  It is pretty much a rigged game.  First, CEO’s help select members of their board, which generally includes CEO’s of other corporations.  The process turns into a quid-pro-quo process when these CEO’s mutually sit on each other’s boards in an interlocking fashion.  Second, many times boards of directors hire outside “compensation consultant” experts, to portray a semblance of economic respectability.
    The CEO compensation process was explained in detail by retired DuPont CEO, Edgar S. Woolard, who is now chair of the New York Stock Exchange, Executive Compensation Committee.  He is concerned about CEO compensation because he fears CEO’s are losing public respect.  When it was stated that CEO salaries are set by competition for their services in the executive labor market, he replied, “bull.”  About the claim that CEO’s deserve ever higher salaries because they create wealth, Mr. Woolard described the rationale as a “joke.” 
    According to Woolard, here’s how it works:
    The compensation committee [of the board of directors] talks to an outside consultant who has surveys you could drive a truck through and pay anything you want to pay, to be perfectly honest.  The outside consultant talks to the human resources vice president, who talks to the CEO.  The CEO says what he’d like to receive.  If gets to the human resources person who tells the outside consultant.  And it pretty well works out that the CEO gets what he’s implied he thinks he deserves, so he will be respected by his peers.
    The boards of directors “buy” into what the CEO wants because the outside consultant is an “expert.”  Also, small salary increases might show the board does not highly prize the CEO’s work.  If one of the board members objects to the salary increase, there are several other CEO’s on the board, from other companies, who will make sure the raise happens.  This continues the escalation of CEO salaries.  Compensation consultants go along to ensure continuing work for the company.  They realize the CEO has a big say about whether they are hired.  So, CEO’s get richer and richer, along with their compensation consultants.  Another quid-pro-quo. 

  • W. D. (Bill) Hamm says:

    February 8, 2011 at 5:10 pm

    I like those figures Mike. The top 10% pay 70% of Federal Taxes, than lets extrapalate out about 10% for all of us 62% ers leaving the middle class paying about 20% of Federal taxes. What happens if we turn that around a little and ask who pays the highest percentage of income. That is the telling figure.

  • Dan C says:

    February 8, 2011 at 5:12 pm

    Part 2 of 3

    It is very important to note that for the rich, most of their earnings do not come from “working.”  In 2008, only 19% of the income, reported by the 13,480 individuals making over $10 million/year, came from wages or salaries.  The vast majority of income came from investments, dividends, and trusts. 
    As of 2007 income inequality is the highest it has been in 95 years.  Analysis of 2008 tax returns shows the top two-tenths of 1% (.2%) with household incomes above $1,000,000/year, received 13% of all income in the US.  By 2007, the top 400 earners in the US averaged $344.8 million a year.  This was an increase of 31% in only 1 year.  And how did the income for the top 400 rise so quickly?  It was the 2007 tax cuts in capital gains and dividends, down to a mere 15%, proposed by the Bush Administration in 2003.  Almost 75% of the income for the top 400 comes from capital gains and dividends.  These few people had a 15% tax rate on 75% of their earnings compared to the 35% for the remaining highest income earners.  In addition, the Social Security tax (FICA) only taxes to about $105,000/year, yielding the top wage earners another enormous reduction in taxes.  In 2003, the top 1% of earners received 57.5% of all capital income, up from 40% in the early 1990s.  In 2003, the bottom 80% of earners received only 12.6% of earned income, down from 1983, when they had 23.5% of earned income. 
    WEALTH
    First, it is necessary to define wealth as everything someone owns, minus any debts.  However, economists define wealth as marketable assets (e.g., real estate, stocks and bonds), not counting durables such as cars and appliances, since they are usually of more value using them as intended, instead of converting them to cash.  Financial Wealth is a little different term usually used to define wealth in non-home wealth.  In other words, it is net worth minus net equity in owner occupied housing.  Financial wealth is a more liquid form of wealth.
    The 2008 Great Recession proved to have far more impact on the middle class than the wealthy.  Edward Wolff, economist, concluded that as of 2009, there was a 36.1% decline in wealth (marketable assets) for median households versus only an 11.1% decline in wealth for households in the top 1%.  An amazing fact is that the top 1% of earners pay a lesser percentage in taxes, by almost ½, than the 9% of earners just below them. 
    Wealth in the US is concentrated in few hands.  As of 2007 the top 1% of wealthiest people owned 34.6% of all privately held wealth.  The next 19% of wealthiest people owned 50.5% of the wealth.  That means that the Bottom 80% of the people only own 15% of the wealth in the country.  The top 1% of households owned 42.7% of our country’s financial wealth.  The next 19% owned 50.3%, and the bottom 80% owned only 7% of the nation’s financial wealth.  The Top 1% of households owned 38.3% of all privately held stock, 60.6% of financial securities, and 62.4% of business equity.  The top 10% of the wealthiest households own 80%-90% of stocks, bonds, trusts, and business equity.  Also, they own over 75% of non-home real estate.  Basically, the top 10% of the wealthiest people in our country own the United States of America.
    Inheritances reveal the same thing as wealth above.  The Federal Reserve Bank of Cleveland reveals that only the top 1.6% of the people receive $100,000 or more as an inheritance.  91.9% of the households receive NO inheritance.  Conservatives wish to eliminate the estate tax in America, which will yield a large loss of tax revenue for the US.  Plus, it only benefits less than 1% of our population.  In fact, the rich have circumvented much of the estate tax.  Many states have allowed the rich to set up trusts in perpetuity, allowing trusts to own businesses, houses, and much else.  Many states allow trust recipients to avoid payment to creditors for personal debts and suits caused from accidents or injuries.  Those states have received about $100 billion in trust funds.

  • Dan C says:

    February 8, 2011 at 5:16 pm

    Part 3 of 3

    Regardless of the determinants of wealth, minority groups fair far worse in the distribution of wealth.  In determining financial wealth for whites versus blacks and Hispanics, the ratio of their wealth is 100 to 1.  The collapse of the housing market has made the gap between the rich and the rest of America even greater.  The number of households with no marketable net value rose from 18.6% to 24.1% in 2009.  In the 21-year period from 1983-2004, 42% of all our country’s created wealth went to the top 1% of wealthiest people.  94% of the created wealth went to the top 20% of wealthiest people.  This means that the bottom 80% of people received only 6% of our country’s created wealth during a 21-year period.    This illustrates the powerlessness of the bottom 80%.  The World Institute for Development Economic Research has information comparing the wealth distribution in the US with other countries.  It shows that only Switzerland has more wealth (71.3%) owned by the top 10%.  Otherwise, the 8 developed countries average about 55%.  This does not compare well for the US at 69%.
    In the relationship between wealth and power, wealth can be seen as a valuable resource for securing power.  Purchasing stock means control in corporations, and corporations have a tremendous power in the US.  The top 1% of people own 38.3% of corporate stock.  The top 20% own 91.1% of corporate stock.  The bottom 80% of households only own 8.9% of the corporate stock, and it is declining.  Power can also lead to wealth, as exemplified by corrupt Government. 

    If the top 1% of households have 30-35% of the wealth and the top 20% have 84% of the wealth, remembering the top 10% have 85-90% of the stocks, bonds, trust funds, and business equity, it means that the bottom 80-90% have little chance to exercise much power at all.  This is borne out by the accelerating rise in wealth of the top 1%.  They are exercising the power they have to accrue more wealth.  In a New York Times analysis of a 2004 Internal Revenue Service report, it revealed that 33% of income gains from 1979 to 2000 went to the top 1% of households.  Meanwhile, the bottom 60% lost 5% of their income.  It was only the top 5% of households that made significant gains in income during that lengthy period.  The top one-tenth of 1% of households had more combined pre-tax income than the poorest 120 million people in the US. 

    Let there be now mistake, the wealthiest 5% basically own America.  What’s most frightening is that these same people seem to rather use their wealth to avoid paying taxes and corrupting our Government, instead of just paying taxes.  Obviously, they feel they are getting their money’s worth buying Congresspersons and Supreme Court Justices.  Well, I believe the opportunity for the American dream is meant for everyone, not just a chosen few.  If not, then our country should go the way of Egypt and all the other corrupt Governments.  This is supposed to be a government based on freedom and equality.  Not a governemnt of a chosen few supported by hundreds of millions of indentured servants

  • Mike Downing says:

    February 8, 2011 at 5:55 pm

    Bill,

    Last time I looked, all my payments to the IRS are in $$$$$s not %s. I can’t write a check to the IRS in %s but I do write many in $$$$$s.

  • Ginny says:

    February 8, 2011 at 6:06 pm

    Dan:  One big reason Franklin Delano Roosevelt jumped in to ease the economic crisis that started in 1929 was to save capitalism. He and others were afraid the people might take to the streets unless the government stepped in. You may know that at that time, we did have a number of communists and socialists who were willing to challenge the status quo. And, by the way, the gap between rich and poor was about the same as it is today. And that economy subsequently collapsed just as ours did—and will again, I believe. We don’t learn a thing.
    I was talking to a couple of people the other day who said that the American people might just get as fed up as the Egyptians and start protests for some of the same reasons. (One of them has a doctorate in political science.)
    Our country has become a banana republic, not to mention a plutocracy. It makes me ashamed. I’m not planning to travel abroad in the immediate future, but if I did, I think I’d claim I was a Canadian.

  • W. D. (Bill) Hamm says:

    February 8, 2011 at 8:35 pm

    I feel much the same about traffic fines Mike. If someone at my income level gets a DWI the fines alone are going to bite me for over 5% of my income. The middle class person will pay 1% or less of his or her annual income. The millionaire will pay less than 1/10th of 1% for that same fime. If everyone paid based on percent of income prosecuters would be able to afford to prosecuting the rich instead of cutting plea bargains with their attorneys. If you don’t think police officers understand this, go and watch your local speed trap and see who is getting pulled over. Watch the string of 3 plus cars who were all speeding and see for yourself who is and who isn’t targeted.

  • Dan C says:

    February 8, 2011 at 9:29 pm

    Hey, now the rich just need to write more $$$$$ to make a larger %%%.  Good point Mike.

  • Mike Downing says:

    February 9, 2011 at 10:11 am

    Bill,

    There is one MN tax where we do need to discus %%%. Property Taxes are far and away the most regressive tax in MN. The VOSS database at the DOR confirms this (its on the DOR website).

    I spent the last four years trying to get the MN Legislature to pass a Bill to limit property taxes to 4% of household income, to 5% of household income and then 6% of household income. The four Bills were supported by the GOP Minority but were defeated by the DFL Majority.

    We have a 7.125% metro sales tax limit (7.5% in Hennepin Cty) and a 8.75% income tax limit but we have no income based limit on property taxes. Hence, we have retired seniors forced into selling their lifelong homes since they may be paying 10%, 20% and up to 30% of their income on property taxes (source MN Senior Federation survey). 

    Our property tax system needs to be reformed!

  • Mike Downing says:

    February 9, 2011 at 10:15 am

    Thanks Dan.

    Apparently idiotic narcissists can even make a good point. We are making progress. grin

  • Dan C says:

    February 9, 2011 at 10:40 am

    Now Mike, I wouldn’t jump to conclusions.

  • W. D. (Bill) Hamm says:

    February 9, 2011 at 12:10 pm

    I agree Mike that something needs to be done to lower the property tax burden on retired elderly below a certian income level. I have supported that repeatedly on the DFL platform for over 20 years now yet nothing gets done because it doesn’t benifiet the rich and middle class who dominate our legislature. I would not support tax relief for that vacation cabin though. At least not as long as our countys are predatorily going after the estates of the poor to cover elderly care.

  • Mike Downing says:

    February 9, 2011 at 1:41 pm

    Bill,

    Sounds like we agree on property tax reform and excluding non-homesteaded, vacation homes & non-resident homes from the reform.

  • Dan C says:

    February 12, 2011 at 10:18 am

    I see the discussion is being diverted from income to property tax.  Mike made the statement it is the most regressive of the taxes.  Well, I don’t see statistical evidence to substantiate that.  Also, the context of regressivity should have been defined.  Property tax regressivity in relationship to income might be strong.  However, in relationship to the value of the property, it is a pretty progressive tax.

    When people choose to focus on the regressivity of the property tax, they are redefining its relationship from value of property to amount of income.  If the earlier writers are concerned about the alleged “regressivity” of the property tax, then what are their recommended fixes?  Is it more complaining without an idea for a fix?  If so, the idea probably has little merit. 

    I do agree with vacation property.  However, only one homesteaded property should receive an income tax deduction, no matter what state it is located in.  For example, there are MInnesota residents who stay in AZ or FL more than 6 moneths to claims residence there, and avoid any income tax.  Those people should then lose the homestead exemption on their home property in Minnesota, since it is no longer their primary residence.  It is then a win-lose decision, instead of win-win.

    If Mr Hamm and Mr. Downing propose to eliminate the income regressivity of property taxes, then property taxes should be linked to income AND home value.  The only practical way I can think of handling that would be for the state to use the county assessment values, coupled with the income on the tax return, and set the property tax.  This would help remove the income regressivity and ensure income and property valuation are considered.  However, I would like to point out that the income used in the property tax should include both earned and unearned income.  In that way, people with substantial income (not coming from wages or self-employment) such as trusts, dividends, interest, capital gains, etc. will also have that income considered in the computation of their property tax.

    I think the above should be a pretty easily accommplished fix for the “regressivity” problem alleged by Mr. Downing.  I am concerned about the efforts being spent by people to identify and complain about poblems, but little effort to maake recommended fixes.

  • Mike Downing says:

    February 14, 2011 at 9:09 am

    Dan,

    LMAO at you & not with you.

    Go to the DOR website and read the VOSS database report. A revised report came out three weeks ago. Of course, you can continue to be lazy and make judgmental comments w/o any facts…

    I have attended the House & Senate Tax Committee meetings over the last 4-5 years. My comment on property taxes being the most regressive tax in MN was merely quoting your hypocritical DFL friends in the Tax Committee meetings.

    Your DFL friends did nothing to limit property taxes or make it income based. Your DFL friends were offered Bills to limit the increase in property taxes to 3% a year and they rejected it. They were offered Bills to limit to 4%, 5% & 6% of household income but your DFL friends rejected these Bills 4 years in a row. Yes, your DFL friends are hypocrites when they say they are for the poor, the middle class and retired seniors.