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Gov. Dayton Proposes a Tax Overhaul: What Do You Think?

Take our poll; then click on to our Patch stories below to see what legislators and others are saying.

 

Gov. Mark Dayton this week unveiled a proposed state budget and tax plan that would, among other things, lower Minnesota's sales tax from 6.875 percent to 5.5 percent but broaden it to cover more items such as higher-priced clothing, car repairs and other services.

In his quest to avoid a projected $1.1 billion revenue shortfall, Dayton said his plan also includes raising the income on some groups of taxpayers (such as the state's 2 percent of highest-income earners). He is proposing to reduce property taxes and cut the corporate tax rate on businesses. (To see a Patch story and UpTake video of Dayton's speech, click on this link.)

Bottom line: The governor said he wants to provide property tax relief, boost funding for K-12 education, stimulate job creation and create a fairer tax system.

But does Dayton's plan really do that? The day after the dust began to settle on his proposals, the governor was facing plenty of skeptics.

"This patch work of finding creative ways to gain more revenue just shows that the whole tax system needs to be redone," contended Tim Roche, CEO of the Twin Cities North Chamber of Commerce, whose membership includes businesses in Roseville, Arden Hills, Blaine, Columbia Heights, Fridley, Mounds View, New Brighton, Shoreview and Spring Lake Park.
 
What do you think? Does the governor's plan make sense? Is it bad or good? Goes too far? Or not far enough. Tell us what you think in the poll below.

Meanwhile, Patch editors are gathering reaction from legislators and others from around the metro. Below are links to some of the stories from around the metro:

"It Took Guts To Put an Actual Plan on The Table"

Woodbury Rep. Kieffer: Governor's Budget 'Increases Taxes All Over the Place'

Rep. Bob Dettmer Reacts to Gov. Mark Dayton's Budget Proposal

Area Legislators Mixed on Dayton Budget Proposal

  • Do you support Gov. Dayton's tax plans, including his proposal to lower the state sales tax but broaden it to cover more items ?

    (Voting has been closed for this question)
    • Yes, and I will tell you why in the comments below.
        8 (23%)
    • No, and I will tell you why in the comments below.
        25 (73%)
    • I'm not sure, and I will tell you why in the comments below.
        1 (2%)
    Total votes: 34
  • Your vote will only count once. This is not a scientific poll. View Results Vote!
Related Topics: Budget, Gov. Mark Dayton, Government, and Sales Tax

David Arvidson

6:05 pm on Wednesday, January 23, 2013

Blending? 1.1B in tax increases 223M in spending cuts, we fiscal conservatives have said all along, the Democrats just want to get into your wallet, don't let them.

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Frank McGruber

11:55 am on Friday, February 1, 2013

Dayton is a twit. Another failed human being masquerading as a public servant.
He is 100% politics of envy.
"Fair share"
Right.

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Deb Schroeder-kivisto

6:45 pm on Wednesday, January 23, 2013

REPUBLICANS WANT TO CLEAN OUT OUR WALLETS AND GIVE IT TO THE RICH WHO HAVE ALL THE LOOPHOLES

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dave wayne

6:58 pm on Wednesday, January 23, 2013

rich people gave u your job !

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Susan

7:41 pm on Wednesday, January 23, 2013

No one "gives" anyone a job. They hire to create more profit. Most often it's a benefit for both parties. And FYI, not all business owners are rich.

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yomammy

7:46 am on Thursday, January 24, 2013

ok deb....wow...just...wow.

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Big_Phish

9:55 am on Thursday, January 24, 2013

Ok a couple of questions:
Is it more effective to raise taxes to pay the dept or is it more effective to control and cut spending to pay down the dept?
Susan what does the Government concider rich? What Pay level?
Deb, who is taking money here. I agree that some of the loopholes are insane, but this 99%'er occutard, yes I am quoting occutard, mentallity is very disturbing. Don't worry we will be a Socialist country soon and you will be living the dream, with your mediocre health care, your mediocre food, mediocre pay, mediocre house, mediocre car, ... mediocre everything. But the mediocre will be happy because everyone will be forced to be mediocre. Here's the best part, you can feel good about telling your children, "Just be mediocre", and you will be concidered a success. Down with American Exceptionalism. The new Union Slogan "Be Mediocre".

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Frank McGruber

10:36 am on Thursday, January 24, 2013

Folks, I suggest you ignore Deb. A quick Google turns up plenty of evidence that she is a professional troll.

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Susan

10:55 am on Thursday, January 24, 2013

Big Phish, I don't represent, or even work for the government, you will have to ask them what they consider rich.

This issue (2%) can easily be argued from both sides. In regards to total dollar amounts, the higher income earners pay more. In regards to the percentage paid to state and local taxes, the poor and middle class are paying more.

I don't claim to have the "right" answer, only that I would like more specifics when taking a position on this proposal.

In regards to dave wayne's comment; the ridiculous notion that the rich in this state/country are "giving" the rest of us anything when hiring is preposterous. There is a benefit to the company when they hire or they would not do it, and to imply that it is a one way street is disingenous and simple minded.

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Big_Phish

11:48 am on Thursday, January 24, 2013

I do agree with Dave Wayne that you are given a job and the more wealther they are the more I can make. But, I chose to take the job, I give them the opportunity to give me the job. Let's take Cargill/ 3M/ Best Buy, they give people jobs and yes they are Rich. All business owners are not rich but a lot of business owners are also not employers.

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Edward

2:42 pm on Thursday, January 24, 2013

"Let's take Cargill/ 3M/ Best Buy, they give people jobs and yes they are Rich."

3M and Best Buy are public corporations. They are owned by stockholders, many of whom are not rich. So to say "they are rich" is disingenuous. They are entities owned by the public . . . individuals (thousands of whom are from the middle class like me, as I own 3M stock -- does that make me a "job creator"?), and some pension funds, mutual funds, etc. (which are holding the wealth of millions of middle class individuals).

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Tim Johnson

7:32 pm on Thursday, January 24, 2013

That is not even logical. Not on any level.

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Markus

8:38 pm on Thursday, January 24, 2013

"3M and Best Buy are public corporations. They are owned by stockholders, many of whom are not rich"

Just like oil companies who are routinely railed on for gouging us. Nobody complains about the price of scotch tape or iPads though.

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Big_Phish

10:06 am on Friday, January 25, 2013

OMGosh Edward. Who cares about private or public, the basic fact is I have never been given a Job from a poor man or woman.

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George P. Burdell

12:24 pm on Friday, January 25, 2013

A simplistic response to this comment would then be;
.Democrats want to clean out our wallets and institute socialisim... which really worked well for the USSR ..hmmm.

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Susan

12:29 pm on Friday, January 25, 2013

Probably not a poor business owner, but millions are employed by middle-class (not rich) small business owners. One does not need to be rich to start a small business and hire employees, just as not all rich people are business owners and/or job creators.

Markus, people don't complain about oil companies for being job creators, although yes, almost everyone complains about gas prices. Many of us complain because of their blatant disregard for the environment, regulations, laws, people and property, all in the name of profit. Yes, every company's number one priority is profit, but when they start sacrificing safety for profit, harsh judgement is rightfully due.

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mark

12:23 pm on Monday, January 28, 2013

Deb the left winger all the way!

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Spotman

3:05 pm on Monday, January 28, 2013

Deb What a simplistic and incorrect observation. You must be one of the 47%.

Brad Koehn

6:45 pm on Wednesday, January 23, 2013

I'll be curious to see if Minnesotans spend enough on clothing worth more than $100 to bring in $2B in revenue. I'm a bit skeptical of that part. The rest looks good.

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Rob

12:51 pm on Thursday, January 24, 2013

All I know is, my $500 clothing purchase will be five $100 clothing purchases from now on ;-)

dave wayne

6:48 pm on Wednesday, January 23, 2013

how about spending less like everyone has to !!!!!!!!!

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dave wayne

6:51 pm on Wednesday, January 23, 2013

i'm a single parent, i could balance the budget in six months !!

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Deb Schroeder-kivisto

7:15 pm on Wednesday, January 23, 2013

lollllllllllllllllllll yup typical republican dave

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smallbizguy

12:03 pm on Thursday, January 24, 2013

Deb you are truly uninformed... Republicans/conservatives want to provide you with opportunities to fill your wallet if you are willing to work hard instead of expecting the government to provide for you. I lost everything three years ago as a business owner who didn't pay myself, took out a huge loan against my home that had been paid for so I could pay my employees when the economy went down the tubes. I put my employees first and my family and I lost everything I worked 30 years to build. I didn't get baled out by the government nor would I ever ask for help from the Government. And according to this President, I am the "bad guy"

John

7:45 pm on Wednesday, January 23, 2013

Alright Single-Parent Dave, let's hear how you could balance the budget in six months. And don't give us any of that "cut out the waste" business unless you have specifics.

My budget fix would take more than six months, BUT... We should allow the copper mining project up north. The environmental damage can be minimized (still some damage), but the economic impact outweighs that. Second, include a sales tax on all food, clothing, and services and reduce sales tax to 3.5%. Third, increase the gas tax and use that money the gas tax money to build more lanes in the metro area. Trafflic delays are discouraging business growth in the metro area. Fourth, increase income tax rates to make up any shortfall after the three steps above. State income taxes are DEDUCTABLE, while sales tax isn't. If my state income taxes increase $300, I'm only going to pay $200 because I can deduct those taxes. If I pay the state in sales tax, I'm out the entire $300.

With the additional economic growth and the lower, but broader, tax base, I think I could balance the budget in 18 months (which is pretty good for a married parent).

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Big_Phish

11:19 am on Thursday, January 24, 2013

You will never fix any budget without spending cuts. All budgets are the same from household to Government. I can't tax my kids or demand a pay increase because my spending is out of control. Balancing the budget is easy, don't spend what you do not have. Tax this and tax that is rediculous, it is not the solution. I know I could balance the budget in 6 weeks, ... but I would have to have absolute power for 6 weeks.

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Susan

11:35 am on Thursday, January 24, 2013

Thankfully our government is designed to give no one absolute power. Unfortunately, because of the Republican's over-zealous, and one-sided agenda in the last couple years, the majority of Minnesota voters decides to oust the Republican majority so they have lost the power to balance the Democrat's demands. Even I don't agree that this will be beneficial in all cases, and we will probably end up reversing this in two years, but it is a good lesson to learn. The majority of Minnesotans want compromise and productive work from our leaders and the sooner they accept and honor what the people want, the sooner we can again find balance.

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Big_Phish

12:43 pm on Thursday, January 24, 2013

Try again Susan. You will never achieve anything by standing in the middle. We have insane abuses across the board but when Conservative, not Republicans or Democrats, come in and try and fix it, they are labeled as hating Children, the elderly, Black, Hispanic, Homosexuals, Martians, Klingons and Klingoffs. We can't win. There are to many people who want to give everyone everything. Not thinking where the money is coming from. Thus, enslaving them. Being in politics is basically voting for the Prom King or Queen, with the same Juvenile mind set. People need to stop thinking that this world is all about them. It's time to put the big boy and big girl pants on and think factually and not emotionally.

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Susan

12:50 pm on Thursday, January 24, 2013

Big Phish, being as most of what you have said after "standing in the middle" does not describe me, I won't address each issue...we actually agree on a couple of those points.

Whatever you want to call it; extremism, partisan ideology, absolutism, or just plain old stubbornness, more and more Americans are expressing their disapproval. Each party has their idea of the perfect and absolute way the country should be run, thankfully one side will never have it's way entirely.

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Big_Phish

1:23 pm on Thursday, January 24, 2013

Susan, these are the reasons why we are headed in the direction we are. If you play out the the dscissions be made, it leads to a Socialist life style. May be too extreme but, what else can it lead to?

Susan

7:47 pm on Wednesday, January 23, 2013

I'm not quite sure how we can decide if this is good or bad without the numbers.

How much revenue will be raised from the 2%?
How much savings will the average consumer see from the lower sales tax rate?
How much revenue will be raised from the additional sales tax items?
How much will it cost to allow a $500 return on property taxes?
How much will revenue be reduced with the lower corporate tax rate?
How much will the additional sin tax on cigarettes raise?

Anyone have a link?

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Susan

8:29 pm on Wednesday, January 23, 2013

This is from the governor's site so it is one-sided but it does give a little more info:

What Does Comprehensive Tax Reform Include?
» $1.4 Billion in Direct Property Tax Relief. The Governor’s budget provides a rebate of up to $500 for Minnesota homeowners. This will reduce the average homestead tax burden 22% in 2013, and cut taxes a total of $1.4 billion in the FY 2014-15 biennium.

» A Fair Income Tax. The Governor’s budget asks the wealthiest 2% of Minnesotans to pay the same share in taxes as other Minnesotans.

» Historic Cut to the Sales Tax Rate. The Governor’s proposal represents the largest reduction to the sales tax rate in Minnesota history, from 6.875% to 5.5%. It saves Minnesotans nearly $500 million on currently taxed items in the first year.

» Helping Small Businesses. The Governor’s budget: 1) Helps Main Street businesses compete with online retailers; 2) lets small businesses claim an upfront tax exemption on capital purchases; and 3) reduces business property taxes $120 million through 2017 by freezing the state business levy.

» Cutting the Corporate Tax Rate. The Governor’s plan reduces the corporate tax rate by 14% – the largest reduction in 26 years. By closing corporate tax loopholes for some companies, we can afford to lower the corporate tax rate for all companies."

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Susan

8:46 pm on Wednesday, January 23, 2013

"According to the Minnesota Department of Revenue’s (DOR) most recent tax incidence study, middle income Minnesotans pay 12.3% of their income in state and local taxes. But the wealthiest 2% of Minnesotans pay just 9.7%. Governor Dayton's budget delivers tax fairness by asking the richest 2% of Minnesotans to pay a little more in income taxes.

A New 4th Tier. The Governor's budget creates a new 4th tier income tax bracket at 9.85% that will only be paid by the wealthiest 2% of Minnesotans. This new tax bracket will apply to all taxable income over $250,000 for married joint filers and $150,000 in taxable income for single filers.

$1.1 billion in "New" Revenue. This new tax bracket will solve our budget deficit and invest in property tax relief for all Minnesotans, a better education system, and crucial economic development measures to strengthen Minnesota's middle class.
98% of Minnesotans will see no income tax increase. The Governor's tax proposal ensures that the vast majority of Minnesotans will pay no tax increase. Under the Governor's plan, only 53,600 of Minnesota's 2.4 million income tax payers will pay more in income taxes.

By the numbers:
12.3% Percent of income middle class pays in state and local taxes.
9.7% Percent of income richest 2% pays in state and local taxes
98% Percentage of Minnesotans who will see no income tax increase."

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Randy Marsh

9:38 pm on Wednesday, January 23, 2013

"It saves Minnesotans nearly $500 million on currently taxed items in the first year."

This is flat out disingenuous and I wish the Governor would aim for clarity over rhetoric with statements like this. Of course it does, but why not mention the impact of all the additional items which will be taxed under your plan? You can't just ignore something like that, no matter how hard you're trying to sell it and it just makes him look like a shyster.

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Susan

8:34 am on Thursday, January 24, 2013

I agree, Randy. As I just wrote in the other (local) Dayton thread, I would really like it if at least our state politicians would start discussing both sides of an issue instead of presenting only one side. Being as I work with many in the 2% I cringed reading the second part that I copied here, but at least it is clear and explains why.

I was talking with a friend yesterday who will get hit at the federal level and now the state level. Standing face to face with her, it's hard to try and discuss why this is "fair". Although I've always opposed the phrase "their fair share", I now understand (with the 12.3% vs the 9.7%) why it is applicable. As I said above, I would like to see more accurate numbers on all the information and an explanation as to why we need more money for welfare programs before deciding if the numbers make sense and if I agree with the proposal.

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Carbon Bigfuut

10:08 am on Thursday, January 24, 2013

"According to the Minnesota Department of Revenue’s (DOR) most recent tax incidence study, middle income Minnesotans pay 12.3% of their income in state and local taxes. But the wealthiest 2% of Minnesotans pay just 9.7%. Governor Dayton's budget delivers tax fairness by asking the richest 2% of Minnesotans to pay a little more in income taxes."

State and local taxes?? Which cities in MN levy a local income tax? Wouldn't the "rich" who live in those cities pay a higher income tax rate?

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Susan

11:01 am on Thursday, January 24, 2013

CB, I copied this info from the governor's site. You pose a good question, but I don't have the answer.

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Edward

2:49 pm on Thursday, January 24, 2013

"Which cities in MN levy a local income tax?"

I believe they are including things like my local water and street light bill, as well as the school district levy that is a local tax.

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Smokin' Joe

2:57 pm on Thursday, January 24, 2013

I suspect that the main reason for the disparity in overall percentages is due to the sales tax. The rich could also pay "their fair share" by spending everything they make, as the less fortunate tend to do. What this really pushes is the ideology that savers are to be punished and consumers are to be rewarded.

dave wayne

7:55 pm on Wednesday, January 23, 2013

thank u susan, i agree 100% but u have to have money to get your business why take it from them?

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Susan

8:00 pm on Wednesday, January 23, 2013

dave wrote: "u have to have money to get your business"
Please explain your statement, I'm not sure I understand what it is you mean.

This proposal includes a corporate rate DEDUCTION. This is good for business and hopefully businesses will stop running from Minnesota and this will help keep and/or create more jobs.

dave wayne

8:16 pm on Wednesday, January 23, 2013

thanks chris. gas taxes were just raised not long ago for roads check the governmemt web site to see where they really went.

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Eric

8:35 pm on Wednesday, January 23, 2013

In the end, this is a net tax increase. The governor is just playing a shell game shuffling things around to try to confuse and hide what it is, more money for greedy government, less for those who earned it.

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Randy Marsh

12:30 pm on Thursday, January 24, 2013

You absolutely right, Eric, it's almost as despicable as conservatives balancing the state budget on the backs of LGA and education and then pretending they actually held the line on taxes when all they did was force local municipalities to raise property taxes and beg their own voters to pass operating levies. Both are contemptible.

Jonathan Dough

8:51 pm on Wednesday, January 23, 2013

Never believe what a DFL'er tells you. Governor (I gargle with oatmeal) Dayton is a tax and spend ultra-liberal. Steal money from the rich and give it to some piece of human debris from Gary, Indiana or some female "pin cushion" from the inner city who can't keep her legs together. In 4 years I will be living in Florida where there are no state income taxes.

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Joshua

9:05 pm on Wednesday, January 23, 2013

"In 4 years I will be living in Florida where there are no state income taxes."

Well, don't let the door hit you in the rump on the way out, buddy.

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Randy Marsh

9:27 pm on Wednesday, January 23, 2013

I don't necessarily agree with everything Dayton has proposed, but I prefer the fact that he campaigned on raising taxes and appears to be pursuing that goal, unlike many conservatives who say they support education and then do everything in their power to undermine public schools.

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Randy Marsh

9:33 pm on Wednesday, January 23, 2013

One more thing, Jonathan, because I'm sure you're just a youngster who hasn't yet learned to differentiate between your head and your ass. Just because Florida doesn't have income tax does not mean you won't be paying as much or more in taxes while living there, especially if you're not making millions of dollars, which I don't think will be a problem for a spunky fellow like yourself. Do you honestly think Florida doesn't fund it's state government somehow?

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yomammy

7:50 am on Thursday, January 24, 2013

LOL jon.
We all want the schools to have enough money
Its the tiring "do it for the children" BS that keeps getting spewed every time they throw another tax increase at us.
The dem way to solve everything is to just throw more money at it (schools) instead of trying to figure out the real issue.

Jonathan Dough

9:14 pm on Wednesday, January 23, 2013

Don't worry about me Joshua. Phil Mickelson and I will land on our collective feet. Come visit me and I will take you to the Country Club for a round of golf and a steak and lobster dinner afterward. I will pick up the tab. Moving to Florida will put an extra $45,000 per year in my back pocket. That's $45,000 per year that Gov. Dayton will NOT have to urinate away.

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Scott Carlson

10:03 pm on Wednesday, January 23, 2013

Randy, general good comments. But please be careful not to make any personal attacks. Thanks.

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Randy Marsh

11:39 pm on Wednesday, January 23, 2013

I thought the comment was more a hypothetical than a personal attack on JD, but will certainly try to keep things civil.

Al Anderson

11:07 pm on Wednesday, January 23, 2013

So Scott Carlson....why do you allow Randy to leave his offensive comment here?

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Randy Marsh

11:37 pm on Wednesday, January 23, 2013

You really need to get out more if you find that offensive, Al. Typical bleeding heart always trying to find new and exciting ways to be feel insulted, discriminated against or offended. I won't take any more of your time because I would hate for you to miss any part of the 700 Club or Jack Van Impe Presents, but did you honestly find that offensive or do you just disagree with coherent, rational discussion?

matt lehman

11:31 pm on Wednesday, January 23, 2013

The electric pull tabs have not made the revenue projected to pay for the Vikings stadium so, the state needs more money. Sure they lower the rate but broaden the base thus making more revenue with us people paying more. This seems to be a reoccurring theme with the democrats, Obama raised our taxes even on those under the 400,000 mark and stated he again wants more in taxes at the inauguration. Now the state wants more money, the cities/counties/schools raised the property taxes. The dollar keeps buying less and they wonder why the economy wont recover? Prioritize the spending like responsible households must!!!

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Al Anderson

11:44 pm on Wednesday, January 23, 2013

Randy -- Im no bleeding heart, - just ask Susan. And your comment to Joshua was not only an unneeded insult to him...but it was also inaccurate. Florida has a broader sales tax -- but does not suffer liberal fools like this state does. Minnesota has become a welfare cesspool because the left wants it to be that way (vote buying)

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Al Anderson

6:40 am on Thursday, January 24, 2013

make that Jonathan...not Joshua

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Susan

11:47 am on Thursday, January 24, 2013

Did you really mean to involve me? ;-)

No, you're certainly not a bleeding heart, but I fear that you may be a bit blind to one side of some issues.

I think the Patch User Agreement lays down the guideline and it's up to each editor to decide what should be deleted. If Scott chose to leave it, it's his call and I will respect that, just as I respect your right to question the decision.

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Randy Marsh

12:35 pm on Thursday, January 24, 2013

I apologize, Al, for insinuating that your political views were in any way consistent with the mamby-pamby sensibilities you expressed by being offended by some previous comments. I need to be more careful about that, but it's nice to find people who are not so predictable based on their political leanings. I'm sure Josh will be just fine.

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Susan

11:55 am on Friday, February 1, 2013

My guess is that this will go whooooshh, Randy, but I do enjoy the entertainment value. I would have remained silent on this, but someone opened up a can of worms, why should I shut it, or even ignore it? Being as I "have nothing better to do and spend far too much time online" I am more than content to follow along all day and participate in the show.

Clyde

6:04 am on Thursday, January 24, 2013

Lets have a state government that spends less. It is too much to expect that folks will spend more to rescue the state.

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Jim Stangl

6:59 am on Thursday, January 24, 2013

Why does the state need more money?

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Robert Larsen

8:05 am on Thursday, January 24, 2013

If sales tax is added to more things, that will be permanent. The lower rate will be temporary. I remember when the sales tax began in 1967 at 3%. There were two .5% increases along the way that were supposed to be "temporary". They never went away. The decrease to 5.5% will not be permanent. It will slowly creep back up and the taxes on clothes and whatever else our incompetent state government adds tax to, will be permanent.

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Smokin' Joe

3:05 pm on Thursday, January 24, 2013

Exactly, any suggestion that this will be a permanent reduction is insulting to the taxpayers. The shell game will continue until those who use the services actually have to pay for them.

Kerri

9:31 am on Thursday, January 24, 2013

The first comment from Dave said it all. "1.1billion revenue raised with 223million in cuts" it's simple math. This is going to cost all of us. Robert is completely accurate that once the sales tax is put on more items it will stay that way and the rate will go back up. More serious cuts need to be made. We're hanging by a financial thread in my house and small business I own and we cannot support federal increases and state increases. Cut spending because this well is dry!

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yomammy

9:31 am on Thursday, January 24, 2013

ask mpls/st paul if their "temp" taxes ever went away for metrodome/target center/ excel center, etc...

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jer

9:45 am on Thursday, January 24, 2013

Dayton thinks everyone in the 2% got there like he did,,,born with a silver spoon in his mouth...TAX EVERYTHING ,,,let the poor and the" middle class" pay their "fair share"

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Russ Stanton

9:46 am on Thursday, January 24, 2013

People who earn more than $105,000 pay a lower effective rate of taxation than people under $105,000 in income. I don't hate the rich--I simple believe they should pay the same percentage in taxes that I do. Someone has to pay for essential services like education and higher education--they are not free. We have cut and cut and cut in recent years--higher education is getting less state support now than in 1999--and inflation has been about 37% since 1999--and enrollments have skyrocketed since 1999. We spend less per capita on higher education than Alabama and Mississippi--isn't that a great competitive position to be in! I will pay more taxes, but that is the price we pay for a successful society. I commend Governor Dayton for facing this head on--no acccounting shifts, or borrowing from future revenue--and a plan to evenually pay back the school districts.

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Carbon Bigfuut

11:29 am on Thursday, January 24, 2013

This is from the state of MN website. There are 3 columns, but the spacing may not come out just right.
---------------------------------------------------------------------------------------
Minnesota State Income Tax 2012
Tax Bracket (Single) [1] Tax Bracket (Couple) [2] Marginal Tax Rate
$0+ $0+ 5.35%
$23,100+ $33,770+ 7.05%
$75,891+ $134,170+ 7.85%
------------------------------------------------------------------------

So how is it that people making over $105K are paying lower taxes?

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Randy Marsh

12:44 pm on Thursday, January 24, 2013

Carbon, I noticed you left out the rates for those making over $200,000-$250,000. Why is that? You might also be able to look the non-income taxes paid from those categories you list and see what the rates look like after that. Warning, this will probably not help your stance.

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Carbon Bigfuut

1:19 pm on Thursday, January 24, 2013

Randy, I took that directly from the state of MN website. There were no brackets listed for $200k or higher.

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Susan

1:49 pm on Thursday, January 24, 2013

CB, here is the report that I think the Governor is referencing for his numbers. I don't have the time to go through it now, but you may find your answers. I am posting the link from an ipad. Some links won't work on a PC, but I'm not sure with a PDF.

http://www.revenue.state.mn.us/research_stats/research_reports/2011/2011_tax_incidence_study_links.pdf

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Tim Johnson

7:45 pm on Thursday, January 24, 2013

The way Democrats are able to claim that people at higher income levels pay a lower effective rate than people at lower income levels is by including sales taxes in the calculation. Because people at higher income levels save a larger percentage of their income compared to people at lower income levels they don't incur sales taxes, when expressed as a perctage of income, at the same rate as people at lower income levels. Due to the effect that sales taxes are not calculated on income, including them in the calculation is really like comparing apples to oranges and it really doesn't provide a basis for saying that people at higher income levels aren't paying their fair share.

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Carbon Bigfuut

1:19 pm on Friday, January 25, 2013

Exactly, Tim. Sales taxes, property taxes, excise taxes, etc. have nothing to do with a person's income and the tax they pay on that income. Including non-income related taxes to income earned makes no sense at all.

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Carbon Bigfuut

1:41 pm on Friday, January 25, 2013

Susan, skimming the report, I see they are attempting to tie sales tax and property tax to income earned - but those taxes have nothing to do with a person's income. If I buy a car, my income makes no difference in the amount of tax paid, it totally depends on the price of the car. The same goes for property tax - it depends totally on the value of my house and the mill rate assessed.

Personally, I'm all for allowing counties to charge an income tax on their residents, if that's what the residents vote to do. They could piggyback on the state tax forms to make it easy.

mark anderson

10:08 am on Thursday, January 24, 2013

Unfortunately, we're at the point - at both the State and Federal level - where we can't kick the can down the road anymore. The gridlock has to stop. Regardless of the hysterical comments on both sides of the isle, compromise is necessary. We can't just cut our way to a balanced budget; we'd have the poor dying in the streets. This isn't India. Any solution that works has to have revenue increases. The majority of us aren't rich, so we'd like to tax those who are. However, taxing the rich alone won't raise enough revenue. We all have to pay more. Sure, tax the rich first, but don't tax corporations (another "tax anyone but me" strategy), as our corporate taxes are already among the highest in the world. Want to chase more jobs to South Dakota or China? Try raising corporate taxes even more. Therefore, the Dayton plan makes sense, even if it actually forces me to accept more tax myself. Darn. I sure wish I could get someone else to pay my way.

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Rich

10:48 am on Thursday, January 24, 2013

Cut the spending: quit paying these people to live in Mn. and get paid to do so, with free rent, good, medical, that are all going into the 3rd generation now. Mother cannot take care of her children so county takes child away from here and into foster care. Now grandmother is the foster mother and gets paid then daughter is out making more babies and gets paid on welfare. CUT THE SPENDING.

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Susan

11:08 am on Thursday, January 24, 2013

"Steal money from the rich and give it to some piece of human debris from Gary, Indiana or some female "pin cushion" from the inner city who can't keep her legs together."

"quit paying these people to live in Mn. and get paid to do so, with free rent, good, medical, that are all going into the 3rd generation now. Mother cannot take care of her children so county takes child away from here and into foster care. Now grandmother is the foster mother and gets paid then daughter is out making more babies and gets paid on welfare."

These are some of the most ignorant, incorrect, and over-generalized statements that I have read in regards to those who are on welfare. Yes, the minority on welfare give the entire system a bad name, but most on any type of assistance need it to survive, want nothing more than to get a good paying job so they can get off assistance, and are sad and ashamed to be in their situation. It certainly would be nice if the welfare bashers would educate themselves on the actual facts before making derogatory and misleading statements.

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Chadwick

11:43 am on Thursday, January 24, 2013

Susan, do you interact with the people on welfare at all? I actually do and I can tell you that your generalization may be as far off base than the people you are bashing. You are assuming it is a tiny number and they are assuming it is a huge number. The practicality of it is that probably 40% if not more probably shouldn't be getting full assistance. The problem with our programs is that we have pushed people to get onto food stamps and welfare instead of trying to help them get off of it any many cases. I know people on disability because they get to stressed out, and no that is not a joke. I deal with one of these people on a regular basis and she smokes like a chimney, drinks a little and yet complains that she should get more money from the govt. We are creating a class and country full of people who think you are owed something. We should have a class in fifth grade that teaches you one plain fact "You aren't owed anything, go out and earn it"

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Susan

11:56 am on Thursday, January 24, 2013

Chadwick, I don't disagree. No one is "owed" anything unless you want to consider what we have all paid in to the government, with a promise of getting it back.

I took exception to the vile nature of the comments. It's obvious these people do not have a clue about how welfare is used by the "majority". Yes, several descriptive words here are subjective, but there is no question as to what was being implied.

Yes, I interact with people on different levels of assistance. Most want out, not more money. And yes, there are individuals who take advantage and feel entitled to hand outs, but I would vigorously argue that these individuals are in the minority. BTW, I've also known someone who collected SS (in her 30's) because of some supposed social anxiety. Being as she is now (in her 50's) out working in the public (without having gone through years of therapy), I know this was probably a situation where she stole from all of us. I desperately would like to see our welfare system overhauled, but we cannot do away with it. There really are people in need, and as history shows, charity does not keep up with true need. This country needs to be about more that 'every man for himself', we need to support community as well as the individual.

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Chadwick

12:02 pm on Thursday, January 24, 2013

I would completely agree that there are people that need assistance. The problem is people see the ones who take advantage of all of us and it makes us resent more and more of them. It's to bad the politicians won't make tough decisions when it comes to cutting or modifying anything. It's to easy for them to just keep spending money.

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Susan

12:16 pm on Thursday, January 24, 2013

And that's what I was pointing out. Instead of lumping everyone on assistance into one big group of lazy, slutty, entitled takers, let's be honest about the situation. The comments made were unhelpful, promote an inaccurate stereotype, and my reply stating the were ignorant, incorrect, and over-generalized were descriptions. The fact that they were also insulting is a reflection on the author of the comments and his choice to use the words he did, not my apparent want or need to insult as Al would have everyone believe.

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yomammy

12:38 pm on Thursday, January 24, 2013

nothing better than seeing a lifelong welfare gaggle fill their cart to the brim with junk food, then say "good food costs too much", proceed to "pay" with a foodstamp ebt card, go over and whip out a wad of cash to buy cigs and lotto, and then jump in their late model SUV with 22's.

Al Anderson

11:51 am on Thursday, January 24, 2013

And of course Susan -- you are the leader in making ignorant, incorrect and over-generalized statements. This state -- courtesy of DFL policy - has made Minnesota a magnet for those who would choose to take advantage of those policies.

You are the one who needs real life education.

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Randy Marsh

12:49 pm on Thursday, January 24, 2013

Susan does not need me to defend her, but I feel the need to point out that I find Mr. Anderson's tone to be quite offensive in this case. That is not the proper decorum for this discussion.

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Susan

3:33 pm on Thursday, January 24, 2013

Al, after thinking about this further, I will just say that unless someone comes after me personally first, my comments disagreeing with someone are most often directed at their words, not at people personally. THIS is the difference between you and I. You attack Randy and I personally because you don't like what we write. I point out errors in people's words and try to correctly label their COMMENTS, not them. Read my comment again that you found insulting. I did not attack the people, in fact, I left their names out of it, whereas your comment using the same words was a direct slap at me personally. Please consider this point as it is the important point you seem to be missing. Read how Chadwick replied and how I replied to him. This was a grown-up, rational debate. If you can't stomach what Randy and I write, don't read it...or should Patch place more regulations, rules, and laws in regards to our free speech in their comment section?

Jeff Parker

12:05 pm on Thursday, January 24, 2013

Saying that he is lowering rates is deceiving. Bottom line, Dayton is a "tax and spend Democrat" who wants more tax revenue so that he can give more to people who do less. Case in point, taxing clothing? A decent Winter coat can easily cost more than $100, and who in Minnesota doesn't need one? So, it's not the top richest 2% of Minnesotans who will pay more. All working people will! He is generally a liar serving unions and poeple looking for hand outs from bigger government.

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Al Anderson

12:07 pm on Thursday, January 24, 2013

Susan

As usual....no one besides liberals like you were insulting people directly. You can disagree with what people say....but you always go overboard and point the comments directly at the commenters. That is the difference Susan.

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Susan

12:31 pm on Thursday, January 24, 2013

Al, I REPLY to commenters who address me, or I reply to those who I disagree with...that's why we have a little "reply" button and free speech, provided that you abide by Patch's User Agreement. Until an editor tells me that I can no longer address specific comments, I will continue to do so. Until an editor tells me that I have crossed the lines with insults, I will continue to point out what I find to be offensive. Please explain how I am doing anything different that you, here on this thread...well, other than the fact that I have provided real and quoted information and facts, even going so far as to say that it is "one-sided". Never mind that I have not personally attacked anyone - only correctly used descriptive words to point out flaws in a couple comments, while your comments here have ONLY been negative in nature directed specifically at individuals. For crying out loud, I even defended you before YOU decided to make this personal. Time to take a look in the mirror, Al.

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mark

3:20 pm on Monday, January 28, 2013

Al, I couldn't have said it any better.

smallbizguy

12:10 pm on Thursday, January 24, 2013

i am at the point where the Democrats/Liberals can do what they want. Those who don't mind can stay here in Minnesota. Those who have a problem with (like me) can just move to a conservative state that is friendly to business and that doesn't have personal income taxes. Kids are grown, absolutely nothing keeping me in Minnesota and with the weather Texas and Florida look more attractive all the time.

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Jeff Parker

12:15 pm on Thursday, January 24, 2013

Agreed. Texas looks better all the time!

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Jonathan Dough

12:45 pm on Thursday, January 24, 2013

Well said smallbizguy. The State of MN can't tax you if you "ain't here." Residency in FL is 6 months and one day. I will stay in FL for 8 months and live in MN 4 months. Take That, DFL'ers.

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Carbon Bigfuut

1:24 pm on Thursday, January 24, 2013

Jonathon, Gov. Dayton made a remark about "taxing the snowbirds that live here less than 6 months of the year". Outside of getting additional sales tax revenue from them, I wonder how he's planning to do that?

Al Anderson

12:17 pm on Thursday, January 24, 2013

smallbizguy ..... I concur with your statement (except for the first two lines). As long as I am still here in MN I will stand up to the sort of fiscally irresponsible lunacy set up by the DFL and its cronies wherever it pops up.

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Randy Marsh

12:51 pm on Thursday, January 24, 2013

Al, can I get your address or PO box? I'd like to send you a cape.

smallbizguy

12:26 pm on Thursday, January 24, 2013

By the way, talking about leaving Minnesota for states that are friendlier to those of us who like to work hard and create jobs, isn't a threat, it's a choice, just like buying groceries at Walmart instead of Byerly's because of the savings.

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James Ishmael

12:29 pm on Thursday, January 24, 2013

The rich will just put their money where the Governor puts his, out-of-State. Or, worse yet, they will leave the State and go to Texas.

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Tony Nickelsen

1:28 pm on Thursday, January 24, 2013

On the surface folks the idea of decreasing the state sales tax percentage sounds appealing, along with receiving a mortgage credit. Adding to that, reducing ones property tax, which I feel is very regressive in nature. However, all this proposal sounds like is a bate and switch and doesn't really address the real problem and that is we have a spending problem. Not just in MN, but with our federal govt. The biggest problem itself is the complexity of the national and state tax codes. If we could find a way to simplify the tax code and not allow so many tax breaks for businesses and citizens and craft out a true and fair tax code, I guarantee people would be more satisfied.

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David

9:54 am on Monday, January 28, 2013

Well said, Tony. The country is obviously polarized and I think that governments (at both state and federal level) have missed the opportunity to simplify the tax code. There could be wins from both sides. Theoretically, with a lower tax and fewer loopholes, the left could get increased revenue making the top earners "pay their fair share" in actual realized taxes and the right could get a flatter "fairer" tax rate. Everyone would benefit from easier taxes and a simpler tax code would inherently take costs out of the system.

Paul Whackernutz

1:53 pm on Thursday, January 24, 2013

I'll give the man credit for at least trying to turn the dial on the tax code. 1) Surprised by the expansion of the sales tax, though. This is one of the most regressive taxes and it's a surprise that this would be one the DFL would expand since it hits their base the most. 2) A lot of MOA tourism is driven by 'no tax on clothes' (I know a lot of people from Chicago and CA that bring empty suit cases with them when they visit or come on business), plus people that come in from the hinterlands for back-to-school shopping. Hope this doesn't kill the golden goose, although the $100 exemption likely will soften the blow. 3) Ok with taxes going up to reduce a deficit, but we're getting a large expansion of spending. What the? 4) If we are going to have to live with the spending, can we please get a signed affadavit from Education Minnesota that we have finally "fully funded" education and put a stop to the annual whining that we don't? 5) The $500 property tax credit as an "offset" is a canard. That'll be spent by local tax increases before you know it (i.e. public employee pension and health care costs) with the rationale that taxes didn't really go up but were kept "flat" because of the $500 credit. 6) They should go after tax on internet sales.

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John

1:53 pm on Thursday, January 24, 2013

They went for "transportation". Right now, we need more lanes. I know the money got diverted before, but that doesn't mean it has to be that way.

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Smokin' Joe

10:50 pm on Thursday, January 24, 2013

Minneapolis spent last summer painting miles and miles of crumbling pavement through crappy neighborhoods in order to designate bike lanes. They're also in the process of rebuilding a multi-million dollar bike bridge that looks very pretty but doesn't want to stay up.
With what the Met Council has committed the taxpayers to in "alternative" transportation there's not a snowball's chance that priorities are going to change soon. Anybody remember having a voice on the Hiawatha Line? Central Corridor, Dan Patch? Red Line? There's more coming, and we get to pay for it.

Big_Phish

1:56 pm on Thursday, January 24, 2013

This is my proposal to balance the budget, it will work for any government:

Send layoff notices to the able bodied Welfare recipients!
Remove the right to vote for people on Welfare!
Cut Education. The schools get 9k to 10k per kid and our kids are still ranked 23rd in the World!
Term limits for Congress! Remove lifetime Benefits

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mark

3:24 pm on Monday, January 28, 2013

Everybody in Chicago and Gary Indiana knows they can come to Minnesota and live here on our dollar. I know people from there and they have told me so!

John

2:03 pm on Thursday, January 24, 2013

I think our state's "welfare" costs are high because of high healthcare costs. Without that, I don't think Minnesota would be out of line with other states.

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Edward

2:56 pm on Thursday, January 24, 2013

"I think our state's "welfare" costs are high because of high healthcare costs."

Correct. The majority of the money (and this is also where the most growth in the budget is, as the largest demographic of baby boomers age) is going to nursing homes to pay for indigent elderly folks who didn't save enough to take care of themselves in their old age. We could save a lot of money if we could kick them all out of the nursing homes, but nobody likes to talk about that. Instead they rant about the "welfare mothers" who are actually a much lower portion of the budget and cheaper, on average, to support than someone in a nursing home that costs $70K a year.

Donald Lee

3:06 pm on Thursday, January 24, 2013

3 things:

1. Once a tax is raised, it is rare that it is "reversed". Consider it permanent.

2. As I understand it, the governor's sales tax provisions are not only complicated, but they open the door to "layered" sales taxes, which economistts tell us are a bad idea. You want to pay once, not many times on the many stages of production, which produces unwanted economic effects.

3. With a heavy emphasis on the most unstable sources of revenue (upper income tax, expensive items, services), this plan guarantees boom-and-bust cycles will get worse, not better. Property taxes have some real virtues. One of those is that they are stable.

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Donald Lee

3:07 pm on Thursday, January 24, 2013

To be clear....boom-and-bust cycles of tax revenue. I'm not referring to the economy in general..

Russ Stanton

3:22 pm on Thursday, January 24, 2013

The 2011 tax incidence study of effective tax rates by the Department of Revenue shows the top 5% of income earners pay 9.7% of their income in state and local taxes, while everyone else pays an average of 11.5%. The reasons are many--more deductions for the top income earners, and top earners pay a smaller portion of their incomes in sales taxes and property taxes. One has to consider both state and local taxes, because most of the state's budget goes to local governments and school districts and that offsets property tax rates. Some other states that have lower income taxes--but since those states don't give as much revenue to local schools and local govenments, these states have much higher (regressive) property taxes. The top 5% should pay the same percentage of their income in state and local taxes as those making $32,000 to $67,00--who now pay 12.2% of their income in state and local taxes. When the top 5% don't pay thier share, it is always the middle income people who get hit with the bill. Thank you, Mark Dayton, for starting the discussion on tax reform and tax fairness.

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Smokin' Joe

3:35 pm on Thursday, January 24, 2013

Thank you Mark Dayton? Thank you Alida Messenger. It's nice to see people get what they want.

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Donald Lee

6:02 pm on Thursday, January 24, 2013

The numbers presented on the percentage of income taxes paid are open to discussion. The numbers presented by Dayton and cites above are cherry picked, and ignore the total tax bills of Minnesotans.

Let me provide a couple of links.

First, what Gov Dayton said:
http://www.twincities.com/opinion/ci_22404728/dayton-thissen-bakk-time-move-minnesota-forward-together?IADID=Search-www.twincities.com-www.twincities.com

and responses:
http://johnspry.com/?p=186

http://www.startribune.com/opinion/126863123.html

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Carbon Bigfuut

1:44 pm on Friday, January 25, 2013

Russ, I pointed out 2 days ago that your "inequality" statement is a fallacy. State and Property taxes have NOTHING to do with income. Is there some city or county in MN that levies an income tax? Do the "rich" pay less in income tax there?

I can turn your statement around and use the same logic to prove that people who live in rental housing don't pay their fair share of property taxes.

Smokin' Joe

3:40 pm on Thursday, January 24, 2013

Daytonthink: Ya know, if we only raised the cigarette tax to about ten thousand bucks a pack, not only could the government take care of all of us, but nobody would be able to afford to smoke anymore either. Talk about your win/win solutions.

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John

6:05 pm on Thursday, January 24, 2013

Donald is correct about the boom and bust of sales taxes on high-end items. The analogy for my family - on a personal level - would be increasing the sales tax on my vacation purchases. That's the first thing to go when money gets tight - making it an unreliable tax source.

I'd like to see a lower sales tax rate, but apply it to everything - food clothing cars haircuts flu shots etc. Then add a little to the state income tax rate if necessary.

As I've said before, since state income taxes are deductable, the more state income tax you pay, the larger the discount on that tax amount. In other words, if someone tops out at the 15% federal bracket, a state income tax increase of $100 only costs them $85. But if someone tops out at the 35% federal bracket, that extra $100 of state tax only costs them $65.

Also, the lower sales tax rates on non-essentials will encourage people from other states to shop for bigger ticket items (TV's, furniture, Christmas shopping.) here. At the same time, people aren't likely to travel across state lines to buy weekly groceries simply because MN is charging a 3% tax on the grocery bill.

We need to be smart with out tax strategies. My approach pulls money from other states and the federal government to help us out. That's may be considered selfish, but Minnesotas pay a higher % of federal tax per capita than most other states. So it's only fair.

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Smokin' Joe

10:31 pm on Thursday, January 24, 2013

I get your point Chris, but don't you think that just maybe our neighbors might have something to say about that? This is getting to be fun now. I can't wait until Dayton's voters get wind of this little trial balloon:
http://www.startribune.com/politics/statelocal/188307181.html?refer=y
" Legislators are already discussing ways to make the governor's plan more acceptable to the business community. Bakk, for instance, is thinking about offering nonresidents of the state a break on the clothing sales tax.
That, he said, could help the Mall of America's tourism business and extend "an olive branch to the mall." Bakk said Canada offers a similar tax break to foreign visitors."

How sweet can it get, tax your residents at a higher rate than the people who live somewhere else.

And the special interests are already nose deep: "Food, child care, burial services, fundraising sales, prescriptions, mining and agricultural equipment and textbooks would remain exempt from sales taxes."

Anyone want to guess how long it takes for lawyer's fees to join that list?

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Donald Lee

12:21 am on Friday, January 25, 2013

The tone of that Strib article is close to fawning on Gov Dayton. The author seems to think Dayton's plan is a Big Deal, and is rooting for its success.

The way I read it, the DFL is going down the same road as the Democrats in Washington. Raise the rates and the taxes on lots of people, and then soften the blow with exemptions, rebates, and subsidies. The beauty in that is to give politicians lots of power to grant favors.

The other road is to have taxes be simple and broad. Few (or no) exceptions. That is a much harder thing to do because it's not good politics.

The former ends up with higher rates because you can't exempt just a few. Pretty soon everyone wants a "favor".

It's great politics, though.

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Smokin' Joe

4:35 am on Friday, January 25, 2013

To your point Donald: http://sbs.mnsu.edu/ursi/Mntaxworkgroup-finalreport.pdf
So, is the $500 property tax rebate a one-time bribe or permanent?

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John

8:42 am on Friday, January 25, 2013

Good Politics vs. Good Government: Dayton is on the right track with a broader, but lower sales tax. But then he mucks it all up by adding all these little exceptions and provisions to his overall plan.

Rather than pick around the edges of Dayton's plan, Republics could pick up on Herman Caine's KISS approach and say "no credits, no exceptions, no gimmicks". I think that's good politics and good government.

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yomammy

10:21 am on Friday, January 25, 2013

FLAT tax...no exceptions, no credits, no gimmics....

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Smokin' Joe

11:50 am on Friday, January 25, 2013

Actually, the Republicans get to sit back and enjoy the show this time around. Bakk and Thissen look scared to death and seem to be on the defensive, while Hann seemed to be having a hard time stifling the giggles when they were interviewed on the tube last week. And here I thought the Democrats won.

John

6:13 pm on Thursday, January 24, 2013

And welfare wise - Edward is right to bring up the nursing home care. When someone's grandparents or parents rid themselves of assets (if they have any) to go into a nursing home, people say they're going "on the state". But that's WELFARE! Just like any other welfare. They don't have enough money to live so the government pays. That's the elephant in the room. $100,000 annual nursing home and medical bills for one person. And there's more and more people in this situation all the time.

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Susan

7:03 pm on Thursday, January 24, 2013

Thank you, Edward and Chris. This is an important point that needs repeating every time people want to point to the welfare moms livin' high on the system and carelessly having more children for society to support. Although this is a small percentage of the welfare bill, it is by no means representative of the average person who needs or uses assistance in this state.

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yomammy

7:34 am on Friday, January 25, 2013

Except welfare moms do it on purpose.
Welfare is a TEMPORARY bridge..not a way of life.
I am totally FOR those that truly need it
I am totaly for a massive welfare enima to route out the dbags that are abusing our system.

Tony Nickelsen

10:24 am on Friday, January 25, 2013

Interesting points all the way round, but no easy solutions!
The biggest problem going forward for me personally is how to pay for healthcare in the future. It's obvious that employers feel they have to pass on more of the cost to the employees then in the past because shareholders want to see more profit on their investments. Or, small businesses in general would have to close there doors because they wouldn't be able to afford to pay for employees escalating premium costs. And, with the ever increasing medical costs happening, where will it end. Obamacare is complex, like our tax code and doesn't really solve the overriding feeling among many Americans that we will be able to afford to pay for it in the future.

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yomammy

12:40 pm on Monday, January 28, 2013

Obama care is FREE!!! havent you heard!?!?!?!
thats how it got passed....the usual lefty "for the poor, needy.....children..."
10% of america "benifits" from this, at a tune of 1 TRILLION+ dollars.

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Tony Nickelsen

1:19 pm on Monday, January 28, 2013

I agree, welfare is a temporary solution until people can get back on their feet again. However, it is not that simple for people to get off of because of way some people have manipulated the system. Obamacare is also too complex for most people to figure out. It's not free, everyone will have to pay something into the system or it won't remain solvent!

yomammy

1:37 pm on Monday, January 28, 2013

how CAN it remain solvent.... you got the SAME group of people, paying ever increasing taxes, fees, dues to cover for the same people that dont pay...and never will.
the FSA is growing. And no politician with the balls to stop it.

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Tony Nickelsen

3:15 pm on Monday, January 28, 2013

The reason it's growing is because our population is growing, which means their are going to be a higher % of people on welfare. Plus, with the cost of living going up, up and up, I don't see how struggling Americans will be able to keep up with it! Again, I agree welfare is a temporary fix, not a permanent solution!

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John

6:16 pm on Monday, January 28, 2013

Most people pay less tax now as a percentage of their total income than they did in the 70's.

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Donald Lee

8:46 pm on Monday, January 28, 2013

Please do me a favor, and when posting this sort of statistic, cite the details.

There are so many of these numbers floating around, and they are easily manipulated to say whatever you want. For instance, the "percent of income" thing depends on what you count as income, and what you count as tax. The other confusion is between wealth, money income and total income. For instance, a college student from a wealthy family may have zero income, but certainly not poverty stricken. Is that student one of the "rich" or the "poor"?

Let's have some specifics, so we know what we're talking about.

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Scott Carlson

3:17 pm on Monday, January 28, 2013

"FLAT tax...no exceptions, no credits, no gimmics."...
So no mortgage deduction, no deduction for making charitable contributions and no tax credit for college education. Correct?

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mark

3:29 pm on Monday, January 28, 2013

Clean up the fraud going on with welfare and social security, It's a start!

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Smokin' Joe

5:06 pm on Monday, January 28, 2013

"FLAT tax...no exceptions, no credits, no gimmics."...
If everyone had some skin in the game it would be next to impossible to pass the silly appropriations that are normal right now. Who really benefits by building a billion and a half dollar train line from St. Paul to Minneapolis and killing the bus route? If every program had to survive the review of the people who pay for them we'd likely have a much leaner public sector.
Unfortunately, it will be next to impossible to get the politicians out of the business of picking winners and losers, as that seems to be how most of them get elected.

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John

6:21 pm on Monday, January 28, 2013

When I said, "no exceptions, no credits, no gimmicks", I was only referring to the Minnesota sales tax. I think it's dumb to have SALES taxes be progressive. The sales tax rate should be lower and broader-based. Our heavily progressive income tax should remain that way.

Will Bildsten

3:33 pm on Monday, January 28, 2013

We do not need to become a state with the highest income taxes that discourage talent from coming to Minnesota. If anything, our state tax should be flatter. I believe it is, however, fair to broaden the tax base, but I believe the rate should not be lowered as much as proposed, unless significant spending reforms took place.

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John

6:27 pm on Monday, January 28, 2013

I don't think that Minnesota's higher income tax rates discourage talent from coming to Minnesota. People come here and stay for good jobs and a good quality of life. If low income tax rates were a primary factor, states with lower income tax rates would have a higher standard of living than us Minnesotans. But they don't. Very little talent is moving to states like South Dakota or Mississippi. Typically, the best and brightest leave those states for higher income tax rates.

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Donald Lee

8:49 pm on Monday, January 28, 2013

Certainly the income tax rate is not the only factor, but it is a factor. Look at the places with the most growth. Look at Texas and Florida. Taxes matter.

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Smokin' Joe

3:26 am on Tuesday, January 29, 2013

Chris, I would suspect that you're right at the medium income levels, as it strikes me that most of the middle class people in this state are likely here as an accident of birth geography. People do come here for jobs, which is why the metro area is still expanding and outstate is stagnant. That's also a key reason to make this state more business friendly, as the people who are the most mobile will include tax structure when they make those decisions about moving here or not.

Don Stiff

6:35 pm on Monday, January 28, 2013

How about cutting some things . We should cut out some fat of State Government . All department spend or waste money on dumb things.

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John

7:05 pm on Monday, January 28, 2013

There's not very much fat in state government. Improvements can always be made, but there's not nearly the "waste" that people outside of government might think.

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Smokin' Joe

3:47 am on Tuesday, January 29, 2013

You may be right but "perception is reality." When most Minnesotans observe or deal with the state they see an incredible amount of waste. Fair or not, every time a motorist idles down 494 and wonders why it takes 8 trucks and a thousand cones for one worker to patch a hole, the state takes the hit. In everything from licensing to inspections, it appears that government workers have an awful lot of time on their hands. The legislature isn't blameless here either. A good PR firm would immediately suggest that if they didnt have anything to do, then they should do it out of sight.
It would be fun to take a budget apart line by line from the beginning, with no external pressures, and see what amounts came up.

John

9:35 pm on Monday, January 28, 2013

This article is from 2011. I'm certain that it applies to 2012 as well. The % may increase a little in 2013, but will still be lower than the 70's.

"U.S. tax burden at lowest level since '58" By Dennis Cauchon, USA TODAY Updated 5/6/2011 5:49 PM:

"Americans are paying the smallest share of their income for taxes since 1958, a reflection of tax cuts and a weak economy, a USA TODAY analysis finds. The total tax burden — for all federal, state and local taxes — dropped to 23.6% of income in the first quarter, according to Bureau of Economic Analysis data.

By contrast, individuals spent roughly 27% of income on taxes in the 1970s, 1980s and the 1990s — a rate that would mean $500 billion of extra taxes annually today, one-third of the estimated $1.5 trillion federal deficit this year."

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Donald Lee

10:27 am on Tuesday, January 29, 2013

Please square those numbers with these:

http://www.nationmaster.com/graph/tax_tot_tax_as_of_gdp-taxation-total-as-of-gdp

and these:

http://taxfoundation.org/tax-topics/tax-freedom-day

Tax foundation puts that number as 29.2% for 2012.

I think these statistics vary mostly by choosing different taxes, and leaving some out. To get a true picture, it's important to remember that you need to consider federal, state and local taxes, and both income, entitlement, and excise taxes, including sales taxes. It's also important to remember that in many states, one tax is deductible for the the purposes of calculating other taxes. (state taxes for federal purposes, for instance, and property tax refunds)

Bottom line - it's not so easy to calculate.

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Donald Lee

10:28 am on Tuesday, January 29, 2013

.... and in this thread, we're talking about state taxes, not federal. Comparisons with federal taxation are not totally relevant.

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John

3:36 pm on Tuesday, January 29, 2013

I think we can agree though, that the percentage of income that we're paying for taxes has not increased over the past forty years.

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Donald Lee

3:56 pm on Tuesday, January 29, 2013

I'm not at all convinced. I see a lot of numbers, and depending on where you get them, they can tell wildly different stories. I don't like to draw conclusions until I have a solid understanding of the issue, and how the numbers are calculated. I'm still not comfortable on this one.

That said, I know that the total *spending* has been going up for 100 years. Look at the graph about halfway down this page: http://www.usgovernmentspending.com/us_20th_century_chart.html

In 1940, total spending (federal, state, local) was around 20% of GDP. Today, it's over 40. It should strike us as odd that spending (40%) is a larger percentage of GDP than taxation (30%). Why?

I can give one explanation, and that's the deficit. 40% (40%!!) of federal spending is deficit. I haven't done the math, but that might cover it. If not, questions still need to be asked and answered.

Over the last 40 years, I also know that the sales tax and income tax rates have gone way up in Minnesota.

The state and federal governments do not have a right to some fixed percentage of our income. Government exists to perform a function, and should tax only enough to accomplish it, and no more. How much progress do citizens get to keep?

Note that spending IS taxation. The federal debt will be repaid, one way or another. See: http://mendotaheights.patch.com/blog_posts/about-those-91-income-taxes and http://mendotaheights.patch.com/blog_posts/entitlements-promises-and-debt

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John

5:27 pm on Tuesday, January 29, 2013

The aspect I find especially difficult is figuring out how much money is simply redistributed. A hundred years ago, very little money was redistributed by the government. Pull out the money that the government gives right back to its citizens and I think the actual "spending" would remain pretty constant.

Spotman

8:34 am on Tuesday, January 29, 2013

Government has to reduce spending, not raise more taxes.
They created this mess and now, they want the tax payer to solve it.
Tax Reform Now!!!!

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Smokin' Joe

10:02 am on Tuesday, January 29, 2013

The people who continue to vote in our government are not necesarily taxpayers, nor are they the ones who are asked to pay for "this mess." Until the people who use the services actually have to pay for the services it's not likely that government will reduce anything.

Smokin' Joe

10:45 am on Tuesday, January 29, 2013

According to the governor's plan the $500 property tax rebate will be ongoing. So, a substantial portion of outstate Minnesota will no longer pay any property taxes, or will pay minimal property taxes. It's a nice deal if your existing taxes are $784 {Aitkin} and you get $500 back. Not so nice a deal if your property taxes are in the $6000 range and you get $500 back. Looks like the next campaign has already begun...

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yomammy

11:43 am on Tuesday, January 29, 2013

Its called shifting money around---nothing to see here...

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John

3:54 pm on Tuesday, January 29, 2013

It's stupid shifting though isn't it? My property taxes are about $2200. I deduct that from my federal income taxes and therefore also on my state income taxes. So the net affect of the $500 property tax credit for me is only about $350.

Remember that Jesse Ventura rebated our a portion of our estimated sales tax to give surplus money back. That was smart (though it would have been smarter to pay cash for projects rather than issuing bonds).

The only thing smart about Dayton's plan is broadening the basis of the sales tax. There should be a sales tax on vitually everything, but the rate should be much lower.

Overall though, the state should lower the portion of revenue derived from sales taxes and other non-deductable taxes.

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