Dayton: Tax reform is the difficult routePublished 3:15pm Thursday, January 24, 2013
BLOOMINGTON — Tax reform is no easy task, said Minnesota Gov. Mark Dayton on Thursday at the Minnesota Newspaper Association.
He said it always starts out with two strikes against it: powerful opposition by those who benefit from the status quo and overcoming projected deficits. In this case, Dayton’s plan is seeking to make up for a $1.1 billion projected shortfall while proposing an income tax increase on the wealthy and new sales taxes. He also wants to pass a property tax rebate and lower income taxes on middle- and low-income earners.
“Threats of doom will escalate to fever pitch but must be placed tin the context of what is best for Minnesota today or tomorrow,” Dayton said.
The good side, he said, is that Minnesotans believe the tax system is unfair to the middle class and want reform.
The Democratic governor cited surveys and his 2010 election and the 2012 success of Democrats, which took control of the Legislature, as why Minnesotans want a change in the tax system.
His $38 billion budget proposes to increase state revenue by $2.976 billion, or 8.5 percent. He wants to reduce sales taxes from 6.875 percent to 5.5 percent but tax more items. He wants a new income tax rate of 9.85 percent for married couples making more than $250,000 and unattached people who make more than $150,000. He would cut the corporate income tax rate from 9.8 percent to 8.4 percent and have a property tax rebate no higher than $500.
Most Washington politicians have learned to talk vaguely about the evils of deficits and then kick the can down the road, Dayton said. Meanwhile, state and local politicians must deal with them head on. He said over the past decade Minnesota has had too many “one-time” fixes, from shifting school payments to raiding funds.
He said his No. 1 principle this budget season was “no games, no gimmicks, no one-time fixes.”
Dayton said his property tax rebate will offset products they would have to pay new sales taxes on. He said cuts to local government aid have reduced services in cities and counties and resulted in an 86 percent increase in property taxes in the last decade. He proposes $120 million in state aid for cities and counties.
The governor said he gets asked whether Social Security will be there in their retirement years. He tells them, “It depends on the economy.”
Education is crucial to the future of children and grandchildren, he said. More money in education, he said, is no guarantee of success but less money is a guarantee of less success.
He quoted hockey great Wayne Gretzky: “You miss 100 percent of the shots you don’t take.”
He proposed $240 million more for education, of which $80 million was slated for higher education, $118 for schools, $40 million for all-day everyday kindergarten, $125 million for special education and other funds for state student grants, teacher development and learning English.
It was the annual convention of the state’s newspaper trade association, so naturally he fielded questions about his proposal to tax printing, advertising and the newspaper itself.
Reed Anfinson of the Swift County Times said the newspaper would get taxed three times before it is read.
“Rural community newspapers are the core of democracy,” Anfinson said.
Other question askers noted the tax would hurt the ability to employ reporters to cover local government. One asker said because TV and radio do not attend meetings regularly, if newspapers don’t do it, no one will.
Dayton said whether it is the bar association opposed to the proposed legal services tax or the retailers disliking the proposed clothing tax, groups impacted want an exemption.
“Where do you get the revenues that most Minnesota agree they want to do?”
He said solving the riddle of preventing horrible mass killings by deranged people is going to be tough. He said law enforcement needs more information on the mental backgrounds of subjects. He said laws would need to balance the Second Amendment with proposals such as reducing access to high-volume clips.
He received a question about the Pine County sheriff’s comment — that he would not enforce federal laws he interprets as in conflict with the Constitution.
“I hope the citizens of Pine County look at the statements by the Pine County sheriff the next time he is up for election,” Dayton said.