Ironic Mark Kennedy Statement

Today's ironic quote comes from Rep. Mark Kennedy while campaigning today in St. Cloud.

"It is not only unacceptable, it's irresponsible to just attack, attack, attack, attack, and present no proposals."

He was talking about Social Security. Apparently it's bad policy to criticize a flawed proposal (which the Democrats have offered an alternative-- don't tear down the house just because the sink leaks), but good practice to "attack, attack, attack, attack" Patty Wetterling on a personal level.

Does Minnesota really want to be represented by someone who refuses to listen to reasoned criticism, and attacks people on a personal level?

Seems like someone has his "values" upside down.

Using your tax dollars to create a crisis

Government is supposed to be open. That's why we have the Freedom Of Information Act. The Bush administration again thinks it is above the law and has missed a deadline to reveal how it is spending your tax dollars to promote a "crisis" in Social Security.

This looks strangely like the same tactics of withholding information that led us into Iraq.

A Plan To Make Taxes Fairer

Growth And Justice has put together a plan for tax fairness that's winning approval of from Minnesota Democrats AND Republicans. It starts to address the unfairness of the poor paying twice the effective tax rate as the richest Minnesotans.

I encourage you to take 10 minutes and read the plan. It's a breezy and eye opening read. It explodes some of the popular myths held by both the right and the left on taxes.

In short it proposes raising the income tax on those making more than $400,000 in exchange for lowering taxes on businesses. In support of taxing the rich, it points out that high income tax states do just as well economically as low income tax states. In support of lowering taxes on businesses it points out that when business taxes are raised, the burden falls disproportionately on lower-income households through price increases.

The idea was presented to the Minnesota House Tax committee on Wednesday and will be presented to the Senate Tax committee next month. So far, there is no proposed legislation to put this idea into action. If you read the report and like the idea, I'd encourage you to contact your State Representative and Senator and ask them to draft legislation supporting this.

The report also backs up what I've been saying here for the last month, the "No New Tax" cult is forcing the poorest to pay at nearly twice the rate as the rich.

Bush plan is the "Bad Deal"

FDR's "New Deal" worked to create a fair safety net that didn't discriminate based upon age. Bush the second's unfair "Bad Deal" is age biased.

In your 40's? You're the prime target for age discrimination by the Bush administration's expensive Social Security privatization plan. According to an analysis from the Oregonian newspaper, the risky Bush plan gives you 7% less than the current stable Social Security plan. That's even assuming a historic 4.6% return after inflation and fees.

Older workers (age 50 to 55) fare a bit better, only getting 3% less than they would now.

Income has relatively little bearing on how individuals would fare under changes. Workers in their 40s who are paid twice the national average wage and those paid half the average would lose approximately the same share of benefits as those paid the average wage.

People over 55 will see no change, and those in their 30's may do a little better if the predictions of historic returns hold up.

What this does is create three Social Security systems. A guaranteed one for the retired or nearly-retired, a risky one for younger workers and just a "Bad Deal" for those inbetween.

Thankfully, the AARP is not falling for Bush's "divide and conquer" strategy. The AARP is spending $10 million to combat the millions of taxpayers dollars the Bush administration is pouring into the campaign to promote the "Bad Deal".

Not content to have just tax dollars promoting this windfall for investment firms, a private Bush support group has hired some of the people who worked on the slanderous "Swift Boat" ads to counter the AARP

"They are the boulder in the middle of the highway to personal savings accounts," said Charlie Jarvis, president of USA Next and former deputy under secretary of the interior in the Reagan and first Bush administrations. "We will be the dynamite that removes them."

Luckily, even the Republican Congress is wary of the Bush plan. The truth about the "Bad Deal" will be louder than the Neo-Con propaganda -- but only if you give the truth voice. Be vocal, call your representative, write the paper, and correct the media when they only rely on Bush administration figures and don't check things out for themselves.

Cracks in the "no new tax" cult

I'm checking the forecast in Hades this morning. David Strom of the Taxpayers League wrote something I actually agree with. He's against Governor Pawlenty's plan to expand gambling in Minnesota because the revenue it raises would be less than the true cost.

Of course it was Strom's creation of the "no new tax" cult that led Governor Pawlenty into this corner.

Let's hope Mr. Strom takes the next step and addresses the the reason for Gov. Pawlenty's cornered status. I encourage him to support legislation that would repeal the tax breaks to the super-rich 1% of Minnesotans who are taxed at half the effective rate of the state's poorest citizens.

UPDATE: A version of this letter is published in Friday's Star Tribune.

Blinded by the "no new tax" cult

Why is it that people who complain about high taxes support the Republican Party? Don't they get it that their party is sticking it to them to appease the super rich?

Today's case in point comes from Apple Valley. Wilton Anderson writes the Eagan Sun Current to confirm he is one of the "suburbanites who has traded ( 21-year-old homeless illegal immigrant Francisco) Serrano's well being in government program cuts for a few tax dollars. For that I am sorry, but I have no more tax dollars to give."

Judging from the newspaper articles, and city council minutes Anderson is a regular at meetings complaining about property taxes. A check of the Dakota County property records shows he owns a house and two vacant lots on Long Lake in Apple Valley. On all three properties he pays about $3,774 a year in property taxes.

Yet this guy consistently supports conservative candidates who continue to tax him at a higher rate than the richest Minnesotans. If he's like most of us he's paying an effective tax rate of about 12% while the richest 1% are paying just 8.2%.

I suspect he's not stupid. He's just been blinded and misinformed by the "no new tax" cult that runs the Republican Party.

A Wacko View Of "Fair"

I opened my Star Tribune this morning and found this incredibly offensive statement in the letters to the editor.

Marge Miller wrote "If (school)vouchers do become available, I do not think they should be limited to low-income students only -- that is not at all fair . Vouchers should not be based on your income -- low-income people seem to get all the benefits today."

Marge, who lives in Coon Rapids, has written the Star Tribune before about printing too many liberal letters. (A familiar right-wing rant).

Forget for the moment that school vouchers are generally a bad idea. Marge is displaying a smug ignorance of reality when she talks about fairness.

Surprise Marge! The MN Department of Revenue says low-income Minnesotans are paying more of their income for those increasingly scarce benefits than you are. The poorest Minnesotans pay an effective local and state tax rate of 17.4 % while most Minnesotans pay about 12%. The richest 1% pay just an 8.2% effective tax rate.

You read that correctly, the poorest are taxed at twice the rate of the richest. How can anyone defend that as fair?

Coon Rapids, where Marge lives, is isolated from poverty. The 2000 Census shows the lowest poverty rates in the state are in the Twin Cities suburbs. When you don’t see poverty, it’s easier to be callous about it.

Unfortunately, it’s that sort of isolation and self-centered thinking that is behind many of Governor Pawlenty’s proposals. The “no new tax” cult preserves a low tax rate for the rich at the expense of the poor, while doing little for those in the middle except pushing up your property taxes.

Perhaps when there are more poor people it will be tougher for those in the middle and top to isolate themselves from poverty. Of course at that point it will take years to undo the damage.

UPDATE: The Strib has published my response.

An even uglier tax truth

Yikes! I made an error in my posting about state and local taxes. I erroneously stated that the wealthiest 1% of Minnesotans (earning more than $402,294 a year) pay an effective state and local tax rate of 10.1% while the poorest 10% (earning $10,235 and less) pay an effective state and local tax rate of 17.9%

The truth is even uglier than that.
The top 1% of earners in Minnesota pay just 8.2% of their income in state and local taxes, not 10.1%.
That's less than half of the 17.9% rate paid by the Minnesotans who earn the least.

I am humbled by my error.

The tax truth is uglier than my simple example

Life is more complicated and uglier than the simple example I posted about how Governor Pawlenty's defacto tax increases fall unfairly on the poor. It's been pointed out that someone making $150,000 is probably going to pay more in property tax than someone who makes $40,000 because they own a more expensive home. So a $200 increase for the $40,000 earner is likely to be a larger dollar increase for the $150,000 earner.

That's true if you assume that higher income = more expensive house, which is not always the case. Remember one of America’s wealthiest persons, Warren Buffet lives in the same modest Omaha, NE home that his parents did. (This is more common than you might think. See more in the p.s.)

In real life, property tax increases are even more unfair than my simple example.

The truth is the poorest Minnesotans (earning $10,235 and under) see 5.3% of their income go to property taxes. The top 1% (earning $402,294 and more) see just 0.8% of their income go to property taxes. So the people at the bottom are paying nearly seven times more of their income in property tax than those at the top. This is information from our own Minnesota Department of Revenue. These are real numbers and this is AFTER the "circuit breaker" that prevents the poorest Minnesotans from paying even more.

And total taxes? The MN Department of Revenue says the Effective Tax Rate (total of all state and local taxes as a percentage of income)shows the poorest (earning $10,235 and under) pay 17.4% while the richest (earning $402,294 or more) pay just 10.3%. How can anyone defend that as fair, or suggest doing something that skews it even more?

Not in the top or the bottom? You're still paying about 12% in total state and local taxes--that's more than the wealthiest.

p.s. The Warren Buffet example is much more common than you might think. Thomas J. Stanley has made a living helping companies market to the wealthiest Americans. He writes in his best selling book "The Millionaire Next Door" that roughly half of Millionaires don't live in expensive "high status" neighborhoods. And those that do NOT live in the expensive neighborhoods accumulate wealth about twice as fast as who do.

Also, Stanley's extensive survey shows that those Millionaires who live in the expensive neighborhoods tend to be the ones who have inherited their wealth.

Again, the point is the value of your house is only a very loose predictor of your ability to pay. Pushing up property taxes to pay for tax cuts for those making the most is very unfair.

Dayton energizes State Central meet

(Anoka, MN)
US Senator Mark Dayton made a few predictions about the 2006 race at Saturday's DFL State Central Committee meeting.

"The lies they tell (about me) will be nasty," Dayton said of the Republican campaign that has made him the number one target for 2006. "But the truth I will tell about them will be just as nasty."

Dayton said he will have plenty of ammunition and recounted the lies that President Bush, Condoleezza Rice and other administration officials have told the American public.

He said he did not vote to confirm Alberto Gonzales for Attorney General because of the bad advice Gonzales gave President Bush.

"He told Bush he's above the law. That's not just wrong -- that's dangerously wrong."

The remark drew a standing ovation from the 400-plus DFL delegates and alternates.

Dayton also took aim at one Republican expected to run against him, Representative Mark Kennedy. He noted that several years ago, Kennedy had written President Bush urging the privatization of social security. But more recently, Kennedy has refused to discuss his position on social security.

"Not only will I discuss my position," said Dayton, "but I'll disclose it as well."

Dayton is strongly against privatizing social security.

"Bring 'em on" shouted one delegate as Dayton wound down his speech.

"When we say 'bring 'em on', we stay and fight," said Dayton. "We don't go hide in Crawford, Texas."