About That “Soaking” Of Minnesota’s Rich

For a long time, we’ve been hearing about how Governor Mark Dayton and DFL legislators “soaked the rich” back in 2013. That’s become the conventional wisdom at both the state and national levels, from both liberals and conservatives.

For example, at the national level, Patrick Caldwell from liberal Mother Jones magazine reported that Dayton ran on a “soak-the-rich platform of massively hiking income taxes on the wealthiest people in the state.”

Locally, conservative columnists Joe Soucheray and Katherine Kersten have long been beating the “soak the rich” rhetoricial drum, as has the conservative Pioneer Press editorial board:

“What’s the plan? Tax the rich, then tax the rich again, then tax the rich again?”

Finally, the Chair of the Minnesota House Tax Committee, Greg Davids, is among many conservative state legislators who have used “soak-the-rich” rhetoric to full effect.

Is the “Soak” Rhetoric True?

But did Governor Dayton’s 2013 tax increase on individuals earning over $150,000 and couples earning over $250,000 actually “soak” them in any meaningful way. This chart, derived from the Minnesota Department of Revenue’s 2015 Tax Incidence Study, calls that conventional wisdom into question:

MN_Soak_the_Rich_chart

This chart shows that the highest earning Minnesotans will only be paying a slightly higher proportion of their income in state and local taxes in 2017 than they did in 2012, under the rates in place before the 2013 tax increase. In 2012, the highest income Minnesotans were paying 10.5 percent of their income in state and local taxes. By 2017, the projection is that the highest income Minnesotans will see their state and local tax burden inch up to 10.7 percent.  This 0.2 percent increase hardly represents punitive “soaking.”

On a somewhat related issue, the chart also shows that the 10 percent of Minnesotans with the highest incomes look to be paying a much smaller share of their income in state and local taxes (10.7 percent) than the decile with the lowest incomes  (26.4 percent). However, on this point, the report contains an important caveat about the first decile data (page 17):

“…effective tax rates in the first decile are overstated by an unknown but possibly significant amount.”

But back to my original and primary point, which is not impacted by this caveat:  Despite all of the wailing and gnashing about the alleged mistreatment of the highest income Minnesotans, the impact of the Dayton-era tax increase on top earners’ overall state and local tax will be negligible.  Higher taxes on top earners didn’t cause the massive job losses that conservatives promised — Minnesota currently has the fifth lowest unemployment in the nation — and they didn’t soak anyone.

Don’t Forget About Local Taxes

How is it that Minnesota’s top earners are paying higher taxes, yet still are paying a lower share of state and local taxes than any other income grouping? Part of the reason is that the top 10 percent will only be paying only 2.2 percent of their income in local taxes in 2017, which is much less than the 3.1 percent share of local taxes that will be paid by the average Minnesotans, and less still than the share of local taxes paid by the lowest-income Minnesotans.

Impact_of_local_taxes_on_tax_burden_by_decileThis is a point that is frequently missed, or intentionally ignored, by people who focus solely on state tax burdens, without also taking local tax burdens into consideration.

So, did Mark Dayton really “soak-the-rich” when he increased taxes by $2.1 billion in 2013?   Inflated rhetoric aside, it turns out that the Dayton tax increase was more akin to a light misting than the predicted soaking.

Note:  This post was also published in MinnPost.

Congress Needs To Vote On Obama’s Proposed War on ISIL

I’m an Obama backer.  Though no President can ever be perfect, I admire what this President has done on the economy, health care reform, bringing home the troops from the Bush Middle East wars, and many other things.

Congress_war_declaration_authorityBut I disagreed with him last night when he said it would be “welcome” if Congress supported U.S. attacks on ISIL.  It would be more than welcome.  It would be necessary.

I’ll let others decide whether congressional authorization is constitutionally or statutorily required for a bombs and “advisers” action like this.   But strict legality aside, democratic principles dictate that a democracy’s representative body probe the executive branch’s plans and vote on authorization before we commit as a nation to the human and economic costs associated with a potentially protracted military engagement.

In 2008, I agreed with Obama when he said:

The President does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation.

As Commander-in-Chief, the President does have a duty to protect and defend the United States. In instances of self-defense, the President would be within his constitutional authority to act before advising Congress or seeking its consent. History has shown us time and again, however, that military action is most successful when it is authorized and supported by the Legislative branch. It is always preferable to have the informed consent of Congress prior to any military action.

With only a 15-minute presidential speech presenting one side of the argument available, none of us yet has sufficient evidence to make an informed decision about whether or not we should support these proposed attacks on ISIL.  Congress needs to do it’s job and give the nation a free and open debate, and a democratic decision.  If Members of Congress really want to “support the troops,” an informed, transparent pre-strike debate about the pros and cons of this military action would support the troops in a much more meaningful way than yellow ribbons ever could.

– Loveland

Minnesota Senate Candidate McFadden Releases New Humorous Ad

Mike_McFadden_groin_hilaritySaint Paul, Minn. — Minnesota U.S. Senate candidate Mike McFadden (R-Sunfish Lake) followed an earlier campaign television ad that ended with a child-inflicted injury to his groin with a new  television ad that uses thinly veiled flatulence-based humor to further make his case for election to the U.S. Senate.

“We’re just trying to have some good clean fun, while making a very serious point about Al Franken’s big government, job-killing stuff,” said McFadden.

The ad opens with a fog rolling over a grainy black-and-white photo of a frowning Senator Al Franken. Ominous music drones throughout the spot, and two 10-year old boys on a playground chime in in a sign-songy tone.

Male adult announcer: “Something is very, very rotten in Washington.”

Male child actor #1: “Al Franken says the Iraq War and Great Recesssion  are not his fault. But he who smelt it, dealt it.” (giggle)

Announcer: “Death panels.  IRSgate. Benghazi. Al Franken wants to keep it silent. But we all know, they’re silent but DEADLY.”

Male child actor #2: “Whoever rebuts it, cuts it.” (giggle)

Mike McFadden: (Giggling and holding his nose ) “I’m Mike McFadden, and I declare it, so Al can no longer blare it.”

(McFadden then sits on whoopee cushion. McFadden and kids giggle in unison.)

Mike McFadden:  “Oh no, not again, Al!”

The ad began running across Minnesota today. Like the groin ad, it was created by Washington-based Sophmoric Productions.

– Loveland

Note:  This post is satire and the featured ad doesn’t exist, for now.

Minneapolis Stepping On It’s Applause Line

Betsy_Hodges_begs_for_applauseSo Minneapolis Mayor Betsy Hodges is directing Minneapolitan social media mavens to tweet on over to #bragmpls to brag about Minneapolis, and run down other cities.

 “When you go to their cities,” she joked, “talk about how disappointing they are compared to Minneapolis.”

I can hear it now.

“Yeah, New York City is nice and all, but frankly Central Park is a little disappointing compared to The Yard.”

“Chicago? I hate to be mean, but I was a little disappointed that the architecture was all so old, kind of like Minneapolis had before we had the good sense to demolish it, and replace with a fresh 1970s look.”

“San Francisco, meh. I looked everywhere to find a Culver’s, but was sooooo disappointed to learn that they haven’t arrived there yet. I couldn’t wait to get home.”

Okay, I acknowledge Mayor Hodges was making a joke when she talked about expressing disappointment in other cities.  Still, the hashtag cheerleading campaign is no joke to Mayor Hodges and her public relations team.   And to me, her public begging for hashtags is a wee bit #pathetic.

Of all of the contrived things about contemporary professional sports stage management, nothing is more inauthentic than the Jumbotron exhortations for fans to “Make Some Noise!” The piped-in artificial rhythmic clapping and the mind-numbingly chirpy D.J. Casper song “Everybody Clap Your Hands” fall into the same category.   Inevitably these perky little pick-me-ups come when the bats are silent, the defense is porous, and the hometown ownership is starting to worry about meeting its beer sales targets.

But here’s the thing: Minneapolis’s bats are not silent.

rainbow_all_star_gameIn fact, Minneapolis is kicking some serious ass right now. Two new mega-expensive LRT lines are flowing through Minneapolis, and a third appears to be on the way. An iconic billion dollar football palace is rising out of the ground to replace the embarrassing  Metrodome. The metro area has the lowest unemployment of any metro area in the nation. Minnesota has the second lowest uninsured rate in the nation. The city’s population is growing, driven by a remarkable residential housing boom in the downtown area.  The Super Bowl, the most visible sporting event in America, is coming.  And baseball fans from around the world are watching professional baseball’s All Star Game in one of the best ballparks in the world, with a rainbow framing it, right here in our Minnie Apple.

The applause is happening organically. So turning on the flashing “Applause!” sign and publicly waving the mayoral pom poms in the midst of genuine, unprompted applause constitutes stepping on your own applause line.   Methinks we’re trying just a little too hard.

– Loveland

Note:  This post was also featured on MinnPost’s Blog Cabin.

One Headline GOP Gubers Won’t Chase

RantThe St. Paul Pioneer Press reported today that Republican gubernatorial candidates have been having daily one up-manship contests over who can have the earliest and nastiest news conference railing about a Dayton-related headline of the day.

Minimum wage adjustment! Pant, pant.  Sex offenders!!  Lather, lather.  Medtronic acquisition!!!  Podium pound, podium pound.

That’s their savvy strategy — cry “wolf” daily.  They read the morning news, race to the podium and rant.  In their (bulging) eyes, every Dayton-related development is an outrage, the next “-gate.”

That’s what passes for their policy agenda.  That’s the even keel leadership style they are showing voters.

But here is one headline the gunslingin’ gubers won’t be chasing today:

Minnesota adds 10,300 jobs in May; jobless rate lowest in 7 years

Kurt?  Jeff?  Scott? Marty?  Anyone?

– Loveland

True Confession: I Miss The GOP-Controlled Legislature

When it comes to the 2014 legislative elections, I have divided loyalties.

One the one hand, the current DFL-controlled Legislature has delivered a lot of very good things for ordinary Minnesotans.  Compared to the previous GOP-controlled Legislature, the DFL-controlled Legislature has delivered a healthier economy, budget surpluses, more tax fairness, marriage equality, job-creating infrastructure improvement projects, paid back schools, all-day kindergarten, early education scholarships and a long overdue increase in the minimum wage, among other things.

In the most recently concluded session, they even had the earliest adjournment in thirty years, a mark of impressive democratic efficiency. I look at that record and conclude that the DFL Legislature and Governor deserve to be rehired in the upcoming elections.

clown_carOn the other hand, as a blogger interested in the absurd side of politics, I’m pulled mightily in the opposite direction.  Because when it comes to generating a steady stream of blog-worthy absurdity, nothing beats the modern Tea Party-backed Republican Party.  After all, the last time the Republicans controlled the Minnesota Legislature they:

  • No Separation Between Church and Hate.  Found a way to make even the daily ecumenical prayer controversial and divisive;
  • Dehumanizing KidsWarned that supplying food stamps to Minnesota’s most vulnerable children is just as inadvisable as feeding wild animals; and

I get tears of joy just thinking about it. I was never in need of blog topics in those days.  Minnesota’s last GOP-controlled Legislature gave us the golden age of political comedy, and I will forever be grateful to them for that.   Memories, misty water-colored memories.

While a historically low 17% of Minnesotans approved of the GOP-controlled Legislature that was drummed out of office in 2012, Wry Wing Politics has sorely missed having the likes Mary Fransen, Steve Drazkowski,  Mark Buesgens, Tom Emmer, Curt Bills, Kurt Zellers, Dave Thompson, Amy Koch and others in positions of authority, where they had more opportunities to say and do ridiculous things.

The topic-hungry blogger in me pines for the hot mess of a Legislature that Teapublicans  built.  But deep down the responsible citizen in me knows that I need to vote to bring back the DFL’s brand of colorless competence.  Sigh.

– Loveland

Note:  This post was featured as a “best of the best” in MinnPost’s Blog Cabin.

What Does Ortman Really Think About Palin Endorsement?

Barack Obama’s favorable ratings have seen better days.  An average of polls compiled by Real Clear Politics (RCP) shows that an underwhelming 47% of Americans have a favorable view of the President.

This presents a challenge for incumbent Democratic U.S. Senator Al Franken, because Franken has been a supporter of the President’s efforts on health care reform, job creation packages, a minimum wage increase, ending the Middle East wars and other Obama initiatives.

So who does State Senator Julianne Ortman partner with to make her case to replace Franken?  Former Alaska Governor Sarah Palin, whose abysmal 37% favorability rating (RCP average of  recent polls) makes President Obama look like a rock star in comparison.

Palin, one of the Tea Party’s wackiest voices, laid it on thick for Senator Ortman:

“Let’s give voters a contrast this fall: a clown vs. a Mama Grizzly, an Obama 100 Percenter vs. a Blue Star Mom, a talker vs. a doer, and a liberal Obama rubber stamp legislator vs. a proven conservative fighter.”

While Senator Ortman said positive things about the Palin endorsement, her body language perhaps exposes more ambivalence.  This photo was featured on Governor Palin’s Facebook page.Palin_Ortman_birdFor the Republican primary, the Palin endorsement definitely helps Senator Ortman.  For the general election, the Palin endorsement is good news for Franken, not Ortman, because it frames the largely unknown Ortman up as a Palin-esque Tea Partier.

So, while I’m sure Senator Ortman’s bird escaped accidentally in this photo, you could hardly blame her if it didn’t.

The Daytonomics-Walkernomics Border Battle, MNsure and Our Addiction To Instant Analysis

Because journalists believe their audiences won’t tolerate nuance and ambiguity, they recruit  political analysts who are certain, clear and decisive over those who are unsure, equivocal and astraddle.  As a result, a kind of Punditry Darwinism plays out, where only the cocksure survive to deliver a steady stream of provocative instant analysis informed by little to no evidence.

MNsure’s Premature Death Proclamation

Take MNsure, Minnesota’s fledgling online tool for comparing and buying health insurance. When MNsure enrollment started slowly in its first month, Minnesota’s conservative talk radio pundits immediately declared it a train wreck, and this instant analysis has dominated the coverage to date.

MNsure may ultimately be a train wreck.  After all, covering uninsured Americans has always been a very difficult task.  But the immediate post-launch period is not a sensible time to make that judgment.

Romneycare_enrollment_chart-2Historical data shows that consumers don’t tend to purchase health insurance the way they purchase Xbox 360s, lined up outside the store on launch day.  Quite the opposite, most consumers purchase insurance at the very last moment possible.  Purchasing an expensive service that you hope to never use is just not very satisfying, so most of us procrastinate.

I’m not pulling this assertion out of my pundit posterior.   In Massachusetts, just 123 early adapters stepped forward during their first month, and it didn’t get much better the second month.  Instead, the big rush came just prior to the open enrollment deadline, when people face the prospect of a missed deadline and financial penalty.

It turns out that pulling the plug on the Massachusetts exchange when it only had 123 customers would not have been a wise decision for Commonwealth citizens, because  Romneycare ultimately was worth the wait.  After a few years of growing pains, Massachusetts’ Obamacare-like reforms increased the ranks of the insured to 97%.  This puts states like Minnesota (91% insured) to shame, not to mention Chris Christie’s New Jersey (84% insured) or Ted Cruz’s Texas (76% insured).

Declaring a trainwreck just as a new train is lurching out of the depot is ludicrous.  As much as it pains the cognoscenti, at this stage they need to be saying the four little words that might  get them deleted out of reporters’ speed dials – “I don’t know yet.”

Daytonomics The Winner Already?

Then there is the Minnesota-Wiscoonsin border battle over state fiscal policy.  In a New York Times commentary piece that has been widely shared via social media, a University of Minnesota professor and pundit recently declared that Minnesota Governor Mark Dayton’s Keynesian approach to state fiscal policy has been more successful than Wisconsin Governor Scott Walker’s austerity approach.  His conclusion:

“The lesson from the upper Midwest is that rigid anti-tax dogma fails to deliver a convincing optimistic vision that widens economic opportunity and security.”

To his credit, the University of Minnesota professor does include  caveats, such as “firm answers will require more time and more data.”  But in the rush to be a clear and certain pundit who can get past the New York Times gatekeepers, the professor ultimately declared Daytononomics triumphant.

Here’s the problem with that:  Daytonomics is very much in its infancy.  Most of Governor Dayton’s most progressive policies are only now being put into effect, so the state of Minnesota’s economy can’t yet be attributed to the Daytonomics.

It’s true that Dayton has been in office for three years now.  But, with the exception of Dayton’s expansion of Medicaid to 95,000 uninsured Minnesotans, the lion’s share of his progressive agenda — the improvements to education and other government services funded by tax increases on the wealthy — passed just a few months ago, after the 2011-2012 GOP-controlled Legislature was vanquished and could no longer block Dayton’s progressive policies.

Just as President Obama could not be fairly blamed for the 2008-2009 economic meltdown that played out before he could put his policies into place, Governor Dayton cannot be fairly celebrated for a better-than-average state economy when most of his progressive policies are only now being put into place.  As a liberal, I hope Daytonomics bests Walkernomics, and expect it will.  But it’s much too early to declare a winner.

As a public relations guy, I understand why the media wants  commentators who give their audience instant gratification through instant analysis.  But as a citizen, I worry about what all of this instant gratification does to us.

Psychologists find that children who can’t learn to delay gratification at an early age are much less likely to succeed in later life.  The research indicates that the ability to delay gratification is absolutely key for success in school, marriages, friendships, health and jobs.  The young kids who can’t learn to stop themselves from consuming marshmallows become the adults who can’t stop themselves from consuming the adult versions of marshmallows.

Given that research, what kind of democracy will we become if journalists, pundits and voters can’t learn to wait to make policy judgements until evidence is available to inform our debates?

– Loveland

Note:  This post was also featured in MinnPost and Politics in Minnesota’s Best of the Blogs.

Paulsen and Kline Finally Support A Jobs Bill

Erik_Paulsen_John_KlineIn the past, I’ve been critical of Minnesota Republican  Congressmen John Kline and Erik Paulsen for not doing enough to address America’s chronic unemployment problem.  But I have to hand it to them, because yesterday they passed legislation ending the government shutdown that will immediately put 800,000 Americans back to work, and stabilize the economic position of many others.  That’s fantastic news.

Unfortunately, Paulsen and Kline haven’t always been so strong supporting job creation for Americans.  They both refused to support President Obama’s 2009 American Recovery and Reinvestment Act that, according to the independent, non-partisan organization FactCheck.org, created a whole lot of jobs:

“…the nonpartisan Congressional Budget Office released a report in August that said the stimulus bill has “[l]owered the unemployment rate by between 0.7 percentage points and 1.8 percentage points” and “[i]ncreased the number of people employed by between 1.4 million and 3.3 million.”

Simply put, more people would be unemployed if not for the stimulus bill. The exact number of jobs created and saved is difficult to estimate, but nonpartisan economists say there’s no doubt that the number is positive.”

Paulsen and Kline have also refused to support pending legislation proposed by President Obama, the American Jobs Act, that, according to private sector experts, would stimulate millions of more jobs:

Moody’s Analytics Chief Economist Mark Zandi: “The fiscal boost from the jobs package next year would be larger than in the first year of the 2009 economic stimulus, said Mark Zandi, chief economist at Moody’s Analytics Inc. Zandi, who was briefed on the plan before the president’s speech, forecast passage of the entire jobs package would add 2 percentage points to economic growth next year and bring down the unemployment rate by 1 percentage point compared with current policy, under which a temporary payroll tax cut and an extended unemployment benefits both expire Dec. 31.”

This morning Economic Forecasting FirmMacroeconomic Advisers issued a report: “We estimate that the American Jobs Act (AJA), if enacted, would give a significant boost to GDP and employment over the near-term. The various tax cuts aimed at raising workers’ after-tax income and encouraging hiring and investing, combined with the spending increases aimed at maintaining state & local employment and funding infrastructure modernization, would: Boost the level of GDP by 1.3% by the end of 2012, and by 0.2% by the end of 2013. Raise nonfarm establishment employment by 1.3 million by the end of 2012 and 0.8 million by the end of 2013, relative to the baseline.”

…Citigroup Chairman Richard Parsons said, “The President’s proposed combination of personal and business tax relief, targeted spending to support infrastructure, and aid to states offers several direct and innovative ways of creating jobs and bolstering our economy. The President’s focus on assisting small business is spot on, since small business is the engine of job creation.”

Finally, Paulsen and Kline have refused to support legislation to end the “sequester” of billions of dollars federal funds.  CBO economists say lifting these spending cuts would immediately add millions more jobs for the American people.

The nonpartisan Congressional Budget Office on Thursday estimated that keeping the spending cuts from sequestration in place through fiscal 2014 would cost up to 1.6 million jobs.

Canceling the cuts, on the other hand, would yield between 300,000 to 1.6 million new jobs, with the most likely outcome being the addition of 900,000, the CBO said.

“Those changes would increase the level of real (inflation-adjusted) gross domestic product (GDP) by 0.7 percent and increase the level of employment by 0.9 million in the third quarter of calendar year 2014 (the end of fiscal year 2014) relative to the levels projected under current law,” the report states.

Again, these are the job creation bills that Kline and Paulsen have historically refused to support.

But I do want to give credit where credit is due.  The bipartisan legislation Paulsen and Kline supported yesterday will immediately put 800,000 more Americans back to work, and end a government shutdown that will have cost taxpayers, according to Standard and Poors, about $24 billion.  That’s $24 billion that isn’t circulating in the economy creating jobs.

Forget that Kline and Paulsen originally did nothing to speak out against their fellow House Republicans who were giddy in forcing these 800,000 Americans out of work.  At long last, Paulsen and Kline have supported a jobs bill.  Here’s hoping it’s the beginning of a trend.

– Loveland

Note:  This post also was featured in Minnpost’s Blog Cabin.