Capitol View: July 30, 2010 Archive

PoliGraph: Dayton tax claim on the high end

Posted at 12:00 PM on July 30, 2010 by Catharine Richert
Filed under: Campaign 2010, Campaign 2010: Minnesota Governor, PoliGraph

To reduce the state's nearly $6 billion projected deficit, DFL candidates for governor are touting plans to cut spending and increase taxes.

Among them is former U.S. Sen. Mark Dayton who wants to bring the state more revenue by increasing taxes on the richest Minnesotans.

"I'll raise $4 billion from making the richest 10 percent of the people in Minnesota pay their fair share of taxes," Dayton said July 22, 2010 during a debate with his opponents on MPR's Midmorning program.

Dayton's projection is within range, but likely on the high end.

The Evidence

Before digging into Dayton's claim, it's important to note that there's disagreement over who the richest Minnesotans really are. Dayton says they're those in the top 10 percent of earners - or households making more than $136,955 annually. His DFL opponents claim his plan will hit the middle class hardest, and have proposed increasing taxes on people who earn more than $250,000 a year.

Most Minnesota households make less than $136,955. On average, they give about 12.5 percent of their income to the state, what Dayton regularly refers to as a "fair share" of taxes.

According to projections for 2011, those in the top 10 percent of earners give the state about 10.1 percent of their income. Dayton will increase the tax rate on these earners to 12.5 percent as well, which would bring in about $3.8 billion more each biennium.

What about that extra $200 million?

"Mark has said consistently that his aim is to make taxes slightly progressive," Dayton policy director Brian Klaas wrote in an e-mail. "That would account for the difference."

Back in December of 2009, Minnesota Department of Revenue tax research director Paul Wilson, told Minnesota Public Radio's Tom Scheck that Dayton's plan would likely bring in less than projected because Dayton based his analysis on the state's expected tax revenue in 2011. A more accurate benchmark are tax year 2006 numbers, which means Dayton's plan would bring in somewhere between $3.4 and $3.8 billion.

Tim Taylor, who edits the Journal of Economic Perspectives based at Macalester College, says Dayton's plan is reasonable. But he explained that increasing taxes on the wealthiest rarely brings in as much revenue as expected.

"Wealthy people have a lot of options," such as moving to another state when taxes get higher, Taylor said. "It's not that everyone does all these things. But enough people do some of them to make a difference."

The Verdict

Dayton's tax plan would bring the state billions more in revenue. But $4 billion may be wishful thinking. His claim is inconclusive.

Sources

Minnesota Public Radio News, Midmorning, July 20, 2010

The Minnesota Department of Revenue, 2009 Minnesota Tax Incidence Study, accessed May 12, 2010

Minnesota Public Radio News, Tom Scheck interview with Minnesota Department of
Revenue Tax Research Director Paul Wilson, accessed July 29, 2010

Minnesota Public Radio News, Fact check: Mark Dayton wants to tax the rich but how much?, by Tom Scheck, Dec. 8, 2009

Interview, Tim Taylor, Managing Editor of the Journal of Economic Perspectives, July 29, 2010

Interview, Brian Klaas, policy director, Mark Dayton, July 28, 2010

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The Humphrey Institute

Rangel gave to Democrats in Minnesota

Posted at 10:45 AM on July 30, 2010 by Tom Scheck (1 Comments)
Filed under: Campaign 2010, Campaign 2010: U.S. House

New York Congressman Charlie Rangel, who faces an ethics trial in the coming months, has given $92 thousand to Minnesota Democrats through his campaign for Congress or his National Leadership PAC since 2000.

DFL Rep. Tim Walz received $21,000 from Rangel's campaign and PAC in 2006, 2007 and 2008.

Richard Carlbom, with Walz for Congress, says Walz gave the $21,000 to several Minnesota based veterans charities earlier this year.

DFL Rep. Keith Ellison received $7,000 in 2006 from Rangel's leadership PAC.

DFL Rep. Betty McCollum received $5,000 in 2000 from Rangel's leadership PAC. Update: McCollum's political director, Will Blauvelt sent along this statement:

"Rep. McCollum has received no contribution from Mr. Rangel's political committees since serving in Congress. Campaign contributions received a decade ago were spent during the 2000 election."

DFL Sen. Al Franken received $10,000 from Rangel's leadership PAC. Update: Casey Aden-Wansbury, A spokeswoman for Sen. Franken, issued this statement:

"All donations made during the 2008 campaign cycle were spent in that cycle. Going forward, Senator Franken will not take money from Mr. Rangel or anyone else who is the subject of an Ethics Committee trial."

DFLer Ashwin Madia, who lost to Republican Erik Paulsen in 2008, received $49,538 from three different funds tied to Rangel.

Madia's campaign fund is now closed.

I contacted officials representing Ellison, McCollum and Franken to see if they plan to do anything with the money but haven't yet received a response.

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Entenza mocks Pawlenty's travel

Posted at 10:53 AM on July 30, 2010 by Tom Scheck (1 Comments)
Filed under: Campaign 2010, Campaign 2010: Minnesota Governor

Democratic gubernatorial hopeful Matt Entenza mocks Republican Gov. Tim Pawlenty's travel in a new web video that was sent to supporters. In it, Entenza says "It's 10 o'clock, do you know where your governor is?"

He goes on to say that he wants to be "your governor" and adds he was elected president...

...of his college.

All of the DFL candidates for governor are openly criticizing Pawlenty in campaign videos, TV ads and during debates. It will be interesting to see whether the eventual DFL nominee keeps up the attack when he/she is talking to independent minded voters.

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Democrats prepare for Mankato debate

Posted at 2:12 PM on July 30, 2010 by Tom Scheck
Filed under: Campaign 2010, Campaign 2010: Minnesota Governor

Democrats Margaret Anderson Kelliher, Mark Dayton and Matt Entenza are scheduled to take part in a gubernatorial debate tonight at 7pm at Ostrander Auditorium at Minnesota State University in Mankato.

The event is free and open to the public.

Can't get there? Don't worry, MPR News will rebroadcast the debate at 2pm Saturday. We also intend to put the debate audio on the blog.