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1) Policy Focus: Tax Reform Commission must focus on economics
2) The David Strom Show
3) Sign up for our Action eLists and get a free pocket US Constitution!
4) State Budget needs reform, not New Gimmicks and Fees
5) Road and Bridge Maintenance: Go for the Bronze
1) Policy Focus: Tax Reform Commission must focus on economics
Oh oh. Finance and Commerce quotes the newly appointed chair of Gov. Tim Pawlenty's 21st Century Tax Reform Commission boldly predicting that recommendations from the commission will position Minnesota to be "a leader in the global economy."
In a statement released following the governor's press conference announcing the commission Vekich said the 15-member commission includes "an impressive and diverse group of experts who are up to the task of recommending a tax system that supports Minnesota's economic vitality."
Work "health care" into those statements and you have rhetoric that sounds a lot like the process followed by the Governor's Health Care Transformation Tax Force, which produced a complex mish-mash of doctor-patient behavior modification and a framework for health care rationing masquerading as cost-cutting.
While we agree that Minnesota's tax system "could be improved to better support business development and investment, job growth, income generation, entrepreneurial activity, research activities and exports," as outlined in the governor's executive order creating the commission, the path to those ends is not found in "creating" a tax system, but by eliminating inefficient taxation and the associated complexities in complying with tax law.
Ignoring economic theory and realities with the intent to mold a tax system that produces specific benefits to specific segments of society, even well-intention outcomes, is more apt to be rife with unintended consequences than it is, ultimately, to produce desired or desirous results. Let's hope the Tax Reform Commission brushes up on Econ 101 before it turns itself into an advanced seminar in political science.
2) The David Strom Show
The David Strom Show sponsored by the Minnesota Free Market Institute is broadcast weekly on AM 1280 The Patriot Saturdays 9-11 A.M. Podcasts of the showare available at Townhall.com and also directly via iTunes. (See our radio show pagefor details). The show is now downloaded over 11,000 times a month!
On 5/10 Guest Hosts Craig Westover and Margaret Martin interviewed Rep. Tom Hackbarth (R-Cedar) about the 3/8 cent sales tax increase amendment and the windup of the state legislative session. In the second hour, Margaret and Craig interviewed Don Eberly, author of The Rise of Global Civil Society:Building Communities and Nations from the Bottom Up. For newsmaker and highlights audio clips of the the 5/10 show go here. For commercial-free show podcast downloads visit the show page at townhall.com or subscribe via iTunes. To find out ahead of time who the guests on the show will be, sign up for our action eList and check the RADIO box. (one email per week).
3) Sign up for our Action eLists and get a free pocket US Constitution!
Visit http://www.minnesotafreemarkets.org/ and click Join! on the toolbar to sign up for one of our elists. Everyone with a mailing address in our database by May 31 will get a free copy of the Cato Pocket Constitution and Declaration of Independence mailed to that address.
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4) State Budget needs reform, not New Gimmicks and Fees
On Gov. Tim Pawlenty's list of concerns with DFL budget proposals is the proposal to raise the motor vehicle transfer fee from $10 to $20, which would bring in $10 million. This is a prime example of the type of taxing policy that grinds our gears - a "fee" increase with no relationship between the fee and the service and the value provided. In the first place, why should the state charge an individual for conducting a private transaction? Next question, what justifies a $10 fee as the appropriate amount to charge? Finally, what additional value or service is the individual going to receive for a $20 fee? This is arbitrary taxation at its worst.
To give the devil his due, so to speak, the DFL also wants to freeze spending on "Q-comp," a voluntary "pay for performance" plan for teachers, one of Gov. Pawlenty's pet projects. Good idea. Although Q-comp was originally designed as as "pay for performance," by the time it was enacted, it ended up altogether differently. The "performance" metric being paid for is not "student performance." Generally less than 10 percent of Q-comp money paid to schools and school districts rewards teachers for improved student performance. The balance is used to create under a variety of names "mentor teacher" positions. These teachers evaluate, critique and mentor other teachers, the hope being that students ultimately benefit. The Q-comp focus is wrong; it's simply another program feeding the system instead of nourishing student education.
5) Road and Bridge Maintenance: Go for the Bronze
To gain some perspective on Gov. Tim Pawlenty's 21st Century Tax Reform Commission, Minnesota Free Market Institute senior policy fellow Craig Westover was researching the 1983 Tax Commission appointed by Gov. Rudy Perpich. Among the documents in a file at the Minnesota Historical Society, Westover ran across an article from the July 7, 1983 "Minneapolis Star and Tribune" that provides "quote of the week" material.
The controversies de jour when Perpich formed his tax commission were his desire to remove a 10 percent income tax surcharge a year ahead of schedule and transferring $80 million in revenues from the motor vehicle excise tax from the general fund to the highway construction fund to bolster highway repair and maintenance.
Perpich's proposals faced some pushback from his fellow DFLers in the senate led by majority leader Roger Moe. Moe and the DFL majority were clamoring for property tax relief, not income tax relief or highway fund increases (sound familiar?). In response to a question about priorities, the Star and Tribune quotes Moe as saying moving motor vehicle tax revenue out of the general fund to the highway fund would be "a far distant third - it just doesn't compare as a priority."
Beam, speck, eye and all that.
The Minnesota Free Market Institute conducts research and advocates for policy that limits government involvement in individual affairs and promotes competition and consumer choice. By analyzing the actions of the past and applying the enduring lessons of the free market, the Minnesota Free Market Institute creates policy options for the future. The Minnesota Free Market Institute accepts PayPal! To donate click here.
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