Growth & Justice Blog

A different tone in this year's tax committee hearings, and a clear consensus for more and fairer revenue

I've heard infinite versions of "don't tax me''  or "taxing me or my customers more will destroy my business AND the economy'' in my decades under the dome.   And last week's opposition at a House hearing to ending sales tax exemptions on business services was typical in many respects.   Just because these fears often turn out unfounded _ our economy was performing better, in the 1990s,  when taxes were higher  _ doesn't mean these specific concerns shouldn't be heeded.   

But I don't recall ever hearing as many tax opponents acknowledge, as they made their sincere case against losing tax exemptions on their own business, that our communities do need more revenue for public investment and for dealing with demographic challenges.    Time after time I heard these business owners or their association leaders, who are also citizens,  say that they supported or understood the need for more revenue, just "please, not on me or my customers, this time.''  And when all the opponents got through testifying, alternating one-for-one with those who favored the governor's plan, there were still more testifiers left who favored the reasonable increases in Dayton's plan, and the badly needed investments on the budget side, from early childhood education to transportation to workforce training.   I didn't hear nearly as many angry diatribes against government and taxes in general as I've heard in previous years.

That consensus for more revenue comes through in the Star Tribune's Sunday poll, showing  once again that a majority favor restoring higher income tax rates on the highest income margins, while opinion is evely divided on expanding the sales tax base to more consumer services.   A clear majority opposes ending the exemptions for so-called "business-to-business'' services.

This consensus for "reasonably more'' actually is not new.   Polls show support for revenue sufficiency was strong all through the 12 years of rule by one governor whose slogan was  "give it all back'' and another whose central theme was "no new taxes,'' and  legislative majorities that took the same hard and uncompromising line in 2011-2012.   Especially after budget crises began recurring regularly in 2001 and beyond, polls consistently showed that most Minnesotans thought revenue increases ought to be at least part of the solution for budget shortfalls.  That happened also to be the position of almost all former governors in all three parties through that period.    And in almost every reputable poll I've seen, most Minnesotans think those who have been reaping almost all the benefits of increased productivity in recent years, and who have been paying a smaller percentage of their big increases  in state-local taxes, ought to contribute reasonably more.

 

Dane Smith   

 

 

A week for reflection and commitment to justice and broader prosperity (and yes, taxes and public investments help do that)

We have this week a confluence of events that ought to lift our hopes and sharpen our resolve to reduce racial and economic inequality in our state and nation,  and to build a more inclusive prosperity.

The hope comes from the momentous coincidence today of Martin Luther King's official birthday observance and a re-inauguration, after a convincing re-election,  of the first African-American president of the United States.    Michelle Obama, a descendant of slaves, is the First Lady of a White House that once was occupied by white slave-holders, and actually built by slaves.   This is a remarkable country, capable of extraordinary self-correction, powerful and wealthy because it is governed by its own people, and stronger yet when ALL its people are empowered.  We can  expect President Obama will build on the theme in his inauguration speech that we all do better when we ALL do better.    While the Obamas have succeeded spectacularly, far too many people of color are still left behind, and economic disparities continue to grow between top incomes and families of all races in the middle-income brackets.

In Minnesota, attention swivels on Tuesday to the release of both a two-year state budget proposal and a major tax system overhual from Gov. Mark Dayton.    Minnesota's prosperity rests on an innovative business leadership, to be sure, but also on a  foundation of public investment, in the form of high-quality public education,  physical public works infrastructure, public health and natural resource protection.   We need to invest more and more effectively in those things, including early childhood education and post-secondary training,  and Gov. Dayton can be expected to emphasize that this broader prosperity and better government is the end we seek, while taxes merely are one of the  means.   Minnesotans understand these fundamentals and have long been distinguished by a commitment to public good, as well as private gain.   Let's try to keep this in our heads as we all get ready to argue over the details.

Dane Smith

 

 

Voters want the reasonable middle ground

Elections can be a surprise, and this latest was for me, on both the national and state level, a very pleasant surprise. I've been weary of the "devil take the hindmost" style of political brinkmanship that seems to have become commonplace in Washington and at the State Capitol. I don't care who's to blame, or even that everyone or no one is to blame. I just want a group of legislators willing and able to identify the plights of the people -- all the people -- and addressing them with creative, nonpartisan solutions that are effective and cost efficient.

One thing our recent elections show is that the voting public, as an electorate, is only several degrees on either side of middle ground. And, our votes will swing in favor of one party or the other based on how far the party in power has strayed from the middle. We are not against government, but only ineffective, inefficient government that wastes tax dollars. We are not against regulation, but want regulations that are patently fair, reasonable, non-discriminatory and not arbitrary. And, we are not at all against taxes, but only taxes that burden us without adequate demonstration that our tax dollars are being spent efficiently for the good of all.

The clear message to politicians everywhere is that they don't stray too far from the middle. The people want government and expenditures focused on things that matter to the mainstream, and that both improve lives and make it easier to live, work and play in their own communities. Our newly elected political leaders should be thinking long and hard about that, and less or not at all about sticking it to the other political parties for paritsan gain.

--David F. Fisher

(Note: David F. Fisher is a new member of the Growth & Justice Board of Directors, and is Executive Director of the Corporate Institute at the University of Minnesota Law School. He was commissioner of the Minnesota Department of Administration under Independence Party Gov. Jesse Ventura.)

"Minnesota's Miracle" can inform a new generation

Policy enthusiasts and history buffs will enjoy "Minnesota's Miracle: Learning from the Government That Worked." It's a gem of a book on 1970s legislative policy-making, and Minnesota's golden age of bipartisan problem-solving, progressive reform, public investment and innovation. The writing, by Tom Berg, a former legislator and a strong Minnesota community leader on many fronts since then, is both careful and lively, sprinkled with delightful anecdotes such as the triumph of pioneering women legislators in gaining entry and membership in the once all-male St. Paul Athletic Club. For my money, the heart of the book is the chapter "Breakout Session," between pages 79 and 112, which contains an inspiring summary of lasting reform legislation that protected the environment, expanded access to education, and improved housing and metropolitan governance. Younger citizens in particular need to know this history, to know what is possible and to keep hope alive for constructive resolution of the demographic and economic challenges we face 40 years later. The book launch and celebration is set for 4 p.m. Tuesday evening at the Cowles Auditorium and the Hubert H. Humphrey Center.

--Dane Smith 

 

 

Recommended Reading: Ember Reichgott Junge on charter schools, and John Watson Milton on Senate Majority Leader Nick Coleman Sr.

For lovers of Minnesota, for history buffs and for students and practitioners of public policy, I highly recommend two outstanding books released this week.

One is Zero Chance of Passage: The Pioneering Charter School Story, by former state Sen. Ember Reichgott Junge, a state leader in education, human services, and governmental redesign and a primary champion of the school-choice and charter school movement of the 1980s and 1990s. Reichgott Junge skillfully weaves the story of emerging education innovation in Minnesota, from the influence of union leader Albert Shanker, through Gov. Rudy Perpich's bold effort to push through public-school choice, to her own championing of the fights for postsecondary options and finally, Minnesota's emergence as the leading model state in the charter school movement. Controversy still surrounds charter schools, but they are here to stay, and I'm personally glad that this option was available when my own daughter sought an alternative to her big public high school a few years ago. (If you buy the book online between 2 p.m. and 3 p.m. on May 9, Ember tells me, there's a chance amazon.com will help with promotion.)

The other is For the Good of the Order: Nick Coleman and the High Tide of Liberal Politics in Minnesota, 1971-81 by former state Sen. John Watson Milton, who served with Majority Leader Coleman in a heyday of progressive reform. This golden decade, in which Coleman arguably had more influence than any other leader, stretched from the Minnesota Miracle and greater state responsibility for education funding and quality, to putting teeth in civil rights legislation and expanding the rights of women and minorities and gays and lesbians, to campaign finance reform, to environmental cleanups, to progressive tax overhauls. As former Vice President Walter F. Mondale writes in the foreword: "In many ways, [Coleman] and Roger Moe, his successor as Senate majority leader, were more important than many governors we've had--lasting longer, creating a revolution, and elevating the legislative branch to an equal footing with the executive...Nick Coleman was one of the brightest and most effective people in public office I've ever known.''

Both books will serve as reference works for years to come. And they are a reminder of what's possible in our political process, and an inspiration for future stewards of our state government.

Dane Smith

Teddy Roosevelt's Progressive Speech on Lincoln's Birthday

On Abraham Lincoln's birthday (Feb. 12, 1809) in 1913, beloved former President Teddy Roosevelt delivered one of the great speeches in American history, a ringing declaration for a more expansive democracy and government, one that helped its own people succeed and did much more than protect the property of its wealthiest citizens.

As the party that once was Roosevelt's searches for its soul – and increasingly is wrenched toward de-legitimizing government and democracy itself – this is a time to reflect on the equality and humanism advanced by those two great Republican presidents on Mt. Rushmore. (Voters in Minnesota, distinctively progressive from statehood on, voted overwhelmingly for Abe and Tedddy, and Minnesota was one of only six states Roosevelt carried under his new banner in the 1912 election.)

At this point in history, Roosevelt was no longer president and had broken with conservatives in his own party who were opposed to his many progressive reforms, ranging from the progressive income tax to worker protections to food-and-safety regulation. In this speech at the Hotel Astor in New York City, Roosevelt reminded his audience that Lincoln was not a conservative but a radical equalizer who fought a war for human rights over property rights, and who once said that "labor is the superior of capital" and that "we are for the man before the dollar." 

In his opening words, Roosevelt explained that the new Progressive Party was "a manifestation of the eternal forces of human growth, a manifestation of the God-given impulse implanted in mankind to make a better race and a better earth." And then he uttered these words, which I highly recommend for moderates and progressives today who search for inspiration in the fight against those who seek to return our nation to 19th Century rugged individualism.

We recognize that property has its rights; but they are only incident to, they come second to, the rights of humanity. We hold that the resources of the earth were placed here for the use of man in the mass, that they are to be developed for the common welfare of all, that they are not to be seized by a few for the purpose of oppression of the many, or even with disregard for the rights of the many. Yet we earnestly believe and insist that our policy, so far from being detrimental to property or to business, will be for the good of property and business, because our policy is to put both property and business in their proper relations with humanity.

At the close of the speech, Roosevelt called on Americans to "make this nation a real democracy; an economic as well as political democracy free from every taint of either sectional or sectarian hatred… a democracy of true brotherhood... a democracy which stands for each individual's performance of his own duty toward others even more than for his insistence upon his rights as against others.''

The two Roosevelt presidents, Republican Theodore and his even more influential Democratic fifth cousin, Franklin D., helped transform the United States over the last century in to a fairer and more civilized nation, and one that grew ever more powerful and rich as a result of that fairness and greater equality of opportunity and result.

Lincoln and the Roosevelts believed what most Americans actually still believe, that their own governments have a proper and fundamental role in improving their lives and providing fairness and greater equality of opportunity, and that this is good for business and profits in the long run. Or in the words of many of today's leading economists, equity is the superior growth model.

Dane Smith