The Assertion: Minnesota leaders should reject tax increases of any kind to balance the budget.

Gov. Mark Dayton continues to hold firm on his income tax increase while Republicans controlling the state legislature argue that raising taxes would kill job creation.

Now the deadlock must be debated and answered, since the state budget deadline is just four weeks away... and the leadership must fill a $5 billion hole in the budget for the coming fiscal period.

We begin our debate at Insight Now on this topic. We urge you to join in with your own insights and experiences.

Monday - Opening statements

Pro:

Charlie Weaver – Executive Director, Minnesota Business Partnership
While I always welcome the opportunity to debate Minnesota’s economic competitiveness, I doubt little of what will be argued here will change many minds. In fact, while we take the next week – and Governor Dayton and state legislators take the next month – to argue the merits of raising taxes, the overwhelming majority of U.S. governors (of both political parties) and our primary global economic competitors have already decided the question. Nearly every country in the world and state in the nation is moving towards lowering taxes and spending less in order to attract jobs. Minnesota must do the same if we hope to grow jobs in the future and compete in the 21st century.

Minnesota has always been known as a high tax state, but the tax burden borne by business and individuals wasn’t nearly the hindrance to jobs and innovation that it is today. In the 21st century, when borders no longer constrain economic activity, labor, capital and intellectual property have more freedom to travel the globe than at any time in our history. Relying on what may have worked in the 1970s – when neighboring states were our primary economic competitors – will simply not work today.

These economic realities mean our state needs to fundamentally change the way we think about and fund state government. In order to address the near-term budget challenges state lawmakers face, the Minnesota Business Partnership has outlined three principles for reform that we believe will lead to sustained economic growth and long term budget stability.

Key points:
1) The state should foster private-sector investment and job creation, reduce tax revenue volatility and strengthen our global competitiveness.
2) State budget reforms should sharpen the focus on priorities, encourage fiscal restraint, improve service delivery and produce desired results.
3) Through public-private partnerships, Minnesota employers can support structural reforms and enhance public-sector programs.

While asking state government to live within its means should now be considered the “new normal” for government operations, holding the line on taxes isn’t the right thing to do simply because everyone else is doing it.

As the bipartisan Budget Trends Commission report pointed out, even if the state were to raise significant additional revenue in the form of new taxes or expanding existing taxes to pay for state programs, this new revenue would only be a short term fix because tax revenue is growing more slowly than the fastest growing spending areas.

For decades, Minnesota has been a national leader in dozens of quality-of-life categories. And while we still rank high in many of the most important factors that make our state a great place to live, work and raise a family, other states – and developing nations – are quickly catching up. Not because we are failing, but because we have been slow to adapt to new economic realities.

The choice is clear: The state should not raise taxes to balance the budget shortfall.

Monday - Opening statements

Con:

Nan Madden - Director, Minnesota Budget Project
This is a debate about more than taxes. It’s about how to meet Minnesota’s needs in a time of economic crisis. It’s about how to make sure we can make the most of prosperity when it returns and create good jobs.

The worst national recession of a lifetime and its aftermath have taken a toll on Minnesotans. People lost their jobs and in many cases their health coverage. As happened across the nation, Minnesota suffered an unprecedented collapse in state revenues at the same time that public needs have grown. Like in most other states, we face a challenge of how we meet our needs and invest in our future.

In times like these, Minnesotans work together to help ourselves and our neighbors get through tough times, and make wise decisions to ensure a brighter future.

Raising taxes is one of those wise decisions because the alternative – relying solely on cuts in services – is so damaging.

We’re past the point of either/or solutions. Minnesota should join the majority of states that responded to the economic downturn with a balanced approach that included raising revenues instead of just cutting services. They made cuts but recognized this is too big a crisis to solve by any single strategy. A balanced approach prevents even deeper cuts in education, public safety, health care, job training, assistance for the elderly and disabled, and other services that Minnesotans need. A balanced approach allows us to invest in the building blocks of a strong economy: infrastructure, a quality workforce and healthy and safe communities.

Key points:
1. A cuts-only approach threatens our state’s future. To compete in tomorrow’s economy, Minnesota needs many more workers with higher education degrees and strong credentials. A cuts-only approach dramatically reduces opportunities at state colleges and universities, impeding our ability to build that future workforce.
2. A cuts-only approach inflicts too much pain today, and puts barriers in our path to economic recovery. One example -- reducing the training that helps jobless workers get the skills to access jobs available in their communities and ensure that employers have the workers they need to grow.
3. A balanced approach provides an opportunity to improve our tax system so it is adequate to fund our state’s needs and is based more on ability to pay than it is now. Today, the wealthiest Minnesotans pay a smaller share of their household incomes in state and local taxes than everyone else.
4. A balanced approach is open and honest. Costs will rise for Minnesotans one way or another – through increases in fees, tuition and local property taxes, or through transparently arrived at state tax increases that can be carefully crafted and their impact understood. Past experience shows us that it isn’t a matter of if we will raise revenues, but instead how.

You can’t build a house with just a saw and you can’t build prosperity in tough times by only making cuts. A balanced approach that includes revenues is right for Minnesota’s future.

Everyone is interested in improving Minnesota's overall economy, that is why I agree with DR. TOM STINSON, Minnesota's neutral, non-partisan, official state economist, that pursuing a BALANCED APPROACH of spending cuts AND some tax increases is marginally better for our recovery. Moreover, by pursuing a balanced approach we can ensure that the elderly and the disabled receive the services they need to maintain their dignity and independence and we can avoid a regressive increase in property taxes.

http://www.minnpost.com/stories/2011/03/10/26506/why_the_latest_budget_forecast_seems_to_boost_both_dfl_and_gop_legislators_arguments

Mr. Weaver, just because we are not likely to change any minds we should not bother discussing this? I think not. I agree with you that the positions taken by our legislature are so dug in that we definitely will not change any of their minds.

The conservatives have stated that they intent to save the entire shortfall by cutting. That is not acceptable.

The Governor has proposed a fairly balanced budget that has cuts and raises taxes on the wealthiest Minnesotans. As we have discussed in previous forums, there are a number of options when it comes to sales taxes.

Tim Pawlenty's approach has almost bankrupted the state. His game of 'no new taxes' while raising just about every fee in the state along with a very large property tax hike along with accounting shifts was a disaster.

More of the same from a dug in right wing legislature is not acceptable. I have heard Amy Koch in several MPR discussions and do not agree with her positions.

Talk of making government 'more efficient' makes for a nice sound bite while there is no realistic proposal as to how this is to be done. 'More efficient' is not the same as cutting health and human services.

I'll leave at this for now, I am sure there will be plenty to chew on as this discussion develops.

I guess we are stuck here with the two well told stories based on the same long accepted fallacies. Govt can create jobs and govt can reduce suffering. Every job we create by subsidy (either through direct subsidy or by not taxing at the level needed to offset govt spending) is just a mirage, there is no economic transaction that creates that job. Subsidize a widget manufacturer so he opens a factory in Minnesota to create jobs, those are jobs lost in Wisconsin where he would have opened it. You also push up labor rates for other employers and quietly sink them. The market knows when and where a widget manufacturer is needed, the central planners do not.

We have been redistributing income agressively for 80 years in this country and we have done nothing to eliminate poverty, misfortune and suffering. We just temporarily determine winners and losers and say that our decision is just based on some unknowable criteria.

It is the market, enterprise, the search for profit, efficiency and answers that has created every real job, helped raise our collective standard of living and free us from 18 hour a day work and hand to mouth living (as a norm). Government subsidies of business or individuals is just a horribly inefficient treatment of symptoms. I recognize that my anarchists dreams are not going to be a reality anytime soon but just as kids with sand shovels and pail and the Army Corps of engineers with bulldozers and levees have failed to control the ocean so our states fail to control the economy. Best case scenario provide consistency. Don't run amok, increasing malinvestment. Pick a number for govt spending, 10% of sales in the state - whatever - and stay there. Some days will be hard but they will get better a whole lot sooner.

The tax seesaw must be examined as part of a wider look at our economic future.

During times of plenty, if we dare to run a surplus, we rush to lower tax rates and/or to send rebate checks (e.g., under Ventura), and/or we ramp up spending on anything and everything, certain that we will be able to live on the lowered tax rates, certain we will be able to support our spendthrift ways forever.

Then we get a recession, and we fight over which now-indispensable programs to cut. And we raise taxes at precisely the wrong time, the time when people need their own money the most.

A modest suggestion: Every spending bill that comes before the legislature should carry a “Public Need” or “Public Good” rating. Something that benefits the neediest Minnesotans gets the highest rating (housing for disabled vets); something that benefits the least needy gets a lower rating (arts funding, football stadiums). Something that benefits the most Minnesotans gets a higher rating (highways); something that benefits fewer, no matter how wonderful, gets a lower rating (bike paths).

Likewise taxes: Every new tax should get a “Critical Cash Flow” rating. The money we raise with a Racino could help us cover a deficit, but won’t be critical once the income taxes start coming in when the economy improves. A tax surcharge, like the one Gov. Quie put in, goes into effect when income tax collections fall below a certain level, then automatically stops when income tax collections improve. “Stealth taxes” like increased fees and taxes targeted at specific groups like the Provider Tax also have a sunset level, a point where income tax revenues can cover the budget.

Beyond this, ALL surpluses go into a rainy day fund, no matter how large that fund becomes. That fund automatically goes toward cash flow long before anyone talks about new taxes or drastic program cuts

A bipartisan group of economists is appointed to come up with the Public Need and Critical Cash Flow ratings and targets. Using these general guidelines, the State Auditor’s office creates specific cut-offs and assesses the economic level. The office could use a colored threat level now that Homeland Security has moved on: “The State Auditor has determined that state finances are at Level Orange. The following fees will be assessed and the following defunding will begin the first of next month should this level not improve.”

I, too, really dislike the "stealth taxes" mentioned by vansiclenr. It would surely add some transparency to this discussion if *every* proposed change to *any* source of state income were identified.(The idea that the proposed Vikings stadium "does not raise taxes" is laughable.)

Charlie Weaver doesn't say anything very controversial in his statement in favor of cutting taxes — except for the old saw that we must lower taxes and spend less in order to attract jobs. The evidence is very slim in favor of his position, but the business lobby keeps hammering it.

More troubling is what he doesn't say. There's no mention of a vision for the state here except that our old vision is outdated. He calls for priorities but doesn't name them. He talks about improving service delivery (but not what those services will be in his new world) and about producing "desired results" without any indication of what they are or how cutting taxes will produce them.

Business has a very useful perspective that can benefit state government, but all we seem to get is the cost cutting part of it.

You can only cut costs to the point that there is'nt any. If the problem has not been resolved by that time, everyone starves together (definition of shared sacrifice by the highest income earners).

Oh, by the way, there will be a few folks who had stashed away a life raft that everyone paid for and they got to keep. Those folks will be just fine.

Once the flood subsides they will own all the land while everyone else has drowned. Capitalism, animal spirits, the spoils go to the winners...

Cut, cut, cut...who needs those pesky lower and middle class people anyway. Some of those doing the cutting while being cheered on by their supporters out on the same limb were so busy cutting they (and their supporters) did not notice they were cutting the branch they were sitting on.

Until it was too late...and there was no one left to save them.

Kudos to vansiclenr for a beautiful, well reasoned, outside the box formula to resolving our state's problems.

If only the folks doing the cutting would stop sawing...

Mr. Weaver - Thank you for participating in the discussion. Please address this topic in one of your rebuttals this week.

Your contention is that if we lower taxes, presumably on businesses and those with the highest incomes, that this will foster job creation. My question: At what point will businesses and the top 1% of wealthiest Minnesotans have enough to actually create these jobs? I have heard numerous stories in the business reports of companies reaping very large profits and having large cash reserves that they are not currently utilizing. CEO pay continues to increase dramatically. Take the case of one major MN company. While the CEO is an outspoken critic of the government for taking too much in taxes making this state and country uncompetitive, his corporate board found enough money to increase his compensation (in this time of recession) by 41% last year to nearly $20MM. His compensation increase the year before was 21%. If this is case of belt tightening, it seems that the belt may be getting tighter due to a thicker midriff.

Does this case, and others like it, support the notion that if businesses and wealthy individuals were allowed to pay lower taxes that they would use it to create jobs?

Thank you Michael for hosting this debate, and to both Nan and Charlie for taking part. I look forward to this debate getting beyond the "talking point sound bites" and all people being able to provide both evidence and history behind the propositions and proposals. People who not only give their names and reasoning behind their statement and question have more credibility in a mutual attempt at consensus building.

I was part of on the Citizen's League Common Cents project and think it is a good model for public involvement. If politicians can get beyond party rhetoric to address the critical needs that are both immediate and will also set the pattern for the next generations they will do a great service to the State of Minnesota and the people who live here!

Sorry, Ray, here is some evidence:
http://money.cnn.com/galleries/2011/news/1104/gallery.top_ceo_pay/16.html
That was the lowest number I saw.

Here's another:
http://www.startribune.com/business/118548314.html

On the claim of companies sitting on piles of cash and not hiring:
http://www.washingtonpost.com/wp-dyn/content/article/2010/07/14/AR2010071405960.html

http://online.wsj.com/article/SB10001424052748703766704576009501161973480.html

Tuesday - Rebuttal statement

Nan Madden - Director, Minnesota Budget Project

Madden’s rebuttal to:

Charlie Weaver’s opening statement

Charlie Weaver notes that our discussion here may not change many minds, but I’d like to start by highlighting that we agree on a fundamental need: a state with a strong economy, good jobs and a high quality of life. And we both think the things that make Minnesota a great place are at stake. Where we disagree is on how to ensure that Minnesota maintains our strengths in the future.

It’s no accident that Minnesota is an attractive place to live and work. As a partner with Minnesota residents, the business community, and the nonprofit sector, the public sector has been willing invest in building a state with a high quality of life that offers opportunities for success. Education, infrastructure, and healthy, safe and vibrant communities have contributed to Minnesota’s past success and are a critical part of a competitive future.

But a cuts-only approach to these tough economic times will only make it harder for Minnesota to compete for good jobs in the future.

Since the beginning of this economic downturn, states have cut services -- but the majority also adopted a balanced approach that includes revenues. So raising taxes won’t make Minnesota an outlier. We’ll be using a common-sense solution for meeting our needs both today and for the future.

The people who came before us made Minnesota what it is today. If we’re not willing to invest as they did, we will leave a poorer state to those who come after us.

Yes, competition now is global; all the more reason to make sure we step up.

Tuesday - Rebuttal statement

Charlie Weaver – Executive Director, Minnesota Business Partnership

Weaver’s rebuttal to:

Nan Madden’s opening statement

I agree 100% with Ms. Madden that this debate should be about creating good jobs – that’s why the Minnesota Business Partnership was started in 1977. And though we have different opinions about how those jobs can be created, all the available data makes it clear that states with punitive tax environments will fall behind in job creation. So in response to Ms. Madden’s opening statement, I want to address two points she made: one addressing “balance,” and the other addressing “fairness.”

The word “balance,” however well-intentioned, has quickly become – in its political usage – a word without meaning. I say that because those who advocate for a balanced budget solution actually envision something very different. For them, taking Gov. Dayton’s cue, balance means $300 million - $400 million in net spending cuts weighed against $3.3 billion in tax increases. That’s the kind of balanced approach that will make Minnesota less competitive economically and an outlier in terms of the approach 45 other states are taking. To put that in to perspective, consider this: in 2010, all 50 U.S. states increased taxes by a total of $4 billion. The budget favored by “balanced approach” adherents would equal (in two years) more than 75% of all the state tax increases levied by all state governments in 2010!

And how much spending is enough? Yes, the country is coming out of the “worst national recession of a lifetime,” but state revenue is projected to increase 9% from the 2010/11 – 2012/13 biennium. A 9% revenue increase is far more than most Minnesota families and businesses have seen in recent years. Now compare that to the 22% increase in spending Gov. Dayton and his allies are pushing for and once again their usage of the word “balance” bears little resemblance to its actual meaning.

Finally, a point about tax fairness. Ms. Madden is correct when she says that the “wealthiest Minnesotans pay a smaller share of their household incomes in state and local taxes.” But it’s important to note that this disparity isn’t because Minnesota doesn’t already have a high income tax rate – we have the 5th highest income tax rate in the nation – or a progressive income tax system.

A key factor in why low income Minnesotans pay a higher percentage of their income in taxes is because of our high business taxes.

Business taxes – corporate income, sales and property – are among the most regressive kinds of taxes. And because businesses don’t pay taxes – people do – they pass their higher costs on to consumers. The solution can’t be to tax our most productive individuals or increase business taxes when almost no other state government is taking that approach, but to lower the tax burden on business so they aren’t forced to pass along those taxes to those that can least afford it.

\\The solution can’t be to tax our most productive individuals or increase business taxes when almost no other state government is taking that approach, but to lower the tax burden on business so they aren’t forced to pass along those taxes to those that can least afford it.

1. Please define "productive" as you have used it.

2. "Forced" to pass the tax burden on to low income consumers so CEOs can continue to make tens of millions of dollars each year?

To call those who have capital to invest "our most productive individuals" is to not understand at all how an economy works. Capital will be attracted to an enterprise for one reason and one reason only: that there is demand for that product or service by the general public. Our economy is suffering, not because there is a lack of a capital supply kept away by higher taxes, but because there is a lack of demand. Consumers are not spending. Businesses are not spending. Government is the last player able to do anything about the demand-side of the economy, a perfect situation to invest in the nation's crumbling infrastructure. This investment, blocked by conservatives everywhere, would not only create future benefit for the Common Good (in education, power grids, rapid transit, etc.), it would also create jobs in the near term, thus further stimulating demand. The supply-side of the equation always follows, never leads, and attacking that side through lower taxation for the owner class is breathtaking in its ignorance. All taxes need to be increased, based on the ability to pay, to spur this sort of investment.

Like Alison and dana-reynolds, the words 'most productive individuals' jumped out at me immediately.

Before carrying on our discussion on taxes, we should explore these words. While making for a tasty sound bite, they instead highlight the disconnect between Mr. Weaver's believes and reality. I am sure he is a nice guy, so am I. I also expect he puts in full days at the office and pays his taxes.

A visit to the Minnesota Business Partnership website's mission statement at http://www.mnbp.com/mission.cfm sheds a bright light on his position.

I love their mission statement "Maintain a high quality of life for all Minnesotans by ensuring that the state’s economy remains strong, globally competitive and its prospects for growth bright". Wonderful, great, I agree!

In the past I would never have questioned the premise behind these wonderful, uplifting words.

When I read on, the real value system behind the organization emerges..."The nature of our membership — more than 110 chief executives from Minnesota’s largest employers".

In this lies the rub. These are exactly the people that would be hit with the proposed tax increase on the wealthiest Minnesotans, which is exactly what they are!

Now we know why Mr. Weaver espouses the ideas that he does. He is paid by the wealthiest individuals to represent their interest. Therefore we have nothing to talk about since everything he contributes will now be seen through this colored lens of personal interest.

I am sure Mr. Weaver and I would get along fine if I was a member of his club. I might even see things his (and his patrons) way.

Unfortunately, he is supporting the wrong cause. They should provide real leadership by volunteering to increase their contribution to our state. Then we would be able to admire them and help them achieve their stated goals.

I know none of us are old enough to remember the discussions about ending slavery, but we are all old enough to know we should learn from them. There was one side who thought only of protecting the economy and the slaves. Freeing the slaves would decimate the economy, freed slaves would end up unemployed and homeless, they were unable to fend for themselves, it was there lack of capacity that made them candidates for slavery in the first place.
Fast forward to today where one side says businesses would collapse if it were not for the subsidies of the state. The other side who also seems to have forgotten the past states that unless we continue to take money from people via threat of imprisonment or taking of their homes that poor hapless citizens will be left adrift. In both cases the theft is justified based on the incompetence of those who MUST be aided.
What if we called their bluff? What if we said no to subsidizing business, no to expanding social services, no to expanding education? Let us for one minute assume that the rest of the citizenry is no more stupid, deceitful or indolent than ourselves. If the state stopped providing education for your children would you just leave them to illiteracy? Then why assume that any other parent would. If the state failed to provide for the medical care of your aged mother would you just let her go uncared for? Then why assume your neighbor would. Our business community suffered a huge shock as the effects of monetary policy ravaged our economy, why would they just say "screw it I quit" if we removed the JOBZ or any other subsidy program.
The paternalism of both parties is in step with infantilization of our youth over the last 6-8 decades where we have stretched adolescence for continuing our control at the expense of their maturity. Your kid can cross the street, you can pay for education and health care out of your own pocket and if your business cannot make it without taking money out of your neighbors till then you need to consider your business model and practices.

@Eduardm

Charlie Weaver has no hidden agenda behind his words. You do know who he is speaking for.

Nor does Nan Madden, who works for an organization that studies the state budget and "emphasizes their impact on low-and moderate-income persons."

And, of course, it is your right to give more or less weight to a position given the person and who they speak for.

But let me ask this - are the positions given only shared by those who make a lot of money ... or those who make very little?

Do others have a point-of-view and a stake in the discussion? And a position?

We know that the answer is yes. So dismissing someone's arguments because of what they do gives short-shrift to the points they are making.

In other words, is it not worthwhile to argue with the merits of each position?

How much to spend? How much to cut? Where? Why don't we first find out just what our state needs and how much is absolutely "uncuttable," and then figure out where and how much? Why aren't we laying out a program (a "vision thing") for our state for now and in the future as far as we can tell? What should Minnesota look like following one course or another. I think we do have evidence for one course or another.
I would carry that "public good" idea further. What are the consequences of our spending and our cuts? Consequences on the economy, our prosperity, what evidence we have for the results. We KNOW that early childhood education gives us a huge payoff in the long run, for example. Using facts and figures from reliable sources like Stinson.
I believe there is plenty of evidence for certain types of spending like early childhood education. When was our state the most prosperous and what were the conditions? What worked--insofar as we can assign causes? I think we can assign causes based on evidence, numbers, statistics about well being. We can look at other states and see how different methods work out.
What we can't do is follow ideology right over the cliff.
And I have never seen the value of comparing our state taxes to those of other states. So we tax somewhat more than other states--if we do. What are the results?
And I don't think we are collapsing under the burden of taxation. Taxes are lower than they've been in 30 some years.
And yes, I think we need to raise taxes on our richest citizens, who haven't been paying their share, and on closing loopholes and finding other ways to increase revenue. I own a home, but maybe the deduction for home interest should be taken away.

I agree with debating the merits of each position. One item I would like to see addressed was my challenge to the assertion that allowing the richest to pay less of their wealth in taxes will lead them to create more jobs. There may be some evidence that this happens, particularly with smaller businesses trying to get off the ground. But then these small business owners are rarely in the wealthiest 0.1% of Americans. I'm not sure this is the case for large businesses. If it is, prove it. Provide some evidence. At what tax rate does a corporation or an individual in possession of a substantial fortune begin to create more jobs?

Underlying this idea of tax fairness is the contention that compensation in this country is fair. I like the idea of an honest days work for an honest days pay. And those who work harder should get a reasonable amount more. I've known people working 60-80 hours a week holding down a couple arduous jobs who are barely scraping by. I've met executives who make challenging decisions, work long hours, and make 1000 times as much. This is not an exageration. I'm not sure we can have tax fairness when our compensation scheme is so unfair.

Mr. Weaver's arguments are challenged by evidence that the rich hold on to a higher percentage of their money than the poor. The economy is driven by consumers, and the poor simply spend a greater share of what they have. They have to to get by.

I agree that it is always worthwhile to discuss each side, as long as we do that while keeping in mind what is represented by a viewpoint. I was a bit harsh here, however, I am getting really tired of the drumbeat that only cuts will bring salvation, while it will not.

If I was a member if Mr. Weaver's club I would happily increase my contribution if that would benefit the entire state. The president of 3M was attacking the President for being anti-business while he takes home $22,000,000. I would be surprised if he is not among the membership of the Minnesota Partnership. Even Bill Gates has discovered that there is more to live then sitting on billions of dollars and I am grateful for it.

I attended a Rotary meeting where Bill Gates senior railed against the removal of the death taxes and told all of us that it made absolutely no sense and that the estate tax should stay. That is a prime example of what we should expect from our wealthiest citizens, not that they support having their taxes lowered and watch the society fall apart and with that their source of income.

Where are those executives and their voices for a balanced budget? At least the Koch brothers are honest about their intentions. They want unions decimated at any cost and will pay their political minions to make sure that happens.

You can fight against what you know, not against what happens in the back rooms and is falsely paraded as the truth.

Now for my small business perspective. Until this recession started I was relatively successful from the perspective that I was in the process of building an engineering company that served contractors throughout the USA.

There was a tremendous shortage of experienced fire protection systems designers which allowed me to offer my services nationwide.

Even in my best years, I did not pay additional taxes on my business income above my payroll taxes as an employee of the company. The reason was that engineering is a very labor intensive business and making a profit is hard to do. Then there is the constant investment in computer hardware and software, marketing cost etc. Health insurance premiums alone were over $24,000 per year.

I used personal credit cards and home equity lines to cash flow the business as well as a bank line of credit. It was never enough.

So to Amy Koch, who mentioned that her sister's small business had to pay tax on $85,000 of income I say that to have an $85,000 profit on which to pay taxes you must first have a fairly sizable, profitable business. You should be happy to pay taxes as that means you made substantially more then you spend.

Alison, a start up business would not pay any taxes as there is no taxable income.

There are not many companies that operate as a Sole Proprietor, in which taxable company income is personal income.

I have a sub chapter S corporation, where corporate income is treated as personal income on which you pay taxes on a personal tax rate.

As a result of the construction markets being seriously depressed at this time I made so little money (above company expenses) that we are actually getting a substantial tax refund.

A balanced approach provides an opportunity to fund our state’s needs. Why must we continue to honor the wealthiest Minnesotans by allowing them to pay a smaller share of their household incomes in taxes? In essence wouldn’t that mean that the wealthiest Minnesotans have enjoyed a tax cut for many years? Is it because balance makes sense that we cannot embrace it??

Costs will rise for Minnesotans one way or another – why not PLAN for a brighter tomorrow by supporting a better Minnesota through affordable education and job creation. We can not control where companies choose to do more business, but we can appeal to them by not cutting established services. As a former MN business owner, I would refrain from adding business assets in a state that boasts wealthy friendly and majority poor.

I am annoyed by Amy Koch repeatedly stating “we are only concerned with the budget“. Really? How? When? Simply arguing with the Governors plan doesn’t count does it? If the media is going to really report news can we please hear from someone who is not a broken record of negativity?? Giving Minnesotans some hope couldn’t hurt.

I also have to ask for clarification on productive? I have to wonder where I fit in? A dislocated worker whose non-profit position was eliminated, not being able to find another comparable position in any field, I am now a full-time student. I have oodles of business experience and knowledge and am a homegrown Minnesotan. I am once again trying to better myself for the MN career world. I am now faced with the uncertainty that I may not be able to continue my education if the cost continues to rise. How does one remain productive given limited choices? I can handle a long rocky ride if I can see light at the end of the tunnel. Sigh…without balance and some common sense…what a gloomy future we face in Minnesota.

We are bogged down in age old discussion on this subject.
Let's not forget about the positions of both sides, but I submit before we can address them, we must solve a larger problem.
*The Federal government is close to insolvency. The easy way to prevent collapse of the economic system is by printing more money. Of course, it complicates further the topics of this thread because it results in inflation.
*All but a few State governments are overspent as is MN. Most have balance budget laws so they must provide solutions to reaching monetary equilibrium. That's a "duh," but hang in there, I'm just setting the stage.
Here's the problem:
* MN has steadily increased spending over decades.
* The majority of business expense is people.
* The result is government being the largest MN employer, an unsustainable burden on private employed people and business.
* Therefore, increased taxes means not only sustaining current programs but some additional workers depending on their support from the private employed, or from false fiat Federal money actions that weaken everyone.
* The result: a continued slip into the pit of unsustainable economics that will eventually have to be addressed at the expense of even more people who have become dependent on government programs for their livelihood. You can see by Wisconsin the problem that is building.
We must solve the root problem of public/private employment percentages by shifting responsibility to the private sector. Perhaps we might even be able to lower taxes.

*Much of the economy produces no wealth, only shifts wealth

*Wealthy unwilling to share wealth they vaccuum from society

*The end of legalized slavery, the beginning of industrialization, the end of imperial manifest destiny, overpopulation....several reasons why established economies world-wide are failing. China, India, and Saudi Arabia will have their day of reckoning.

Let the wealthy private sector have their way, and I predict the wealth will be returned to rightful owners by less peaceful means.

These pathetic political two dimensional debates challenge the assumption of intelligent life.

Wealth receives most lavish benefit and profit in Minnesota, therefore the burden of payment for service provision needs to come from them. Period.

Of course spending has increased over the years, We have added people, we have more immigrants, and they are not usually white Europeans. We must teach their children English and American cultural ways. If we don't teach them, they end up dropping out of school, ignorant, and are much more likely to end up on welfare or in jail.
We are taking care of the needs of more people who cannot help themselves, like disabled children--left to the parents in previous years who had neither the money or the knowledge to care for them. I knew such a child and he simply died. Our society has become much more complicated and in some ways more humane. We don't throw people in debtor's prison any more, we don't consign people to the poor farms (we do let them sleep on our streets because they have no homes or any other shelter and that's another scandal in what is still the richest nation on earth). Children worked in sweat factories (some republicans are trying to bring back child labor), they were violently disciplined--spanking with belts for example, or forcing children to lower their pants so the spanking hurt more. And few people thought that was bad, or if they did, it was family business. It was a private affair when a man hit his wife or partner. In many ways we have become more humane. We don't allow cockfighting or dog fighting in our neighborhoods, and we try to provide poor children with breakfast in our schools--it may be their only or best meal of the day.
We need public transportation--not just highways--to get people places but also to reduce pollution and climate change, something we didn't have to (or just didn't) deal with before.
I've lived long enough to see how complicated our society has become with growth, technological revolutions, changing expectations.
Despite complexities, when I look back--I don't want to go back there.
I've no doubt wandered off the track but I get irritated when I hear people saying our governments are spending more and more. Of course they are. And they should.

Remember Ronald Reagan's trickle down theory? I think money trickles up far faster than it trickles down. :)
I will probably be one of those who will be losing their job
with the cuts.... Last time I faced this dilemma was in the 80's... Scary times... I want to work, I love working and am terrified of the prospect of getting so poor again that it was a financial crisis deciding to buy milk for my child or flour to make many things... we couldn't do both... I would be willing to live with cuts... just not cuts that totally cut people from the workforce... and you are right, the government is a big employer in MN....And the people I work with give their best and work hard for their checks.

May I also add that there is a whole section of the workforce that provide services... Service is another huge part of the economy...

Wednesday - Rebuttal statement

Charlie Weaver – Executive Director, Minnesota Business Partnership

I couldn’t agree more that “the people that came before us made Minnesota what it is today.” But simply “investing as they did,” putting the status quo on autopilot as everyone around us is moving in a new direction will do very little increase economic prosperity for all Minnesotans.

Ms. Madden is correct, however, in that “our competition [for jobs] is global.” But no one on earth is choosing to compete by growing government and putting up roadblocks to innovation and job creation.

The reason I said in my opening statement that I didn’t think our arguments would change many minds is largely because the way you approach Minnesota’s 2011 budget situation is primarily determined by the way you view the role of government.

I think Ms. Madden (and if I’m incorrect I sincerely apologize) believes that Minnesota’s exceptional quality of life is derived, not primarily but certainly largely, from government and the services it provides.

While I certainly understand that viewpoint, I respectfully disagree. Certainly, government plays a role. But on a far larger and more significant scale, I think the vast majority of Minnesotans rely more and derive their exceptional quality of life from families, faith, the associations we choose to make where we live and our jobs.

Business, especially our major corporations, also play a large role in our quality of life. And not just for the jobs they produce, but the civic contributions they make. The Guthrie, the Walker, our parks and our lakes, our sports teams and our universities – even MPR – all benefit significantly from corporate contributions and the support of high wealth individuals. “Tax the Rich” may be an appealing bumper sticker, but in practice it will drive the businesses and people who are so vital to our remarkable quality of life out of Minnesota.

See Charlie Weaver’s earlier statements:

Weaver’s opening statement

Weaver’s Tuesday rebuttal

Wednesday - Rebuttal statement

Nan Madden - Director, Minnesota Budget Project

When I speak about a balanced approach to the state’s needs, that means one that both raises revenues and cuts spending. Mr. Weaver is concerned that the Governor’s budget may not have that balance quite right, though he overstates the two-year size of the Governor’s current tax proposal by about $625 million.

What clearly is out of balance, however, is a cuts-only approach that includes no revenue. It would mean failing to invest in our future workforce and fewer Minnesotans getting back to work. It would severely threaten our economic recovery.

Let’s also be clear that no one is proposing that Minnesota expand total spending on services by 22 percent. A big part of the increase is because Minnesota, like other states, needs to respond to the expiration of federal Recovery Act funds– money that allowed the state to temporarily reduce its spending and still maintain commitments to education and health care. In fact, total state and local government revenues are a smaller share of Minnesota’s economy than 15 to 20 years ago -- and would be so even under the Governor’s budget.

Tax cuts are a weak tool if the state wants to promote job creation. Smart businesspeople don’t hire until they can start selling more of what they make. Businesses need customers, not tax cuts. But as the fragile economic recovery progresses, a cuts-only approach by state government would mean fewer people getting back to work. Families would find it harder to make ends meet, and have less to spend in their local communities.

Policymakers are moving into the final stages of budget negotiations, and Minnesota’s need to create jobs and build a strong economy will be best served by a balanced approach that includes revenues instead of only service cuts.

See Nan Madden’s earlier statements:

Madden’s opening statement

Madden’s Tuesday rebuttal

I'm with Patrick (above) - if the disparity between the wealthiest 1% and the rest of us continues to grow, I think we'll be looking at less peaceful means of bridging the gap. And, quite frankly, I'm in favor of getting rid of some of the wealthiest Minnesotans -- if Bill Cooper moved to Florida, who would miss him? He can't move TCF branches, and the minor loss in tax revenue from Mr. Cooper (who likely pays a lot less in tax on a percentage basis than most of the rest of us, thanks to the loophole-loaded tax code and an army of tax lawyers and accountants) could be offset by the rest of us paying an additional 0.00001% each. That's a great trade-off in my book.

One thing I do agree with Mr. Weaver on is that no one's mind is likely to be changed by this debate. Because the fundamental difference between liberals and conservatives -- I'm willing to sacrifice some personal gain for the greater good vs. I'm going to get what I want and screw everyone else -- isn't going to change. I'd love to see all the conservatives move to, say, the western half of the US and secede. Let 'em screw each other and leave the rest of us to work together for the greater good.

@fkaJames - maybe we need a 'Like' button :)

I do take issue with your preferred location for a conservative 'home land'. The west coast is mostly populated with democrats and they are not likely to agree to your proposal.

I suggest the Deep South...there are already a large number of conservatives there and living in the swamps would allow them to give in to their 'animal spirits'.

Then there is the task of separating the true right wingers from the moderates - there are lots of moderate conservatives that I get along with just fine. At least they have the best interest of all of us in mind and come at that from a slightly different angle.

@Nan Madden It seems to me that we are talking with the converted here. You are in the enviable position right now of having most of the contributors on your side. Since we all agree it is a bit hard to have a debate.

Maybe this is at the heart of our current problems, we are at a stalemate. There are only two groups with a clearly defined mission. Those on the right want to make the rich richer at the cost of everyone else, those on the opposing side want to tax the rich (and ourselves through some form of sales tax change) while working on higher productivity at the government's side to streamline the delivery of services.

You can't have a debate with a single issue opponent as there appears nothing we can say or do to get them to change their mind.

Will someone please explain to us how cutting everything creates jobs? When those of us in business want to create jobs we have to spend money!

Nice comment from the president of 3M yesterday..."We are enjoying record growth and profits and will continue to concentrate our capital expenditures where our customers are, and that is not in the United States".

In case anyone is wondering, my reporter's hat is on.

This issue is not just about funding a deficit. It goes deeper than that. We have a clash between two opposing political philosophies, with conflicting variants within each philosophy. The foremost basic disagreement is about the legitimate role of government versus the private sector. Another basic disagreement is about economic theory and practice. A third disagreement is about limits to personal liberty.

This boils down to a contest of ideals and core values. We are defining our problem as the absence of our prescribed solution and are willing to battle for our cause, regardless of the consequences. That win-lose mindset does not enable the discovery and enaction of win-win solutions that actually work.

The peacemakers are stifled. The decision-makers are moving. Symptomatic relief does not heal the root cause of the problem. It only digs us in more deeply.

Conservatives place themselves on the pedestal of 'no taxes'.
A totally false arguement. They know the cost of everything is rising(healthcare, education, etc). All these are the "haves" businesss tax on the public.

How empowering it must be to rifle the working-class with low wages and extended retirements, then to sanctify themselves by passing out bread crumbs through their fake benevolence...just enough to keep the masses under control.

It is not a cerebral political debate. It is ancient battles of "haves"(or zealous wanna-bes) and "have nots".

Roger's statement made me think of some things that I'd like to share.

When after years of looking at political/social/economic systems (Communism, Capitalism) I've come to the conclusion that they are like dogs: mongrels are far healthier than purebreds. Ultimately I want to blend the aspects of the Left and the Right into some sort of stable system where people can still be rewarded financially for their thoughts and efforts, but the rest of us are not left to wither and die if we are not innovators--or just have bad luck. I realize that a great deal of Charlie Brown, wishy-washyness goes into this philosophy, but that might just be maturity rearing its ugly head. I also realize that this means that every issue must be dealt with on a case-by-case basis. At the moment there seem to be only two options: kill the goose that lays the golden eggs, or allow the goose to kill you.

The marketplace, for its advocates anyway, seems to be not so much a tool as a fetish or talisman: something that will magically solve each and every problem of its true believers. Alas, I’m not inclined to agree with them. I had my libertarian period when I believed as fervently as they did—then I went through a couple of bouts of unemployment and found that I needed those government services after all. It was like sooooo embarrassing—but whether it was embarrassing or not was beside the point. I did the low thing and took survival over ideology. Since then I’ve decided that those government services need to be protected and fostered.

I simply do not see how cutting taxes on business and on the wealthiest individuals will "increase economic prosperity for all Minnesotans." The idea that hugely profitable businesses and their owners will then, altruistically, be inclined to raise wages, donate more to various non-profits, etc, has no basis in reality. Right now, we have companies sitting on huge amounts of cash, and the only "investments" they are making is in hiking up the salaries of their CEOs.

Sooo, once again Mr. Weaver, will you please explain to us in plain English without slogans or buzz words, how your proposal to lower taxes will actually create jobs?

We've been waiting all week for an explanation.

Please, convince us

I can help with some of the anti-tax thinking... I'm just going to go back to the Insight Now live forum on taxing and spending that happened on April 6

Former Republican leader in the House, Marty Seifert (at the 12:24 mark of the debate):

"If we 'taxed the rich' every time the government (remember, there's state AND federal income taxes) had a deficit, they'd be paying 100 percent by now. The structural costs of government have to be brought into a 21st century reality, including what we get out of government for value... (W)e often had job providers tell us what other states offered for incentives and tax rates, worker's comp, etc. We can't live in on an island."

Former Republican Speaker of the House, Steve Sviggum (at the 12:28 mark):

"There has to be a check upon government spending and a boundary on taxation levels to be maintained upon principle and reason. I recently read a poll that 61 percent of the citizens were supportive of taxing 'the rich' - whomever they are. The surprising thing is that it is not 95 percent!"

@Michael That was a very interesting conversation and worth reviewing. I was out of town and missed that.

Of course the participants are not presently in office and were reminiscing on what on hindsight appears to be a more enlightened discussions. I don't remember it felt that way at that time either.

Is it that there is too much noise and we are all too much aware of a minute by minute battle without having a real voice in the matter?

This week we enjoyed the presence of Judge Elizabeth Hayden at our weekly club meeting. She was deeply involved in the Al Franken recount and it was enlightening and fascinating to hear what was actually going on without the looking glass of the press. The point is that even the most intense events look a lot different and more concise in recollection.

We must hope therefore that the conversations behind the scene are a lot more productive then the principled grand standing that we hear when politicians get in front of the camera.

@Michael_Caputo - Are the featured debaters supposed to just debate each other while ignoring our comments and questions? Or is this more of a conversation in which we are included and the debaters might address some of our questions in addition to addressing the points made by the opponent on the previous day?

@Charlie Weaver from Monday - "this new revenue would only be a short term fix because tax revenue is growing more slowly than the fastest growing spending areas."

Here are my questions:
1. What are the fastest growing areas of state spending?
2. How do you propose to address the problems to the extent that your proposals would make a meaningful difference?
3. If the answer is to simply cut spending to a budget area, explain who would have to pay for the services being cut?
4. If the answer is reform of a program, what specific areas do you see where reform is possible that would save enough money to make a meaningful difference?

Please address these issues. I would be willing to entertain any well thought out proposals and contact my elected officials (all Dmeocrats) to discuss your ideas if they make sense and don't place additional burdens on the poorest Minnesotans.

Also, if you have time, I still have a question on the table from the other day:
At what tax rate does a corporation or an individual in possession of a substantial fortune begin to create more jobs?

In earlier decades the call was to help the "poor". Social inflation changed that to "middle-class". And now the elite is begging for help...or they will leave. I agree with fkaJames. Let the unloyal dog-eat-dog parasites leave.

The cry in the 70s and 80s was "get all those lazy poor off welfare and onto poverty wages. Things will be great." The working poor yet rely on government help, while subsidizing corporations with cheap labor. It's a racket, people. The elite is taking the government and us to the cleaners.

@Alison , @EduardM

Let me answer your question about the demands on the debaters.

I have asked them to submit comments each day for four days. I have also given them the option of coming in and commenting on their own. But I have not made that a requirement.

How the two debaters decide to use their space is entirely up to them. I think it's appropriate to put the questions out there. I'm also thinking that it makes sense for me to flag those questions and pass them along to the debaters when they come up (something I hadn't done ... but will do in the future).

I also think that it might make sense for me to add to the mix, as I did in a small way when I cribbed from our taxing and spending conversation, that occurred earlier in the month, to give a sense of how those opposed to raising taxes feel.

Each Friday I will try to summarize what can be learned from each discussion. I think that this one has its own lessons to impart. But I'll leave that to tomorrow.

I agree with many who have commented already. In particular, I agree completely with @Roger_ODaniel's point that the issues we face as a state are deep and complicated. The divergence of core values and philosophies needs to be addressed before the problems of our state can be effectively addressed. Problem solving from crisis to crisis seems to be only spawning more crises. We need to create a vision and a plan that extends beyond election cycles. I can really get behind @vansiclenr's suggestions.

I think there are fundamental differences in the way people look at the world that need to be talked about. Many are focused on the power of individuals to create their own prosperity, Having earned it themselves they should enjoy it themselves. Sharing should be voluntary philanthropy. Taxes are coercive and immoral. Employing people is to do them a favor. Wealth trickles down.

Others see a dynamic system that sets the stage for prosperity. Wealth can not be created without the contributions of most in society, and therefore everyone should share in that prosperity - not equally - but everyone who contributes honorably should at least come away with enough to support his/her family with a measure of security. That isn't happening any more.

To me there is a huge gulf between these points of view that can not be addressed within the electoral process as it exists in this country. We need to come up with a new way to talk about these issues. I really don't know what that way is.

You know something @Louise ... I think you are right.

I want to write about the idea that we, for some reason, have a hard time addressing the issue of how to raise revenue. It's a conversation that ignites passion to the point that people don't want to listen.

What has lead to this inability to discuss it? Is it because if you don't want to raise taxes you are branded as uncaring. Or if you do want to raise them you are tagged as being anti-free-market?

How does this affect the way legislators debate the topic?

Well said, @Louise.

Here is the public proclamations on tax hikes from those who would have to negotiate the budget (source: MPR News 4/19/11):

"Balancing the budget without raising taxes is what I campaigned on, why I got elected and what the people of my district expect from me." - Rep. Bob Barrett, R-Shafer.

(Gov. Mark Dayton says) voters may have elected a large number of Republicans to the Legislature — but they also elected him. And he reminds Republican leaders the voters knew where he stands on taxes.

You have to admit that, as an elected official, you would have to make some decisions based on what you campaigned on, right? Or should we expect something different from these leaders?

Folks, I think we are wandering off topic for a very valid reason. Perhaps the debate process revealed the possibility that we may have started with the wrong question. Perhaps the debate process raised a lot more questions that deserve thoughtful answers before workable solutions could be discovered. Perhaps the most fruitful lesson learned from this debate issue is that our government is desperately trying to fix a problem they cannot solve because it is a fix for a symptom and not the root problem.

It looks to me like the real debate is about economic ideology, not just money. One of the factors bearing on the problem seems to be the lack of understanding by the voting public about basic economic principles. In other words, we feel the pain, but do not understand the root cause and its long-term consequences. As a result, we look in the wrong places and fix the wrong problems. Worse yet, we blame the wrong people.

Like @Alison, I too have questions?
Can the Government buy prosperity? If so, how? If not, why not and who can?
Where do we go from here?

Thursday - Closing Statement

Nan Madden - Director, Minnesota Budget Project

Mr. Weaver overstates my position, so I appreciate the opportunity to articulate it more clearly. Yes, I believe that public investments are an important contributing factor to our state’s quality of life. During this debate, both Mr. Weaver and I have made pretty similar lists of things make Minnesota a great place – our cultural amenities, parks and lakes, universities. And he is right to note the contributions our businesses make to those things; I note that those are the things that we invest in through our public dollars as well.

Government – the embodiment of all of us working in concert for the public good -- is part of the way we build that quality of life. I don’t see it as the primary or largest piece, but it is an essential one, and the one that we work on together. To dismiss it as a roadblock or obstacle is to ignore the role public investment plays in creating the conditions for good jobs and a strong economy.

None of that means simply making the same decisions as in the past. But neither should we forget the combination of forces that brought us prosperity. We need to make smart decisions, consistently look for improvements in how we provide quality services, and respond to changes in the state’s demographics and needs.

In the end, we’re not debating a yes/no question here. It’s one about what is the appropriate level of public investment. That’s the kind of question where negotiations can occur and people can find compromises. A rigid, inflexible approach won’t help us. A balanced approach that includes revenues instead of only service cuts will. That’s the middle ground we need to occupy.

See Nan Madden’s earlier statements:

Madden’s opening statement

Madden’s Tuesday rebuttal

Madden’s Wednesday rebuttal

___________________________________________________

Thursday - Closing Statement

Charlie Weaver – Executive Director, Minnesota Business Partnership


CLICK HERE TO BE SENT TO WEAVER'S CLOSE

@Roger_ODaniel Thank you for your thoughtful approach. I have given more thought to this issue and after a bit of earlier venting I am ready to get more serious about this.

As to your question about the government buying prosperity, I do have an answer, or at least some thoughts.

I suggest that the government can definitely provide a floor and support during economic bad times, as we are experiencing right now. The biggest mistake that is being made at this time, which will become obvious in a few years when we can look back at this period, is that the support system is being dismantled at the wrong time.

Right now is not the time to cut all budgets when the economy is once again stalling and we are still at a historically high unemployment rate. I agree that we need to reign in debt at both the state and federal level, however, we need to do that over time with a well balanced plan that includes cuts and additional taxes.

The evidence of the importance of government support is right in my office. I did a HUD project last year that used stimulus funding - we designed and project managed the installation a residential fire sprinkler system in a three story apartment building in Melrose at a total cost of around $75,000.

Right now, the largest project I have been working on for the last 6 month is the design of fire sprinkler systems for 30 buildings owned by Indian Health Services. These buildings include dental clinics, a dialysis unit, a small hospital and a number of residences. The total value of this project in $1,300,000. I only get a small portion of that for the engineering work, however, four fitters will be working on this for months and may get this done by the end of the year.

I have done military and air force projects that resulted from stimulus money.

Governor Dayton is proposing a 1 billion dollar bonding bill which could not come at a better time for the construction industry. A lot of work can be done for the money - it will not get any cheaper then it is right now. Contractors are desperate and are literally buying work at below cost.

The stimulus money that has gone to the GSA has bought more construction work then at anytime before. The bids came in well below any estimates.

There are still 45,000 Minnesota construction workers unemployed. While this is down from the 80,000 people who were unemployed, it is not close to full employment.

If it was not for stimulus money I would not have survived this long.

What the politicians need to look at is how much money is going to unemployment right now and what the impact on cash flow would be if we were at 5% unemployment.

The other part of the problem is the millions of people who had to take jobs, not just at little bit below what they earned before they were laid off, we are talking about earning half or less.

We have to get people working again! That is essential for a recovery. Cutting every government program in sight will only serve to increase unemployment, increase the outlay for unemployment payments and decrease the money flowing to the government to bring down the deficit.

With inexperienced, highly partisan, principled newbys in office we are destroying this country, not building it.

Again, I want to get an answer on my question as to how cutting everything will create jobs.

Questions like this sustain the status quo. It implies a very limited number of choices. The public is then coerced into debating positions they really don't agree with. Politicians world-wide use this tactic to hinder real change as a bewildered public is told to focus on the end of its nose.

I think Roger O'Daniel and Louise have it correct - we can debate this question all we want, but there are underlying fundamental issues we need to resolve before we can truly even have a discussion about this topic. We need to have a long, large discussion about wealth disparity, taxation, and the role of government. For example, Grover Norquist has said that he would like to "shrink government to the size where we can drown it in a bathtub." Apparently, Mr. Norquist is an anarchist. His opinion, however, is diametrically opposite that of many Minnesotans I know.

Warren Buffett, at a political fundraiser in New York, said the wealthiest Americans "pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter. If you're in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent." I would posit that the more fortunate of us need to do more than think about the less fortunate -- we need to help lift everyone up to a minimum standard of living.

According to the IRS, the wealthiest Americans' ACTUAL federal tax rate (i.e., the average rate they actually paid) was 28% in 1992. Today, it is 15%. That's insane.

Thursday - Closing Statement

Charlie Weaver – Executive Director, Minnesota Business Partnership

The current budgetary pressures facing governments across the country are nearly unmatched in recent American history. A large part of this pressure comes, of course, from the recent economic downturn – one which today’s preliminary GDP report shows we are emerging from more slowly than anticipated.

But these budgetary pressures also coincide with decades of government spending choices – made repeatedly and by both political parties – that, in hindsight, we know we simply cannot afford.

These choices, together with larger social and economic factors, have resulted in a situation where more and more Americans are consuming taxpayer-provided government services while fewer and fewer pick up the tab. This kind of economic model is simply unsustainable.

So, we can choose to treat Minnesota businesses and an ever-shrinking segment of taxpayers as an ATM machine to fuel more spending, or, we can finally say it’s time to reform the way the state does business and demand that government “live within its means.”

I think the best choice – the choice that will grow jobs and increase economic prosperity for the most Minnesotans – is the one that finally asks government to start making the same kinds of choices and businesses and families have had to make.

Thank you to Michael and the folks at MPR for hosting this conversation, and also thank you to Nan Madden for her participation.

Weaver’s opening statement

Weaver’s Tuesday rebuttal

Weaver’s Wednesday rebuttal

"Again, I want to get an answer on my question as to how cutting everything will create jobs."

Eduardm, Who's advocating for "cutting everything?" Certainly not Charlie Weaver in anything that has been posted here this week.

Minnesota tax revenue for the 2012/2013 biennium is projected to be $33.3 billion, an 9% increase from what the state took in during 2010/2011. If, as the Business Partnership has been advocating for, state legislators pass and Gov. Dayton signs a budget bill that spends only the available revenue, that will equal what was spent during the 2008/2009 biennium.

Hardly a figure that could be described as "cutting everything."

Additionally, I dont know what budget proposal you're talking about when you claim that "cutting every government program in sight will only serve to increase unemployment." Hyperbole aside, that's not anything the Business Partnership supports, nor am I aware of any legislative proposal that does that. There are certainly proposals that freeze hiring and wage increases, but again, nothing that will increase unemployment simply by spending available tax revenue.

Mark Giga
Communications Director,
Minnesota Business Partnership

I'll have to find some time for a more complete comment later in the tonight or tomorrow, but I think Mr. Weaver's failure to address many of the questions raised speaks volumes.

Alison, nothing sinister going on, Charlie just had an incredibly busy week - as most during the legislative session tend to be. I'll go back through the week's comments and try to answer what I can.

@mark_giga

Thanks for starting the conversation. How do you characterize cutting $5 billion from the budget that the conservative legislature is proposing without raising any taxes?

We all have a pretty good idea what that means and I for one do not agree. I have not seen that your organization supports increasing personal taxes on your members which are defined as executives of large Minnesota companies

I was also addressing what is going on at the federal level, at least what is proposed by Paul Ryan and his friends. If you suggest that we should focus only on Minnesota in this conversation I can agree to that.

Does this mean that your organization actually supports a balanced budget that contains cuts and tax increases such as proposed by the Governor?

@Michael. I listened to the sound clip you presented today. I had not considered a proposal to lower taxes while broadening the net. What I liked about that proposal is that additional taxes are generated. I am all for that.

It would be nice to get more detail on what that means in reality, what additional items would have to be taxed in order to add to the revenue stream AND cut the rates.

I have mentioned that all internet sales should be taxed. Is that included?

We simply can't cut our way to prosperity.

This debate barely mentioned the influence of federal spending (fiscal policy) upon State spending. The invisible "elephant in our parlour" is unfundated Federal mandates. We also have our own State-born "elephants" namely entitlements. We also nurse a very expensive taboo, our love affair with organized labor.

I hear a lot of talk about "soaking the rich." I see that only about 52 - 58 percent of the adult citizens pay any taxes at all. I hear slogans that assert we need to redistribute wealth. I assert that we need to redistribute taxation so more of our citizens contribute to the needs of government.

We cannot address State fiscal reform without addressing Federal government fiscal reform. I propose one solution for both: a flat tax for income above a defined poverty threshold, with no exclusions, exemptions or deductions. Alternatively, we could adopt a variation of the gross income tax. This would simplify the tax law, eliminate the tax loopholes the wealthiest use to minimize tax liability, and broaden the tax base.

A wrap-up

Well, we thought that the time was ripe for a debate on taxes since the state budget deadline is just four weeks away and state leaders would seemingly have to find some common ground.

That's why we invited Charlie Weaver, executive director of the Minnesota Business Partnership and Nan Madden, director of Minnesota Budget Project to join us here.

MPR has prepared a wrap-up of this discussion - and some of what we learned had more to do with the tone of the debate on taxes than anything else.

Read the wrap-up

A long-term solution for our state’s budget involves major--and I mean MAJOR--health care reform. We could create the basis for a boom in Minnesota's economy if workers and employers had a 100% guarantee that all health care needs were taken care of by one simple, efficient insurance plan. When I say all health care needs, I mean everything: medical, dental, vision care, hearing care, mental health, nursing home and long term care, prescription drugs, and all therapies. Currently, too many workers and employers are prevented from achieving maxim productivity caused by our dysfunctional system of health insurance which is severely inefficient. No guarantee exists that an individual's health care needs will be covered indefinitely. In this inefficient system of companies making profits on insurance premiums, many Minnesotans have lost their health care coverage before they have recovered. In addition, there are Minnesotans without any health insurance. We need a system that gives people the peace of mind that their health needs will be covered, forever. Hooking health care insurance to employment should be outlawed in Minnesota and replaced with a system of guaranteed coverage for everyone. Efficient government spending on health care is a marvelous cure for our budget woes.

There actually is a bill, right now, in the Legislature to enact this guarantee. Unfortunately, most Legislators do not currently support it. If they realized what a job stimulus that bill represents, they would support it. Too many Minnesotans are staying in jobs they hate because they cannot afford to give up the health insurance which comes with that job. Employees stuck in jobs they hate—not a good formula for innovation and vigorous productivity! Too many small business owners cannot afford to hire, or keep, the talented workers necessary to maintain and grow their business because the insurance costs for those employees are prohibitive. Too many Minnesotans cannot afford to start their own businesses for the same reason. Yet, statistics indicate that it is small businesses which provide the majority of new jobs in the U.S. economy. Passage of the health care reform bill which guarantees coverage for everyone would eliminate this job-killing situation. We could free up Minnesotans to get jobs where they would be innovative and more productive because they knew their health care needs had guaranteed coverage. We could free up employers to hire talented people to meet their growing business opportunities if they knew that all pre-existing health conditions were covered by the state’s simple coverage plan. We could free up would-be entrepreneurs to launch their own new businesses. When the current insurance barriers in Minnesota are removed, I foresee a business boom in this state: employees and entrepreneurs achieving their maximum potential, unburdened from the time-consuming worry of meeting insurance costs. Why don’t enough Legislators support that barrier-removing bill? The insurance industry cartel, threatened to lose its golden egg, has been successfully scared people about “socialized medicine.”

The barrier-removing bill, SF8, is hampered by a misperception that the government would inflict “socialized medicine” on people, taking away individual freedom to choose the best health care for themselves. The manufactured misperception is that government would interfere in our health care decisions, whereas the interference of insurance companies controlling our health care is the true affliction. Insurance companies prevent a patient from freely choosing the best treatments available, since limiting the patient’s choices facilitates keeping more money in insurers’ pockets, rather than paid out on health care. The insurance companies comprise the cartel whose successful public relations campaign has propagandized a significant portion of our society to believe that a government system of guaranteed health care for every person—what they call “socialized medicine”--takes away individual control to choose which doctors, which hospitals and clinics, and which treatments people pick for themselves. However, SF 8 places those choices, and medical decision-making in general, in the hands of patients. SF8, The Minnesota Health Plan, guarantees that all costs (except plastic surgery for vanity purposes) will be covered. Few people have heard about SF8. Knowledge of it is suppressed by the cartel bent on guarding their lucrative profits.

The cost of providing comprehensive health care insurance for all the health expenses of our populace will actually be cheaper to individual taxpayers than the cost burden we are shouldering right now. Here’s an example. Minnesotans unable to afford the premiums or co-pays of health insurance go without routine health care. When extreme pain and disability force them to find some relief in hospital emergency rooms, often when their condition has deteriorated to a point where it is much more expensive to treat, who ends up paying the cost? Taxpayers. Emergency rooms at county hospitals get compensated for taking care of those welfare patients, and taxpayers pick up the tab. How much more cost-effective to have a one-stop plan that would prevent my fellow Minnesotans from resorting to the high expenses of emergency room care!

Consider the immense inefficiency of doctors and health care facilities paying full-time employees just to handle the administrative paperwork of insurance coverage administration--keeping up-to-date on all those plans! We could eliminate that cost if we went to the one-stop, efficient government spending plan of SF8.

A well-documented book (published in 2006) by a Harvard-trained analyst, Kip Sullivan, entitled “The Health Care Mess: How We Got Into It and How We’ll Get Out of It,” demonstrates that the efficiency of a government one-stop insurance plan for everyone is the low-cost alternative to the dysfunctional system now in place. The cartel was successful in removing the public option from the recent national health care reform bill. That spared the cartel from losing its premium payers to a competitive government-run, one-stop plan. A government one-stop plan is not motivated to increase profit, it exists to provide a basic necessity of society. SF8 would eliminate the inefficiency of hundreds of companies administering health care payments. It would also eliminate the excess administrative staff of doctors, hospitals, and clinics who navigate all the paperwork and phone time now imposed by insurance companies. SF8 would eliminate denial of coverage as a way to realize profit because the profit incentive would no longer exist. SF8 is efficient!

Instead of the often hidden fees we pay to fund health care, SF8 would directly tax individuals and businesses. This taxation would be progressive, based on ability to pay. We already have paycheck deductions for Medicare, a government-funded health care plan. That single-payer plan is a good precedent for SF8. Funds collected for the Minnesota Health Plan would go into an account which couldn’t be used for purposes other than health care. It would be transparent and accountable. SF8 has a provision to capture the medical portion of other types of insurance, such as from auto, homeowners, and workers compensation insurance. Those captured funds would be redirected into the special fund of the Minnesota Health Plan.

Everybody in Minnesota needs medical and dental care. The state should become the one-stop insurer of residents to guarantee their health care security, rather than allow profit-motivated companies to make decisions about the health care security of patients. With an insurance company, there is no guarantee that a patient will never get dropped from coverage, but with SF8’s Minnesota Health Plan, that guarantee is automatic. That’s maximum security! We deserve it, and the cost savings that come with it. I want government protection from the uncertainty imposed by profit-generating companies now in charge of health care coverage. Resent insurance corporations limiting what treatments a doctor can provide to you? Switch to the freedom and empowerment guaranteed by SF8.

The Minnesota Health Plan is a job-stimulus bill, a means to a prosperous economy. It offers a cost-efficient way to provide for a healthier, happier workforce. It is a cost-efficient way to provide health care to all patients, including those unable to pay out-of-pocket for their health care. More people working more hours in new jobs could result in more revenue through personal income tax and business tax. Comprehensive health care could result in result in more productivity because workers get their health care needs met instead of functioning with impaired health. I’m OK with insurance companies losing out because they have won so big for so long . . . it’s their turn to be denied. I’m unwilling to finance that dinosaur any longer. Power to the people! Human welfare, not corporate welfare, is what I value about SF8, The Minnesota Health Plan.

Efficient government spending on health care is a marvelous cure for our budget woes. Enact SF8.

@diane_peterson, our State cannot afford this entitlement any more than the Federal Government can afford it. Employers cannot guarantee their future existence, much less guarantee employee benefits. Ask Mayor Rybak about the impact on Minneapolis residents of defined-benefit health insurance plans. One legacy plan alone may cause Minneapolis property taxes to triple or the city may face bankruptcy. Government cannot do it either at any level. Although this is a noble goal, it defies human nature. Health care delivery providers expect to be paid for their services at a rate that covers the cost of their equipment and their education. Insurers only can insure for an insurable risk that a risk pool can afford to pay.

Don't get me wrong. There is a boatload of things that could be and should be done to make health care more useful, efficient and affordable. SF8 isn't the way to go, especially with ObamaCare pulling the strings.

I said I would be back with some further comments after I thought this over a bit, so here goes...

For years businesses have been providing less and less to employees. Sometimes it means reducing the company's share of premiums or eliminating health coverage altogether. It also takes the form of shifting to 401k plans from guaranteed pensions (or filing to fund the 'guaranteed' pensions). Or eliminating retirement benefits entirely. Companies are saving themselves money long term by doing these things, but rarely offering additional pay to allow employees to make up for the real cuts in value to their compensation. It also takes the form of shifting jobs overseas. Sure the taxes are lower, but what really drives the move is that benefits are non-existent and wages are lower. All of this in order for businesses to be "competitive". For many of our largest companies being competitive means providing executives with annual compensation in the tens of millions of dollars.

We now have the Republicans saying that we shouldn't be taxing these people, who are compensated hundreds of times higher than the the employees. They also claim we also have the need to get our costs under control for programs like health care for the low income and social security, our safety net for the elderly. First, the demographics are against us. We are getting older. Unless we start killing off the elderly, we're going to need more money for the elderly and health care. Aging is not the fault of the Democrats creating a nanny state. Second, those business leaders claiming we are spending too much on these programs are often the ones who forced their employees to those programs by eliminating employer support without corresponding offsets in wages.

Try as I might to have a reasoned discussion without blaming the other side, I keep going back a single thought. This discussion is driven by GREED. Pure and simple greed. Many corporate leaders, primarily residing in the party that claims the high ground on patriotism, could care less about the well being of most Americans. There are growing classes of consumers in China, India, and elsewhere that they can harvest money from, so they don't need our spending as much.

I'm willing to pay more taxes for the good of society, why aren't those who make 500 times my salary willing to do the same?

The answer of course is that some of them are willing, but theirs aren't the voices getting the most attention.

@Michael_Caputo - One point about the format. I think this only really works if the debaters are willing to address questions and comments from those in the discussion.

In this case, perhaps Mr. Weaver really was too busy as Mr. Giga claimed. I'll have to give him the benefit of the doubt. However, that did make for a thoroughly frustrating discussion, or lack thereof, with a major participant.