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Progressive Politics in Minnesota, the Nation, and the World

Eric "Santa Claus" Paulsen

Category: Taxes
Posted: 12/16/15 19:11

by Dave Mindeman

Rep. Erik Paulsen is playing corporate Santa Claus.

In the budget deal that was just announced there is a provision to suspend the Medical Device Tax for 2 years.

I am still searching for a legitimate reason why this corporate giveaway is needed. Let's take a look at the propaganda...

The U.S. House and Senate are poised to suspend a sales tax on medical devices for two years after intense lobbying on behalf of the medical technology industry that employs tens of thousands of people in Minnesota.

The lobbyists always frame their request in terms that their industry "employs tens of thousands of people in Minnesota". While this is true...is there any evidence that those employees would benefit from this corporate break? I have not seen any yet. I have seen enormous benefits for companies like Medtronic which received a $9 billion windfall for its merger with Covidian. Again, with little evidence that employees benefit.

So what is the benefit?

"This is a significant breakthrough," said Chris Swonger, government relations chief at Plymouth-based Smiths Medical. "This is a move to reinvest in innovation."


The tax package deal already has a research and development tax break in it. I have yet to see where stopping the Medical Device Tax will in any way ramp up more research and development. In fact, these companies have to keep increasing R&D or their business model fails.

Here is another talking point.

It is a tax on gross sales, not profits. Critics, including Klobuchar, argued that it pushed investment in medical technology to other countries

With all due respect, Senator Klobuchar, I would like to see any evidence of that. I mean real hard evidence. If device makers here see a competitive threat, they simply buy them out.

Here is another one....

Device tax opponents also profited from recent analyses by the Congressional Budget Office that the Affordable Care Act (ACA) is going to cost $176 billion less to implement over 10 years than had been expected, Klobuchar said. The downward shifting estimate offered wiggle room in negotiations with the White House.

Would someone please give us a true picture here? Is the ACA bankrupting the economy? or is it saving us money? Everybody seems to have a nice selection of the facts that suit their purposes. I would like to hear Paulsen use that "the ACA is a cost saver" argument in his next pitch.

This provision is just a small part of a huge budget deal, so if it stays in the conference bill, it will probably pass and Obama will sign it, because there are so many layers, it would be impossible to single out any one provision.

So Paulsen can tie this up in a pretty little bow and put it under the Repeal the Device Tax tree and proudly state.....

See donors? You got your money's worth!
comments (8) permalink

The Wealthy's Love/Hate Relationship With Minnesota

Category: Taxes
Posted: 04/16/14 01:45, Edited: 04/18/14 17:53

by Dave Mindeman

The wealthy always have such a quandary about where to live. And inevitably there is this debate about the wealthy and Minnesota taxes. Another article came out today....

Minnesota's wealthy caught in a tight tax net over residency

There is a simple question to ask these wealthy characters...

Do you or do you not want to live in Minnesota?

Snow birds want it both ways. They want the warm weather and low taxes of the southern states. But they want the quality of life, the medical care, the transportation options, and the pleasant summers of Minnesota as well. They just want to pay those low taxes...you know, wherever they get the "best deal".

Yeah, really loyal citizens. The good life, great education and responsible government of Minnesota probably made them wealthy - but they don't feel they owe Minnesota anything. Nope. They would rather manipulate taxes so that they get Minnesota benefits without paying for them.

So, why don't they just leave? Why do they spend enough time in this state to drive their accountants crazy? Why do they keep coming back... which makes it a challenge regarding their legal residency status?

Simplify it for all of us. Go. Leave. Head for those southern climes and don't look back. Stop all the business relationships with this state... the state that you can only complain about.

But you don't do that, do you? You can't completely let go. Why is that? Could it be that Minnesota has things to offer that the "cheap" governments in the south can't give you? Is it our "expensive" education system that trains workers and sets up careers? Is it our world class medical care -- as in Mayo Clinic or the Univ. of Minnesota systems? Is it a state with more Fortune 500 companies per capita than any other? Is it the myriad of Parks and bike trails and family venues that are built and maintained by those tax dollars that you don't want to pay?

Why oh why - can't you just say good-bye? It is a curiousity.
comments (0) permalink

The Contorted And Convoluted Tax Logic Of The MN GOP

Category: Taxes
Posted: 03/24/14 17:33, Edited: 03/25/14 13:13

by Dave Mindeman

When it comes to taxes, the MN GOP has some pretty tortured and convoluted logic. The Democratic tax policies are always a problem. The MN GOP Senate Caucus is circulating this little tidbit flyer....

http://www.mnpact.org/sblog/upload/gop%20tax.jpg

1. MN saw property taxes go up $125 million. Well it depends on how you calculate that. The Democrats contend there is a reduction. GOP needs a slanted argument to make this work.

2. Increased cigarette tax by $1.60 per pack. Considering that this is a health risk, most people applaud the increase. But this was part of last year's package. Was GOP expecting a repeal of this as well?

3. Increased individual income taxes by $1.1 billion by creating a 4th tier income tax and increasing the rate by 25% - from 7.85% to 9.85%. Now if I was among the 2% of Minnesotans that qualify for that, I might think more about it. It just doesn't affect that many people and again, it was from last year -- and Dayton ran on doing it.

4. Increased sales taxes for individuals on all internet purchases. It is about time that we equalize this unfair sales taxing method. Why should brick and mortar stores collect tax and internet companies not?

5. Increase sales taxes on all digital downloads like iTunes and Ebooks. This is where the sales are happening. Republicans seem to think that digital media purchases is not a sale. Really?

6. Increased sales taxes on individuals on TV satellite services. You know, the GOP could have lumped 4, 5, and 6 together as one digital sales tax point. But, like income taxes, it always sounds better when you itemize.

7. Homeowners will see rates for energy rise due to solar mandates placed on energy companies in Minnesota. First of all, this is not a tax. Second, it is questionable whether rates rise at all. Initial increases may happen with the switchover, but in the long run, rates should decrease.

8. Minnesota businesses will pay higher taxes through the repeal of the Foreign Royalty Deduction, and FOC tax treatment, and more. Did your eyes glaze over on that one? Nobody knows what it is - and besides the GOP seems to miss the fact that 3 business taxes were repealed in the new bill. Foreign Royalty? Prince William maybe? But again, not a tax.

9. Premiums and deductions are higher and many people forced of the insurance plan they like due to Obamacare/MNsure mandates. You knew they had to get Obamacare in there somewhere. Still, premiums and deductibles are overall better - not higher. And maybe a few people are forced off of a cheap plan they may have liked - but it more than likely didn't cover anything in the first place. And I repeat - not a tax.

10. Businesses must pay upfront sales tax on capital equipment purchases and now won't see a refund until 2015. Again, several business taxes were repealed and on this one THEY GET THEIR MONEY BACK!

The contorted logic continues and the complaints will never stop. But Minnesota has a booming economy and a surplus to work with. The GOP didn't give us that. We suffered through recessions and deficits with them.

Talk is cheap - it's the results that matter.
comments (0) permalink
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