MN-02 : Why Did Republicans Pledge NO to No Earmarks

On John Kline’s (R-MN-02) House website (which should deal with official government business – not campaign pledges), the Pledge to America is “unveiled” (what a weird word choice that Mr. Kline chose … is it some mystery, cloaked in secrecy, that after time is now safe to reveal).
The Pledge runs almost 8,000 words, complete with charts and graphs and inspiring quotations and photographs of “old” patriots and today’s patriots … beginning with a lengthy preamble modeled on the Declaration of Independence.

Sadly, the “new governing agenda for America” is pretty much standard fare; such as :

We pledge to advance policies that promote greater liberty, wider opportunity, a robust defense, and national economic prosperity.

We pledge to honor families, traditional marriage, life, and the private and faith-based organizations that form the core of our American values.

We pledge to make government more transparent in its actions, careful in its stewardship, and honest in its dealings.

Hmmm … no mention of “earmarks” which Mr. Kline has pledged to not restrict ? And no mention of “rescissions”
which could be an effective tool in reducing spending ?

The Pledge is broken into sections; such as :
A Plan to Create Jobs, End Economic Uncertainty and Make America More Competitive
It’s a good goal to create jobs however it should be noted that on the website that the Republicans used to collect job creation ideas , The Pledge does not address the prime suggestion :

Stop the outsourcing of jobs from America to other countries that do not pay taxes into the U.S. and stop the tax breaks that are given to these companies that are outsourcing. If there company is in the United States, hire people in the United States. That would create more revenue for the government as the American workers would pay taxes and the companies would be paying taxes to America as well.

No, The Pledge is actually to prevent “massive” tax increases by making all current tax rates permanent … okay, will that truly provide the funds to have a “robust defense” ?
Well, in reality whose income tax rates are being threatened … after all, President Obama wants to extend the tax cuts for virtually everyone except for families making over $250,000 per year … so what if they did revert back to the tax rates that existed prior to President Bush’s tax cuts … the top rate would go from 35% to 39%.
Which leads to the obvious question : did the Bush tax cuts help or hurt the country ? David Stockman, President Reagan’s Office of Management and Budget director said “(America’s) debt explosion has resulted not from big spending by the Democrats, but instead the Republican Party’s embrace, about three decades ago, of the insidious doctrine that deficits don’t matter if they result from tax cuts.” Further, Alan Greenspan stated : “I’m very much in favor of tax cuts but not with borrowed money and the problem that we have gotten into in recent years is spending programs with borrowed money, tax cuts with borrowed money. And at the end of the day that proves disastrous.”
Extending the tax cuts for the wealthiest families has not helped our economy, nor will it in the future.

The second topic is : A Plan to End Out-of-Control Spending and Reduce the Size of Government
This is where the Republicans could have embrace Mr. Kline’s personal issue … the end of earmarks … but they did not. This is the charade that the Republicans have used for years.
As Shelley Madore, Mr. Kline’s challenger, has highlighted “ incumbent John Kline has refused to fund local transportation and other important community projects and recently voted against the Small Business Jobs Act. Incumbent John Kline voted for the Bank Bailout and the Bridge to Nowhere in Alaska. ”
“Earmarks” are Mr. Kline’s personal crusade … a Don Quixote-ist fight against windmills that his fellow Republicans did not “Pledge” to end. Shelley Madore’s Thirty-Five Cents Tour points out how communities in the Second District have watched their tax dollars be spent in other states while their project requests are unheard by Mr. Kline.
If Mr. Kline cannot get his signature issue included inThe Pledge , why should constituents continue to endure his crusade ?

The last topic is : A Plan to Keep Our Nation Secure at Broad and at Home.

This is purely playing politics. Does any American not want a secure county … but at what cost ? For discussion sake, let’s ignore Iraq and Afghanistan and ask who is the enemy and how will they attack us ? No doubt your answer was a stateless terrorist group such as al Qaeda. The obvious question is : Are we investing wisely or are we spending to fight yesterday’s war ? Why does America need eleven Navy carrier fleets when no other country has more than one ? The simple answer is the one that Mr. Kline has given to explain his support for the F-22 planes that the Pentagon does not want … “it’s a good jobs program”. In terms of global world spending, Russia is under 5%, China is under 7%, NATO is just over 18% while America is over 48% … why are American taxpayers “Securing" the world ?
America can be safe, but still fiscally sound … but not with Mr. Kline’s unquestioning support for the military industrial complex.

My reaction to The Pledge is not alone. Erick Erikson on Redstate writes : This document proves the GOP is more focused on the acquisition of power than the advocacy of long term sound public policy.

I suggest voters take a Pledge to review Mr. Kline’s record and ask what he has done to help families in the Second District.

Will MN Republicans Support McCain’s Plan to Tax Health Care Benefits ?

As voters enter the voting booth this November, a recent NYTimes / CBS News poll indicate that the top issue will be jobs and the economy. The most salient point that Barack Obama made during his acceptance speech concerned those issues :
OBAMA: Now, I don't believe that Senator McCain doesn't care what's going on in the lives of Americans; I just think he doesn't know.
Why else would he define middle-class as someone making under $5 million a year? How else could he propose hundreds of billions in tax breaks for big corporations and oil companies, but not one penny of tax relief to more than 100 million Americans?
How else could he offer a health care plan that would actually tax people's benefits, or an education plan that would do nothing to help families pay for college, or a plan that would privatize Social Security and gamble your retirement?

That’s right … under the McCain plan, employer-provided health insurance benefits would be taxed as normal income for individual income tax purposes.

While employers would continue to deduct health insurance coverage costs, employees would pay taxes on the fringe benefit. Currently, the tax code provides an exclusion that allows companies to offer health care benefits to employees free from taxation.

That’s a MAJOR TAX INCREASE that is not being portrayed as such.
In August 2007 the U.S. Census Bureau reported that 59.7% of Americans received employment-based health insurance in 2006. Thus, this would be a major change for those employed by employers who provide health insurance benefits and no impact for those companies that do not.

Your employer may have different rates depending upon group history and policy coverage. For a point of reference, the Kaiser Family Foundation and Health Research and Educational Trust report the annual cost of a family health insurance premium in 2006 was $11,480. Essentially under the McCain plan, your taxable income would increase by that amount … and whatever your tax rate (10% to 35%) would be applied. Although the employer has a rate per employee, the insurance expense is probably a group policy expense, so the impact of adding $11,480 to the average worker’s pay will impact lower wage-earners harder … as well as ethnic breakdown. For example, the median household income in 2006 for White Americans was $50,673 (25% tax bracket) while Hispanics were $37,781 and African-Americans were $31,969. (Source : Income, Poverty, and Health Insurance Coverage in the United States, 2006. Current Population Reports, Consumer Income. August 2007).
Simply, the CEO of the company will have the same additional taxable income --- $11,480 health benefit --- as well as the lowest paid worker.

While burdensome to all but the most affluent families, this level of spending can be deemed excessive.

While this tax increase is substantial to the individual, it would provide the Government with some needed revenue. According to the Committee for a Responsible Federal Budget A Fiscal Voter Guide to the 2008 Election report, this plan to eliminate of the tax exclusion for employer provided health insurance could result in adding $201 billion to $274 billion to the Federal Treasury. (Yep, that’s Billion.)

One could look at this as a necessity to pay for the ongoing Iraq and Afghanistan operations or addressing the “borrowing” from Social Security and Medicare fund for other spending programs. Yet the CRFB report also indicates that McCain’s plans to continue the Bush tax cuts which will cost the government $294 billion, and that McCain plans to reduce the Corporate Income Taxes costing the Treasury another $55 to $68 billion. (Yep, that’s Billion.) MORE on reducing Corporate Income Taxes in a future commentary.

The obvious question is, Why does McCain advocate this change ?

Republicans like Dr. Brian Davis believe that there needs to be more competition and less government intervention in healthcare.
IF employees begin to be taxed for health care benefits, employees may be inclined to want to opt out of insurance. With the rising cost that employers have seen in health care costs, they may likely comply. This could lead to the end of the employer-sponsored health care benefit system. In 2007, some 45.7 million Americans — 15.3 percent of the population — were uninsured so that figure could rise substantially as more people just determine that health care insurance is unaffordable.

That may work out good for employers … and possibly for healthy employees, but for the others that have health problems that would be a problem. The percentage of Americans with insurance through a public program increased from 27.0 percent in 2006 to 27.8 percentage in 2007, primarily as a result of gains in coverage through Medicare and Medicaid. IF the employer-sponsored health care benefit system is effectively terminated, that would cause an increase demands for public programs which may result in scaling back Medicaid benefits and eligibility.

Remember McCain said that Bush made "the right call" in vetoing the SCHIP legislation and has repeatedly voted to cut, eliminate, or restrict health insurance coverage for low income children and pregnant mothers.(source) Congresswoman Michele Bachmann (R-06) and Congressman John Kline (R-02) also voted against SCHIP legislation.

When Norm Coleman, Dr. Brian Davis, Dick Day, John Kline, Erik Paulsen, Barb Davis White, Ed Matthews, Michele Bachmann, or Glenn Menze talk about taxes, be sure to ask them if they support McCain’s efforts to tax health care benefits.
Also, as you watch the Republican National Convention, watch for how often "cutting taxes" is discussed and how many times eliminating the health care tax benefit is mentioned.

Tax fairness should not begin with taxing the health care benefits.

MN-01 : Is the Reluctant Millionaire Doctor Rich ?

Pastor Rick Warren, best selling author of A Purpose Driven Life, during the Saddleback Civil Forum on the Presidency, asked the candidates to define “rich”.
WARREN: “OK. Taxes, this is a real simple question. Define rich. [ laughter ] I mean give me a number, Is it $50,000, $100,000, 200,000? Everybody keeps talking about who we’re going to tax. How can you define that? ”
OBAMA: “You know, if you’ve got book sales of $25 million, then you qualify. ”
[ laughter ] [ applause ]
OBAMA: “Yes. ”
WARREN: “No, I’m not asking about me. ”
OBAMA: “Look, the - here’s how I think about it. Here’s how I think about it. And this is reflected in my tax plan. If you are making $150,000 a year or less, as a family, then you’re middle class or you may be poor. But $150,000 down you’re basically middle class, obviously depends on the region where you’re living. ”
WARREN: “In this region, you’re poor. ”
OBAMA: “Yes, well - depending. I don’t know what housing practices are going. I would argue that if you’re making more than $250,000, then you’re in the top three percent, four percent of this country. You’re doing well. Now, these things are all relative. And I’m not suggesting that everybody is making over $250,000 is living on easy street. But the question that I think we have to ask ourselves is, if we believe in good schools, if we believe in good roles, if we want to make sure that kids can go to college, if we don’t want to leave a mountain of debt for the next generation. Then we’ve got to pay for these things, they don’t come for free, and it is irresponsible. ”

A straight answer to a straight-forward question.
$250,000 salary is rich and $150,000 and below is middle class.

When asked the same question, McCain failed to give a direct answer instead he tried to connect a happy state of mind to being rich and --- hopefully in jest, said -- “So, I think if you are just talking about income, how about $5 million?”
But hidden in his answer was the comment “I don’t want to take any money from the rich — I want everybody to get rich."
A laudable goal which may be more realistically achievable if he was still trying to create a happy state of mind than financial net worth.

I don’t want to get into the comparison of the Presidential candidate’s net worth as we know they are both out of our neighborhoods… while Obama may live in a $1.65 million Georgian revival Kenwood mansion while McCain's ten homes are valued at $13,823,269
It’s safe to say that they are both “rich”.

In reality, aren't most people who run for federal offices "rich" ?

Yet, in Minnesota, we have a candidate who is reluctant to acknowledge his financial status. In fact, he has stated that “I don’t believe our total assets, even with our house, that we’re over $1 million.”

OK, but Mayo Clinic Dr. Brian Davis reported a salary of $411,720 while his wife, Dr. Lori Lillienberg also received a salary from the Mayo Clinic totaling $52,009.31 in 2007. With the benefits offered by his employer including a 401k plan, most would consider Davis “rich”.

Why this charade ?
Dr. Davis you are “rich” … after all, most do not have the $124,000 to loan or $60,614 to donate to a Congressional campaign. link
Spending money like that may be “technically” why you may not be a millionaire ... but you wouldn't have it to give if you weren't "rich".

For Davis his theme is “Drill here, Drill now” yet, with a national debt that has skyrocketed during the Bush years, he needs to address the important questions regarding tax policy.
Will you tax the "rich" or ignore the problem for future generations to address?
Will you promote a program of tax fairness ?

Davis has said that a good Congressman “focuses on the bottom line and works to reduce spending and taxes.”
So far, Davis has only expressed his support for eliminating the Estate Tax (which I suppose may get him some votes from millionaires).
Thus he has promoting a lower tax revenue base which supports his analysis that “Our budget deficit in Washington has been created because of a spending problem, not an income problem.”
What spending programs would he cut ?
Davis expressed displeasure with the Food, Conservation, and Energy Act of 2008 (aka the Farm Bill which was approved by overwhelming margins : House 317-109 Senate 80-14) because it contained “bad parts” such as the USDA’s Food and Nutritional programs that assist working families and seniors.
How will he address other entitlement programs such as Medicare and Social Security ?

There are many other issues that need to be addressed, but to this fiscal conservative, tax fairness is at the center and to me Obama outlined a fair plan :

OBAMA: “What I can say is under the approach I’m taking, if you make $150,000 or less, you will see a tax cut. If you’re making $250,000 a year or more, you’re going to see a modest increase. What I’m trying to do is create a sense of balance, and fairness in our tax code. One thing I think we can all agree on, is that it should be simpler so that you don’t have all these loopholes and big stacks of stuff that you’ve got to comb through, which wastes a huge amount of money and allows special interests to take advantage of things that ordinary people cannot take advantage of.

Obama’s ideas seem to fall in sync with Tim Walz’s Middle-Class Tax Fairness Act which will cut taxes for 61 million taxpayers and save an average of $750 on their taxes this year if his legislation were enacted. The Walz Middle Class Tax is fiscally responsible and fully paid for by cutting government waste and tax give-aways for big corporations. The Walz legislation would also help pay down nearly $60 billion of the national debt.

Davis --- millionaire or not – needs to tell us what his idea is for a Fair Tax plan … continued budget deficits will haunt future generations.

Where’s Norm Coleman Press Release on Tax Fairness ?

Republican Senator Norm Coleman is a PR machine … so when Norm doesn’t issue one there must be a reason.

So far this month, there have been thirteen, such as :
--- FEDERAL SUPPORT FOR MINNESOTA CRITICAL-NEED LANGUAGE PROGRAMS (somewhat notable since Senator Obama has been criticized for encouraging foreign languages, yet, Coleman states “Allowing our young people to become more connected with the global community will not only enrich students’ education, it will strengthen America’s place in the world for years to come.”);
--- SENATOR COLEMAN ANNOUNCES FUNDING FOR HOMELESS VETS CENTER IN ST. CLOUD (somewhat notable since Representative Michele Bachmann has taken the “No Earmark” pledge and St. Cloud is in her district.);
--- COLEMAN, LANDRIEU, BAYH ASK SEC. RICE TO NEGOTIATE WITH VIETNAM ON INTERNATIONAL ADOPTION (somewhat notable since Coleman does not acknowledge that other members of the Minnesota delegation also signed the letter … including Jim Oberstar immediately below Coleman’s signature, Amy Klobuchar on the same page as Coleman, then after the other Senators starts Tim Walz on page 7, Keith Ellison on page 8, John Kline and Betty McCollum on page 10 and finally Collin Peterson on page 11. Absent are Michele Bachmann and Jim Ramstad and for those that complain about how the presidential campaign has affected the involvement of the principles, Barack Obama signed the letter while John McCain did not.);
--- BILLINGS USED DEAD DOCTORS' NAMES (notable because this involved Coleman’s role on the Permanent Subcommittee on Investigations.)

What a second … wasn’t there some other notable news from the Permanent Subcommittee on Investigations this week ?

Yes, there was … on Thursday, the Tax Haven Banks and U.S. Tax Compliance hearing was held.

From news reports : Wealthy Americans are hiding about 1.5 trillion dollars in overseas tax havens in a "deceptive" partnership with top foreign banks such as UBS, resulting in 100 billion dollars in lost US tax revenue.
Senator Carl Levin (D-MI) asked the fundamental question : Why would a U.S. taxpayer open a UBS account in Switzerland, when it could bank with UBS right here in the United States? Why would 19,000 U.S. clients with nearly $18 billion in assets choose to open Swiss accounts?

And that’s just one bank.
Think about it … that’s millions of dollars in each account ! Dollars that should be going to pay for the Global War on Terror and reducing the national debt.

Senator Coleman said, “It is simply unacceptable that some individuals are using offshore tax havens and secrecy jurisdictions to shelter trillions of dollars from taxation, forcing working families to shoulder the tax burden. By exploiting gaping loopholes, these foreign banks are enabling felony tax evasion. Simply put, foreign banks should not be Al Capone safe-houses for evading taxes. Closing these loopholes means we must strengthen reporting requirements, broaden the scope of the audit program, and extend the amount of time the IRS has to investigate cases involving an offshore tax haven.”

I think all of us can agree with Senator Coleman’s statement, yet I have to ask two questions :
This story has been rumbling around for years, so why did it take until Senator Levin took over as Chairman of the Subcommittee to get the investigation moving?
Why hasn’t Coleman issued a press release reporting these findings ?

I can only speculate that the answers to both questions are the same --- it might be embarrassing for Senator Coleman and for others.

Coleman was thrilled to get his assignment in 2003 to be the Chairman of the Subcommittee. Others have identified at least 18 oversight opportunities that Coleman did not investigate, so I will not go into detail on this. Suffice it to say, that the Republican Congress allowed the Executive Branch to operate without oversight wasting billions of dollars, lives, and America’s standing in the world. By his assignment, Coleman is complicit in those failings.

But the second question is more relevant.
By issuing a press release Coleman would be further highlighting people that may be problematic for the political parties. After all, bundlers and campaigns need money and where do you get money but from the affluent. The violator’s names are not listed, but I am sure that many have contributed to members of both political parties.
And as who those people may be mystery at this time, it is not surprising to hear the name of Cindy McCain being mentioned in the blogosphere. With an estimated wealth of $100 Million (before the InBev buyout), she certainly would fit the mold of a candidate that could use UBS’s Private Wealth Division. Add to that, that Phil Gramm, who until Friday was John McCain’s campaign co-chair, is vice-chairman of UBS Investment Bank and a former lobbyist on behalf of UBS. (Note : this is not the UBS division that is involved with the offshore tax haven scandal, but it would be surprising that a US vice-chairman would not be aware of his company’s Private Wealth Division.) It would be wise for Mrs. McCain to release her complete tax returns for the past ten years. It would be also advisable for every member of the current Congress, and every candidate for this upcoming election, issue a statement whether they have investments in offshore bank accounts.

$100 billion dollars in lost revenue is a lot of money. As the candidates talk about issues that voters can relate … like the impact of the rising cost of a gallon of gas and the cost of health insurance, we must talk to them about tax fairness. We struggle though life -- struggle with tax forms -- paying our fair share, but some have access to hid their income.

Coleman’s right when he says that it is wrong for ”working families to shoulder the tax burden” … now the question, what will Coleman do about it ?

MN-24-B : Honk For Tony Cornish

State Representative Tony Cornish (R-24-B) has the perfect vehicle for a rural legislator in perpetual campaign mode -- a Ford pick-up truck complete with an ample number of “Support the Troops” ribbons, a collection of decals that lets everyone know that he likes Ducks Unlimited, a placard with his picture and “Re-Elect Tony Cornish” on both side panels, and a single bumper sticker.

The bumper sticker is not a “John McCain for President, even though he is one of McCain’s original members of Team Minnesota.
The bumper sticker is not a “Dr. Brian Davis for Congress” as Cornish endorsed Randy Demmer.
The bumper sticker is not a “Coleman for Senate” … maybe he wants to drive the bus?
No, the bumper sticker says “HONK if you want to pay Higher Taxes”.

It’s great campaign rhetoric, but the wrong question is being asked.
It should say “HONK if you want FAIR Taxes”.

It’s not a question of whether any of us want to pay more taxes, but is the current tax system FAIR to all income groups ?

A quick look at Table 1-8 on page 20 and Table 2-2 on page 27 of the 2007 Minnesota Tax Incidence Study tells us that some are paying more and some are paying less. The study divided 2,363,258 households into ten equally weighted groups and then determined breakpoints by household incomes.

Group 1 Income of $10,175 and under Paid 19.3 % in taxes
Group 2 Income of $16,816 max paid 11.4 % in taxes
Group 3 $23,135 paid 10.9 %
Group 4 $29,766 paid 12.0 %
Group 5 $37,559 paid 12.6 %
Group 6 $47,192 paid 12.4 %
Group 7 $59,748 paid 12.3 %
Group 8 $76,437 paid 12.4 %
Group 9 $105,450 paid 12.4 %
Group 10 $105,451 and more paid 10.8 %
Overall the Total Group tax rate was 11.7 % meaning that because of the highest earners, the overall rate looks lower, but most of us are not in that income pool.

The Top 5 % (representing just 118,195 taxpayers) began income at $146,809 paid 10.4 % in taxes, while the Top 1 % (23,668 taxpayers) begain income at$354,758 paid only 9.3 % in taxes.

The obvious inference is that those with the greatest ability to pay actually contribute the least. Actually, there really isn’t any significant difference for most of us until the $100,000 threshold is reached … then the tax burden starts reducing.

Fair … you decide !

Will the next legislature address taxes ?
More than likely, but will it be any fairer ?
One group will most likely get a hearing is business since Governor Tim Pawlenty (R) has initiated a 21st CENTURY TAX REFORM COMMISSION. Business taxes contribute 22.6% to the State’s operating revenues, so if there is a reduction in business taxes, the funds will have to made up by somebody … or services cut.

The difference between taxpaying citizens and business is that taxpayers pay based on wages while a business pays based on profitibality ... its a fair system, unfortunately, with today's tight economy many businesses will be reporting lower profits (or even losses) ... the result is lower tax payments from the business component.

And will other operating costs go up …if you think about the price of gasoline in your vehicle, how do you think that price increase impacts all the state vehicles from snow plows to school buses.

Face it, the State is looking at difficult times ahead.
Will our legislators make changes that create a Fairer system ?

Let me offer one proposal that in and of itself would not be a tax increase but instead an elimination of a tax break. Currently, Minnesota Income Taxes follows the Federal Tax Code and allows contributions to retirement accounts (i.e. 401k) to be excluded from income, since it will be taxed when it is withdrawn. That would be fair if the monies are earned in Minnesota and the person spends their retirement years in Minnesota … if they move out of the state, then those deferred dollars might be taxable income in the other state …. in other words, Minnesota loses. The 2008 401K contribution limits for employee contributions is a maximum of $15,500 which many companies restrict to a maximum of 10% of wages. For example, if the wage was $40,000 then the max would be $4,000 deferred which may mean an additional $282 in taxes this year (but when the deferred dollars are used the full $4000 would not be taxable); if the wage was $354,758 then the maximum would be $15,500 or $1093 in increased tax payments. If you do not participate in a 401k plan, then there would be no impact. This small change would help the state now.

But one thing voters know about Representative Cornish is that he does not like taxes. His votes against the gas tax, the bonding bill and the omnibus tax bill indicate a strong support for the current system. Not necessarily a Fair Tax system but one that the affluent must appreciate.

I don’t know if Cornish will have any competition from the DFL, Independence or Green Parties, but this voter will be anxiously waiting to hear their tax policies.

In the meantime, I’m on the lookout for a bumper sticker for my Ford pick-up that says “HONK if you REJECT Tony Cornish”.

Walz and Ellison Fighting Shell Games

Good News !

Legislation that I strongly support (background here), has past its first hurdle. As happens quite often, bills are combined or segments incorporated from one bill to another. In this instance, H. R. 5719, which is also known as The Taxpayer Assistance and Simplification Act was introduced on April 8th with Minnesota Congressmen Tim Walz (D-01) and Keith Ellison (D-05) as co-sponsors. The House Ways and Means Committee has moved quickly on this legislation passing it on April 9th. Included in this legislation is that US companies that employ workers through foreign shell companies be required to pay Social Security and Medicare taxes if their work was performed under a federal government contract.

Last month, it was reported that companies such as Kellogg, Brown and Root have avoided paying hundreds of millions of dollars in federal Medicare and Social Security taxes by hiring workers through shell companies based in the Cayman Islands. As a result, these workers cannot receive unemployment assistance should they lose their jobs. While the use of the shell companies saves workers their half of their Social Security and Medicare taxes, it deprives them of future retirement benefits.

The funding of Social Security and Medicare benefits are predicated on participation by everyone. It is un-American that these US firms obtain federal contracts and then establish shell companies to avoid participating.

If you have contacted Congressmen Walz or Ellison as a result of my efforts to promote HR 5602, please let them know that we appreciate their sponsorship of HR 5719.
So often we hear about being fiscally responsible, well, as a fiscal conservative, I believe that everyone paying their share is fiscally responsible.
The Joint Committee on Taxation estimates (see report JCX-30-08) that this will add $480 million dollars to the funds over the next five years.
THANKS Congressmen for being fiscally responsible !

Most Powerful MN Republican in Congress ? Coleman – No; Kline – No; Bachmann – Maybe

Query : Who will be the most powerful Republican representing Minnesota when the next Congress convenes in January 2009 ?

To answer the question, it’s best to define what is meant by “powerful”. For the purpose of this question, “powerful” is defined by influencing legislation or attracting media attention.

Also, the answer assumes that the three currently serving Republicans will be re-elected; that Jim Ramstad will not seek re-election; and that any new Republicans elected will not be assigned as high ranking members of significant committees.

First, let’s look at the current rankings by Congress.Org : Senator Norm Coleman (#82 out of 100);
Jim Ramstad (#203 out of 435);
Michele Bachmann (#363)
and finally John Kline (#396).

One would think that the Senate would present the most opportunity for power but with the entrenched party seniority system, that has not helped Coleman. Currently, the Senate is technically evenly divided with 49 seats for the Democrats and Republicnas, but the Republicans must defend 23. In addition, five Republicans and no Democrats have announced that they are retiring. Coleman should move up four spots on the ranking based on those retirements ( Larry Craig is rated below Coleman having been disclipined for his “behavior issues”.) Coleman currently has two high profile committees. Coleman is assigned to the Committee on Foreign Relations where he is behind Dick Lugar (IN) while George Voinovich (OH) was elected in 1998 (versus Coleman in 2002). As many Minnesotans know, Coleman is on the Committee on Agriculture whose ranking Republican is Saxby Chambliss (GA) with five other Republicans ranked higher than Coleman’s seniority. Also, as most of us rural areas of Minnesota know, Coleman has been unsuccessful in getting his Republican counterparts to get the 2007 Farm Bill enacted. The latest is another temporary extension until April 18, 2008 of the Paul Wellstone negotiated bill.

Due the Senate’s filibuster rules, unless VOTE 60 is achieved, legislation will remain firmly entrenched in limbo mode.

The House is another story.
Here the number of members that started the session that will not be returning seems to be growing everyday. 22 Republicans have announced their retirements at the end of the session. Another 12 Republicans will not be returning next year for a variety of reasons (seeking a different office, etc.) In contrast, maybe seven House Democrats are not seeking re-election.
The Democrats currently hold a 233 to 198 advantage over the Republicans.

The smart money is that the Democrats will hold the advantage in January 2009.

The interesting question is, who will the Republicans assign to the major committees?

In my opinion, the two most powerful committees are the Ways and Means and Appropriations Committees.

The House Ways and Means Committee is charged with writing tax legislation and bills affecting Social Security, Medicare, and other entitlement programs. Of the 24 Republican members on the Ways and Means Committee in 2006, only nine will return in 2009 — and that’s assuming every GOP panelist wins reelection this November. Jim Ramstad is Minnesota’s voice on the Committee.

The House Appropriations Committee is responsible for writing each of the 13 annual federal spending bills. Six of 29 Republicans are retiring and the ranking Republican, Jerry Lewis, is connected to a federal investigation. No Minnesota Republicans currently serve on the Committee.

John Kline is currently assigned to three committees, most significantly, the House Committee on Education and Labor where he is eleventh in the pecking order.

Michele Bachmann is currently assigned to only the House Committee on Financial Services.

Considering the number of openings on the Ways and Means Committee it would not be surprising for Congresswoman Bachmann to seek a seat. Considering her work on Minnesota’s Taxpayers Bill of Rights and being former federal tax attorney, she would be a logical candidate.
Logical, yet potentially disappointing if you desire any health care reform. While Jim Ramstad was a leading advocate for insurance reform, Bachmann has voted against SCHIP and Mental Health Parity.
Bachmann has become a media darling – making media appearances on Bill Bennett's Morning in America, the Laura Ingraham Show, the O’Reilly Factor, etc. She has also penned commentary on Townhall and initiated legislation such as the Light Bulb Freedom of Choice Act that appeal to a certain group of supporters that are likely to make contributions for her campaign committee. It’s a smart strategy that may return her for another term. Yet, the concern is not only for what may not happen with health care reform, but her ideas on tax policy.

The thought of “Powerful Congresswoman Michele Bachmann” just put shivers down my spine.

Voters in the Sixth and Second District have a choice, do you want Bachmann or Kline assigned to these committees to continue their efforts to neglect Health Care Reform and continue Tax Policies that grow the federal deficit ? This election is not only about who will represent your district but who will be assigned to these important committees.

Minnesota State Tax Proposal : The Bill Cooper Legacy Tax

“ Anybody has a right to evade taxes if he can get away with it. No citizen has a moral obligation to assist in maintaining the government. If Congress insists on making stupid mistakes and passing foolish tax laws, millionaires should not be condemned if they take advantage of them. -- J. Pierpont Morgan

In the spirit of J. Peirpont Morgan, I propose The Bill Cooper Legacy Tax as a lasting tribute to the man who fought Minnesota tax policy.
For those of you who do know the name Bill Cooper, it’s probably because you are not a Republican millionaire who views taxes as evil and excessive.
Bill Cooper has thrown in the towel and left our state ….
But with our money.
Legally, I might add … because the State Legislature wrote the laws.
"I reject feeding this dysfunctional [Minnesota government] beast," said Cooper, who made millions in cash compensation and is worth more than $100 million in TCF stock, admitted that Minnesota also proved a decent place for him to eke out a living.

It’s time to correct that stupid mistake and correct a foolish tax loophole.

Many Minnesotans participate in deferred retirement programs … i.e. 401k. The Federal Government wants us to save for our retirement (hint : don’t count on Social Security). As a general rule of thumb, the maximum amount the IRS allows a person to defer to a 401k plan is $15,500 and may go as high as $20,500 -- although many company programs may have lower thresholds. Although many of us do participate in such programs, our income limitations may not allow us to max out. So what we have here is an example of a good program that provides unequal benefits … but that is the way it goes.
Financial planners recommend deferring income recognition with the assumption that your income will be less -- as well as your overall tax rate -- during your retirement years.
To the Federal Government, they are willing to permit this, since eventually you will be paying a tax.

Now, here comes the Minnesota problem.
Minnesota mirrors the Federal Government deferral … but Minnesota is not guaranteed that you will be a taxpayer during your retirement years. Bill Cooper is no dummy and he is not alone. Some people permanently move out of state, while others maintain multiple residencies … but only one for tax purposes. Minnesota relies on a variety of taxes while other states such as Florida do not have a State Income Tax. Regardless if they are permanently gone or just “snow-birds”, Minnesota is being “legally” manipulated by the current tax law. And as a result, the tax burden is shifted to the current residents and depriving the government of revenue needed for the common good.

For someone in Cooper’s income bracket this can be a nice little windfall … as 401k plans have been around since 1978 … easily over $100,000 of deferred income ... that every year has been excluded by Minnesota and who now will never get any tax dollars. In fairness to Bill Cooper, this is a tax loophole that should have been corrected earlier ... in fact, I approached my former State Senator about this but he told me that he was retiring to Arizona so he could not help me. But every good legislation needs a snappy title ... so let's pay homage to the former head of the Republican Party in Minnesota and name it after Bill Cooper --- it will be a legacy that we'll all remember.

Here is the simple solution, when completing the M1 Minnesota Individual Income Tax form, simply include the income on line 3 of the form. Yes, that income will be considered in your reported income, but that’s fair for all of us. And since the tax was paid on the income already, your withdrawal would be tax-free.

And for the politicians that have taken a No Tax Pledge, this should not be a problem since this is not a new tax, nor an increase in tax rate … it is only a change in when it will collected (Remember when Property Taxes were due in November then got moved up fifteen days?).

Cooper complains of taxes but the problem is not taxes … the problem is the tax law writers. The problem with taxes is because of subsidies, credits and loopholes --- fairness is missing.

“The avoidance of tax may be lawful, but it is not yet a virtue. -- Lord Denning