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 Rated Top Impact Congressman – Could Sarvi Be Next ?

Those of us in the First District have seen how Congressman Tim Walz operates --- over a dozen formal listening sessions to discuss the Farm Bill, many more sessions addressing veterans issues, seniors issues, health care, and the economy and too many to mention “Hy-Vee” grocery store “constituents meetings” throughout the First District. No doubt that has left an impact on how voters will rate the Congressman’s performance in November’s elections, but the impact that is truly being felt is Walz’s impact on the national agenda.

How Walz has voted on various issues is in stark contrast to the First District’s former Representative Gil Gutknecht. Gutknecht was a “RoveRobot” voting however the Party managers instructed. Walz, on the other hand, has not been afraid to bolt from his Party Leaders … most recently on the FISA vote and Iraq Supplemental.
It’s that contrast that earned Walz the top ranking.
It’s not about Party loyalty … it’s about your conviction to the issues.
Party bosses may compromise for expediency sake, but if you are committed to a progressive, responsible government, you bolt the party.
While some voters based their votes based on Party endorsement, I am an independent who votes on my issues --- a fair tax policy, a fiscally responsible budget that does not burden the next generation, a foreign policy that embraces dialogue not sanctions, a health care system that benefits people not investors in the medical industry, etc.
Essentially, a progressive responsible government.

Recently, a study was done that looked at the impact of the change caused by the 2006 elections. Walz’s progressive, responsible votes were contrasted with Gutknecht’s faux-fiscal conservative, Bush-backing votes and the difference was the largest in all the comparisons from the 109th to the 110th Congress. That doesn’t mean that the First District is the most liberal in the America; instead, it illustrates how “conservative” Gutknecht voted versus moderate Walz.

It’s that change that can cause real impact in the direction of the government. The underlying premise in Boots On commentary to throw Norm Coleman under the bus, is that Coleman is not in sync with the Conservative ideology and that Al Franken would have no more of an impact than Coleman. Much the same as when Keith Ellison replaced Martin Sabo, the votes would have been the same.

That’s where Steve Sarvi comes in.

Walz’s efforts for a more responsible government are impacted by the hardcore Conservatives like John Kline. Based on the same analysis tools cited above, Minnesota’s Second District is rated as the tenth most impactable. The fact that it rated 10th is insignificant, since the question has to be factored in whether the underdog can actually beat the incumbent. For example, the highest ranked impact election involves Orange County Dana Rohrabacher (R-CA) seeking his eleventh term. And based on primary voting and previous elections, it seems to be a Solid Republican District. Now, Kline on the other hand is seeing a district that is moving away from embracing the Conservative agenda and toward a progressive approach to government.

The best way to help Tim Walz move the country in a more responsible progressive way is to help Steve Sarvi unseat John Kline. Walz has demonstrated leadership and resolve on many issues, but he needs more like-minded responsible progressive to join him in representing Minnesota and the nation.

Politics Trumps Governance UPDATE : Republicans Delay (?) Earmark Proposal

I know I should lose some weight, exercise more and eat healthier, but why start now ?
I thought about maybe a New Year’s resolution, but why commit to that now ?

Following up on earlier commentary, The Hill reports “The Senate Republican Conference will wait until at least July to consider long-awaited reforms to the earmarking process.”
From January to April to June and now til July – more proof that the GOP realizes that there are problems with “pork-barrel projects” but that “pork-barrel projects” may be beneficial for re-election purposes. They can blame it on “the heavy business awaiting Senate action before the Fourth of July” (funny, but Bush warned us about the dangers without his FISA bill, but that vote won’t be until July 8 even though the Senate voted overwhelming to move to final vote … what is the Senate working on?), but since the “earmark” proposal has been pending for so long, they just don’t want to address it before November's election. The fact is that the Senate is in the middle of the Appropriations review process (the HHS-Labor-Education, Commerce-Justice-Science, and Homeland Security budgets are done but the DOD mega-budget and others are in review).
Why don't they admit it, they don’t want to operate under any scrutiny now.
Under existing procedures, things can be done. For example, remember the Farm bill and how Republican Minority Leader Mitch McConnell included $60 to $70 million in tax breaks for the horse racing industry. His authorization would be deemed by most as “pork-barrel” spending.

Minnesotans can tell the difference between “pork-barrel projects” and a justified “earmark” … just ask any of the Minnesota county engineers who say that 70% of the Minnesota’s roads and bridges are worse off than they were ten years ago.

Let me be clear, earmarks are not implicitly bad.
We need transparency and agreement between state and federal governments on which projects are best needed.
That takes leadership.
Good leadership is exemplified by First District Representative Tim Walz (D-MN) and 45 other Representatives who have embraced transparency.
But the “political” fears of acknowledging “earmarks” is impacting good governance.
Poor leadership (is that an oxymoron?) is exemplified by Governor Tim Pawlenty (R-MN).
Read the letters between Fourth District Congresswoman Betty McCollum (D-MN) and the Governor over “acknowledging” $165,000,000 worth of earmarks that the Pawlenty administration requested from her office for FY2009 authorizations. The projects being discussed include transportation projects and federal funding for the Minnesota National Guard.


Transparency and common sense spending is at stake … not political points to be used in election year campaign speeches.

In an Obama Administration Will Republicans Defend Article 1 ?

This election season has brought attention to what is being worn – or not worn – on a candidate’s lapel.
Have you noticed if your Congressman(woman) is wearing an “Article 1” button ?

There has been a movement for members of Congress to take a pledge to be “pork-free” and in Minnesota there are currently two of the 46 who have sworn off earmarks – that would be Congressman John Kline (MN-02) and Congresswoman Michele Bachmann (MN-06).

As a fiscal conservative, I applaud the effort to eliminate “pork-barrel” projects, but there is a vast difference between “pork-barrel” spending and “earmarks”.
What Kline and Bachmann are doing is shirking their Article 1 responsibilities and allowing the Executive Branch the power to spend funds as they deem appropriate.

Congressman John Yarmuth (KY-03) is reminding his colleagues of their Article 1 duties by offering lapel buttons. It may seem to be purely for show, yet the message is clear … Congress authorizes the monies. Note specifically Section 8 and a couple of the important passages “The Congress shall have Power To lay and collect Taxes, …” [snip] “To establish Post Offices and Post Roads …” [snip] and Section 9 “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law;” [snip]

Minnesotans know all to well of the conditions of our roads and bridges … ( I-35 Bridge is not the only problem … Kline’s district has the Hasting bridge and Bachmann’s district has the DeSoto Bridge). Without someone advocating earmarks for those repairs, other Congressman’s projects will be funded first.
First District Congressman Tim Walz has the right approach “Minnesota sends more money to Washington that it gets back, and it’s appropriate for us to advocate for the good use of tax dollars (in the district.)”
All Minnesotans need to be concerned about this as the State’s ability to attract and maintain businesses is predicated on its physical infrastructure.

And in 2009, when the next Congress convenes, there is a bigger problem. The Highway Trust Fund (HTF) is projected to have a deficit of as much as $5 billion. As a result of how highway projects are funded, this could mean a one-third reduction of highway and transit spending. That deficit will be compounded even more as the cost of gasoline has resulted in a drop in miles traveled … the driving milage drop has only exacerbated a problem, not created it. The HTF is funded almost exclusively by the 18.3 cents per gallon taxes paid on gasoline and 24.8 cents per gallon tax on diesel by the nation’s drivers and truckers. So will Congress use it’s Section 8 responsiblities and increase taxes to fund these need investments … and will the Minnesota delegation have members that make sure we get our monies returned back to the State?

Earmarks are not the problem … “pork-barrel” projects are.
With the projected shortfall and the increased needs, do you want the next President to decide how monies should be spent ? Those members of Congress that sign the “earmarks” pledge are not being responsible or responsive.
As voters evalute incumbents, they should look for the “Article 1” button and ask them if they are willing to embrace transparency in earmark funding. If so, they should get your vote.

Will John Kline Lobby Norm Coleman on Earmark Proposal

Have you made your 2009 New Year’s Resolution yet ?

Well, according to The Hill, the Senate Republican are scheduled to discuss a conference-wide rule change and policy statement regarding earmarks on Tuesday.

So, will John “Pork-Free” Kline lobby Norm “Minnesota’s $10,780,000 Man” Coleman ?
Will it make any difference ?

Well, first of all, the changes would take effect the first day of the next Congress. This is not the first time Republicans have tried this joke before as some Republicans called for a six month moratorium on earmarks … what a joke … we have a Fiscal Year … all the money gets authorized at year end, so what would 6 months due ?

This meeting is a result of a meeting at the beginning of the year which was reported by Roll Call.
Senate Republicans outlined a modest election-year agenda Wednesday based on the cooperative, bipartisan approach that new Republican Conference Chairman Lamar Alexander (Tenn.) has pushed while avoiding issues like immigration and earmark reform that have caused rifts within the party.
[SNIP]
Republican leaders … made it clear during the retreat that they would not support any effort by President Bush to strip earmarks from this year’s omnibus bill and saw no need to overhaul the practice … arguing any move {by Bush} to eliminate the earmarks would be an inappropriate infringement on Congress’ authority to appropriate funding.
[SNIP]
A Senator attending the retreat said later, "to the extent that the floor was open I didn't hear much opposition... I kept expecting to hear someone say 'yeah but earmarks are evil,' but I didn't."

Also, The Washington Examiner writes
“House Republican Whip Roy Blunt R-MO, has reportedly warned administration officials that meddling with earmarks will anger GOP members who are responsible for 40 percent of those in the 2008 spending bills.”

Republicans, based on their votes and comments by party leaders, are not serious about ending the use of earmarks.
And they shouldn’t.
All earmarks are not pork barrel spending. Without earmarks, the Executive Branch can spend funds as they deem appropriate.
For example, Office of Juvenile Justice and Delinquency Prevention which issued grants to youth golf programs and other projects--often run by administration cronies.
Or, the $350 to $500 million spent on Al-Hurra -- "The Free One" –US sponsored Arabic television.
Or, even $2.4 million for COMIC BOOKS !

There are plenty of “projects” that should be carefully reviewed, that’s why transparency and accountability are important.

The Republican Senators policy change is just an election year campaign trick to garner some media attention … and like many New Year’s Resolutions will be long forgotten by mid-2009.

John Kline’s pork-free diet has only cost the State getting a fair return on the monies that Minnesota taxpayers have sent to Washington.

MN-02 : Does John Kline put his money where his mouth is ?

Republican Congressman John Kline (MN-02) wrote “Some say America has an addiction to oil. What is abundantly clear is our addiction to foreign oil, which is not only an economic issue but also a national-security concern.”

This view is echoed by Republican-endorsed First District candidate, Dr. Brian Davis with the warning that “If you’re like me, knowing that our economy is partly dependent on countries like Venezuela, Nigeria, and Saudi Arabia is troublesome. Just imagine the potential disastrous consequences if several of these countries were to cut off our supply of oil.”

For these Republicans, the message being sent is that America is in peril as too much of our oil comes from countries whose governments may not be reliably friendly to the United States.

Interestingly, MinnPost reviewed the Financial Disclosure statement of these candidates and reported
“Rep. John Kline reported assets between $253,000 and $720,000, including a Russian investment fund valued between $1,000 and $15,000.

Dr. Brian Davis, who reported a salary of $411,720 in 2007. His wife also received a salary from the Mayo Clinic totaling $52,009.31 in 2007. Davis holds between $2000 and $30,000 in Pfizer stock. Overall, his assets total between $244,000 and $710,000.”

Dr. Davis owning stock in a US headquartered pharmacetical company would not be surprising. Many people’s investment strategy is based on Peter Lynch’s principle of investing in companies that are intimately familiar.

But why would John Kline make an investment in ING Russia Fund ? The ING Russia Fund is composed of 47.8% investment in the oil and gas industry. Once again, many people’s investment strategy includes global investments … not a bad strategy considering the weak US dollar. But Russia ? An investment that is tied exclusively to a single country ?

Admittedly, Russia is not officially in the “Axis of Evil” but since Kline likes to remind voters that during the Cold War, he carried the “nuclear football” that contained the President's launch codes used for nuclear attack, it is surprising that it is where he would make a direct investment.
Yet, he did.
On September 12, 2006, Congressman Kline sold two mutual funds and purchased a number of other funds including the ING Russia Fund.
Once again, a good move to re-position your investments.
But why Russia ?
The dollar amount of his investment is immaterial, it's the message that he values investments in Russia over US or other countries.

Russia and America have a number of disagreements – from the US plans to deploy interceptor missiles in Poland and a radar system in the Czech Republic to Russia’s stance at sanctions against Iran.
Yet, Davis’ warning has been used by Russia. Moscow's sudden cut in gas to Ukraine this winter was Russia using energy as a lever, a weapon or, in Vice President Dick Cheney's words, "a tool of intimidation and blackmail".

It's not just Saudi Arabia that supplies America's oil --- many countries do. As Mexico's productions slow, Russia has increased its shipments to America. What they do with American dollars could be what Congressman Kline means when he raises the fears of "a national-security concern.”

I ask again, WHY does John Kline wish to invest his money in Russia ? It’s his right, but quite surprising.

Then again, maybe Kline is planning for his “retirement years.” After all, as the Rochester Post Bulletin reported on November 28, 2007, former First District Congressman Gil Gutknecht “ serves as a consultant or is involved with six different companies, he said. He is also involved in conducting market research in Russia and drops hints about an energy deal in the works that could make headlines in the Wall Street Journal.” Ah, I guess there is always a career for Congressman after they leave office.

I suppose the lesson is that we should consider diversifying our portfolio from American companies to the ING Russia Fund. After all, Congressman Kline is an advocate of privatizing Social Security, so maybe it’s follow the leader time.

And a sidebar comment about Dr. Davis.
Voters, such as me, must wonder why someone would want take a pay cut of over $240,000 ?
Will he work for Middle Class working families or vote to maintain low tax rates for the doctors and others in the "country club crowd" ?
Would his votes embrace PAYGO, as Congressman Tim Walz advocates, or will his votes reflect increasing the national debt ?

Want Lower Prices ? Reduce the Ethanol Tariff !

Watching the devastation impacting farmlands in Iowa and the surrounding states is a stark foretelling that food prices will increase.

The Bureau of Labor Statistics released CPI data for the first quarter of this year showing food and beverage prices rising at an annualized, seasonally adjusted rate of 5.1 percent.
“Federal food-to-fuel mandates have led to over one quarter of corn to be diverted from food to ethanol production, driving up the price of corn and other commodities to historic highs,” was the immediate reaction from Scott Faber, vice president for Federal Affairs at the Grocery Manufacturers Association. “These rates will only increase following the USDA’s report that farmers will plant less corn in the coming year. Before these effects spread further across our economy and around the world, Congress should take immediate action by revisiting food-to-fuel mandates.”

Faber’s assertions can be debated, but with Congressional mandating the use of ethanol, there is a demand yet the cost of corn is actually delaying the opening of two brand new VeraSun facilities in Welcome MN and Hartley IA. Clark Fredericksen said "I think the ethanol industry, as a whole as some of these new plants come on are going to look at whether the margins are profitable enough to start right now, at the price of corn, or would they be better off, cost effective to delay them, until the price of corn eventually does come back down."
That’s millions of gallons of ethanol that these facilities may not produce this year … as well as jobs.

Congress’ ethanol mandate impacting prices has been a concern since First District Congressman Gil Gutknecht was promoting his 10/10 Act (10% ethanol by 2010). I contacted Gutknecht suggesting that H.R. 4409 The Fuel Choices for American Security Act of 2005 seemed to be a better bill. Included in H.R. 4409 was a 10 % ethanol requirement with a deadline of 2015, but also many more provisions; such as vehicle efficiency improvement, promoting hybrid technology, and requiring a 20% petroleum reduction by 2015 for vehicles used by federal agencies. H.R. 4409 had a broad group of 83 co-sponsors including many fiscal conservative members. Gutknecht wrote me that he has concerns with H.R. 4409 since it would repeal the tariff on imported ethanol. We do not want to be replacing foreign oil with foreign ethanol. I believe we should produce as much ethanol domestically as possible.

Despite all of Congress’ efforts, ethanol domestic production is struggling.

Since Congress has enacted mandates, foreign markets may be part of the answer. Unfortunately, foreign ethanol is subject to a 54-cents-per-gallon tariff and a 2.5 percent duty.

Ben Lieberman of the Heritage Foundation wrote “Consumers would benefit if the market—not special-interest politics—decided how much ethanol to use and where it should come from. ”

May I remind everyone that is advocating drilling in ANWR or the Outer Continental Shelf (OCS) that those projects will take years (maybe decades before meaningful production is achieved) but eliminating the ethanol tariff could impact supply and prices immediately … plus allow more corn to be used in foodstuff.

The efforts to make America “independent of foreign producers” should be a grave concern to all free market advocates and a trend toward an Isolationist Worldview and that is troubling in a global economy.
George Bush warned during his State of the Union address that “America rejects the false comfort of isolationism.
Isolationism would not only tie our hands in fighting enemies, it would keep us from helping our friends in desperate need.
In a dynamic world economy, we are seeing new competitors, like China and India, and this creates uncertainty, which makes it easier to feed people's fears. So we're seeing some old temptations return. Protectionists want to escape competition, pretending that we can keep our high standard of living while walling off our economy. … We hear claims that immigrants are somehow bad for the economy -- even though this economy could not function without them. (Applause.) All these are forms of economic retreat, and they lead in the same direction -- toward a stagnant and second-rate economy.

We need to remember that Canada is America’s leading importer of crude oil. Mexico is number three. With Iraq as number six, the question begs to be asked: Why are American troops in the middle of a civil war to determine the future of Iraq yet some people are advocating that America become "oil independent"? How will the Iraqi economy advance, if America is not an active trading partner?

In the world economy, remember the words of Baron de Montesquieu who wrote in his 1748 work, The Spirit of the Laws, “Peace is the natural effect of trade. Two nations who traffic with each other become reciprocally dependent; for if one has an interest in buying, the other has an interest in selling: and thus their union is founded on their mutual necessities.”

Closing our ports to foreign trade will hurt America in the long run.