Feb 12 Kelliher: Let's Use Tax Code To Pick Winners & Losers

In her op-ed in the Winona Daily News, Speaker Kelliher admits that her economic plan requires changing the tax code so that it picks winners and losers:

After last year's session, I convened a bipartisan task force to address job growth in the 2010 legislative session that would help position our state for potential future economic growth by focusing on bio business, construction and clean-energy jobs.

By admitting that, Speaker Kelliher is admitting that businesses that don't fit into those three categories will get hit hard by Minnesota's high marginal tax rates. What Speaker Kelliher doesn't say is why she won't cut taxes on all businesses. I'm betting that we won't hear that explanation anytime soon.

What we will hear alot of is DFL candidates playing the blame Pawlenty card:

I am focused on getting the economy working for Minnesota. I'm also focused on finding a way to get our state's budget back in line. Along with many other respected economists and former governors who have analyzed possible solutions to this problem, I disagree with Pawlenty that our state can get out of our budget crisis through cutting services and jobs alone.

I'm curious about a couple of things Speaker Kelliher said, starting with her saying that we can't get through this crisis by just cutting spending. Isn't that implying that, in her opinion, we need to raise taxes? Doesn't that means that the tax credits she's supporting will be 'offset' by other tax increases?

It's also curious that Speaker Kelliher talked about cutting services. Why doesn't Speaker Kelliher propose reforming the way government delivers mandated services? If she wants to avoid cutting services, shouldn't she be signing onto Steve Gottwalt's Healthy Minnesota Plan? After all, just applying it to a portion of Minnesota Care would save Minnesota's taxpayers $30,000,000 annually.

If Minnesota's tax code was competitive with other states, our economy would be much stronger. That alone would solve most of our budget problems. Another important step in making Minnesota prosperous is getting spending under control, something that the DFL hasn't shown an ability to do.

Another thing the DFL legislature hasn't shown a willingness to do is balance Minnesota's budget. The last budget they passed was the only budget that was scored as balancing. Even then, the 'surplus' was a meager $3,625 at the end of the biennium. That's what I'd call pathetic. The scary thing is, that's the best they can do.

If the DFL can't balance a budget, why should we let them pick winners and losers?

Comments welcome at LFR.