Up here in the state that's probably going to give Al Franken (!?!?!?!??!) a senate seat, atleast some knows what they are talking about.
With Minnesota facing huge budget problems, Gov. Tim Pawlenty on Thursday proposed a counterintuitive solution: Cut business taxes.
In his seventh State of the State address to a joint session of the Minnesota House and Senate, Pawlenty called for a smorgasbord of tax breaks designed to cut the costs of doing business in the state.
"Minnesota has to come to grips with this fact: In 2009, it costs too much for employers to create and keep jobs in this state," he said. "If we want to build up employment, we need to bring those costs down."
Calling his plan the "Minnesota Jobs Recovery Act," Pawlenty proposed cutting the state's business tax rate in half — from the current 9.8 percent to 4.8 percent — over six years. He also put forward a series of tax breaks to spur small-business expansion.
While Washington is sending billions of dollars to Wall Street, he said, "Here in Minnesota, I want us committed to helping Main Street."
As much as I'm not a big fan of the governer, this is the kind of stuff we need to turn the state around. Of course, the libs aren't too happy:
Senate Majority Leader Larry Pogemiller, DFL-Minneapolis, noted federal tax cuts for business have been a "failed strategy at the national level."
Pogemiller's about as left-wing as you can get, and he will do whatever he can to prevent this.
Pogemiller said he had expected an "uplifting speech on the need for shared sacrifice" to balance the budget.
But Senate Minority Leader David Senjem, R-Rochester, described the speech as "courageous, inspiring, maybe I'd even use the word revolutionary ... in terms of business climate."
During the speech, Republican lawmakers applauded enthusiastically while DFLers mostly sat on their hands. Senjem said that signaled a new level of "hard partisanship" absent from earlier budget talks between the governor and DFL leaders.
All democrats ever want to hear about is "self-sacrifice". I don't think they ever want anything to get better, but then again, they're democrats.
The plan really is brilliant, here is how the Pioneer Press layed it out:
Cutting the business tax rate in half would "take us from having one of the worst business tax rates in the country to having one of the best," Pawlenty said in a 40-minute speech that was interrupted by applause 29 times.
In addition to the rate cut, he proposed:
$50 million in small business tax credits that he said would spark $100 million in new investments. A 25 percent refundable tax credit for small-business owners that reinvest in their firms quickly. A capital gains exemption for qualifying investments in small businesses. A 100 percent, upfront exemption for the sales tax businesses pay on equipment, "eliminating the need for a bureaucratic rebate," he said.
Allowing businesses to deduct the cost of equipment purchases in one year instead of depreciating it over several years.
I really hope he can pull this off, right under the democrats in the legislatures noses'.
Pawlenty said he would slash state aid for cities and counties. To offset that loss of funds, he advocated eliminating or reducing as many state mandates on local governments as possible.
But then he proposed what Pogemiller called "the mother of all mandates" — a pay freeze for any city, county, township or school district that accepts state money.
"The state of our state is challenged," Pawlenty said, "but overcoming challenges is what Minnesota does best. So let's get at it."