Category Archives: Taxes

Fan mail from some Flounder

This was just the front of the envelope.

I haven’t opened it yet but I suspect there will be no return address. Well, anonymous says we are in a fascist state. He’s just lucky the Post Office’s letter carriers didn’t turn him in to Obama’s Gestapo.

Ah, an enclosure has a quote from George Orwell:

“The further a society drifts from the Truth, the more it will hate those that speak it.”

Well the anonymous letter writer certainly hates Obama. Hmmmmm!

He/she sent me three pages of “Obamascare” tax hikes that a John Kartch posted on the Internet.

Chamber of Commerce bites its own butt

My continuing meditation is still on hold while I soak up some serious Chicago. However, while I’m trying to keep non meditation posts in abeyance I really couldn’t help but comment on this story in today’s DNT.

One of the chief beneficiaries of the Red Plan, the realtor for F.I.Salter, comments with concern about unexpected property tax increases.

Looking at seven to eight properties his firm manages in Duluth, Sandy Hoff, president of F.I. Salter Co. Inc., said their assessed values have remained steady, but his tax bill has increased by about 5 percent across the board.

“That creates a challenge for us as property managers,” he said, explaining that it’s difficult to pass on those expenses to tenants who are already struggling.

“I’m not against the park and library referendum; I think they will do nice things for our community,” Hoff said. “But we need to be very mindful when we have 5 percent increases like this. They can’t continue. We need to reel in the cost of government so it’s in line with inflation.”

He noted that next year’s property taxes look likely to grow at about double the rate of inflation.

I did not follow the state’s recent changes to property tax collections but according to the story they were significant:

The state stopped paying down property taxes for qualifying residents and instead ordered local governments to exclude a portion of a home’s value from taxation. The exclusion program can lower, for taxation purposes only, a property’s value by as much as $30,400 for a $76,000 residence. The more a home is worth, the smaller a break it receives. The exclusion disappears altogether for houses worth $413,800 or more.

The switch to an exclusion program reduced local tax bases, leading to double-digit tax rate increases last year in St. Louis County and around the state.

Dicklich said the homestead changes had an especially large impact in St. Louis County, where relatively few residences are expensive enough to be ineligible for an exclusion.

The close to half billion cost of the Red Plan has thus shifted more heavily to commercial properties which have none of these recent exclusions.

There is some justice in this because residential property taxation is extremely regressive meaning that poor homeowners pay relatively more than rich homeowners or businesses. For a long time the state’s Chamber of Commerces have lobbied to lower commercial property taxes. These new state laws have inflicted serious taxation on Duluth properties which have been affected by the near half billion Red Plan costs which were strongly advocated by the local Chamber of Commerce. its called Poetic Justice.

What we spend on things

Here’s an interesting graphic using Census Data:


The grapic on the original site can be hovered over to get more detail. I found it interesting that in 1947, three years before I was born, 11% of consumer spending went to “government. Today’s figure is 13%. RUN AND HIDE EVERYONE!

After the Cold War, the Federal Highway’s program, the Great Society and Medicare that seems pretty modest. I’m sure its more complicated than that. For instance, how much of “medical” spending is on Medicare?

Soul searching at night

Its not quite eleven pm. I was putting the throw rug, now dry, back on the basement floor. While doing that and sweeping up the ceiling off the floor I watched the opening of SNL. It was a groady skit about a couple groady adults attempting to relive their groady teenage experiences. It was a reprise of some characters that haven’t been around for a while because the cast members have gone on to other things in life.

Having just watched a decade old film that I’d always heard was fun, The Truth about Cats and Dogs, the evenings expectations had been raised to high to sink to what promised to be a less than stellar SNL.

I’m not sleepy even though the day has seemed quite long. Two hours of mad mopping left me tired the rest of the day. I got a two-hour long reprieve when one grandson took a nap and the other went with his Grandmother to the latest Chipmunk movie. Chipwrecked is getting lousy Rotten Tomatoes scores but as Grandma said, she was taking a four-year-old to see it not a critic.

So, no soul searching yet. I’ll move on. Continue reading

Chickens coming home to roost

Today’s Trib was non-stop coverage of a failing school district. I hardly know where to begin except to say that it all began with a vile abuse of trust.

I don’t think the Dixon remnants know how to communicate honestly any more. Its the old story I always give for sticking to the truth – I’m not smart enough to remember my lies. Neither is the District and with the smooth talking Dixon gone none one is left who can soft soap the DNT’s editorial board.

Art Johnston will be made out to be a boogeyman for saying the District’s figures are a sham but the District hasn’t made much of dent against his arguments. Even the Trib’s Education reporter had to say that many of the disagreements between Art and the District can’t even be compared. The two claims he has made that can be measured against each other do suggest that the District is providing self-serving data. 1. That the District has repeatedly exaggerated the cost of inflation and 2 That while the District has made “$24 million” in cuts in recent years that hasn’t actually meant less spending.

Point 2 is pretty bad for the District. What makes it worse is that our District is still spending about the same amount of money it did five years ago despite losing 2,000 students or just under 20% of its students during that time period. Presumably that should mean even more spending per child today and yet the classrooms are far more crowded than ever.

My guess has always been that this is a result of operational money going to pay off Red Plan debt but the District keeps denying this. Where has the money gone then? They’ve got the same money. They’ve got 18% fewer students. But classes bursting through the walls. A healthy dose of truth, no matter how embarassing, is very much in order. Don’t bank on ever getting it from the Dixon crowd.

I’ve said before that I plan to vote “yes” on all three levels of the proposed levy. The District and our kids need the revenue. My prediction is that the District will never see a dime of it. Why?

Throw in the loss of the homestead credit. Throw in a near certain 4.9% school district tax increase that can’t be prevented by referendum and an uncommon City referendum asking for more. Throw in great uncertainty over the European Common Market……. Well. you get the idea.

And by the way, I sort of agree with Frank Wanner that GOP Rep. Garofalo has declared war on our children. They say it takes one to know one. I can’t, however, explain why Frank has such a high opinion of Keith Dixon.

Income tax history lesson

Damn RINO’s:

The income tax was dead. But the pressure to tax the incomes of the largely untaxed rich only increased, especially as the Progressive wing of the Republican Party grew in strength under Theodore Roosevelt. By the time of the administration of President William Howard Taft (1909-13) the pressure was becoming overwhelming. One representative suggested simply repassing the 1894 tax bill and daring the Supreme Court to overturn it a second time.

Read John Steele Gordon’s whole column in the WSJ.

Good luck…

…figuring out how this will affect your property taxes. It comes from Minnesota Public Radio.

The DNT reported a while back that losing the homestead tax credit would cost Duluthians on average a 5.7% tax increase. That doesn’t include what the City of Duluth or the County or the Duluth School District or voters on a proposed operational tax levy increase in a coming referendum will do to bump up our taxes.

You can see what would have happened in Duluth last year if the Dayton GOP legislative agreement had gone into effect by looking at this. Its a 900 page pdf that won’t easily transfer to the blog here without a lot of tinkering that I don’t have time to do for you, my dear readers. Page toward the end of the alphabetically listed Counties to St. Louis. Duluth is the last entry under St. Louis County.

“I didn’t raise taxes. I didn’t raise taxes.” [BIGOT ALERT]

I love Steve Lindstrom cartoons in the Trib. His is a very stripped down strip. No clutter just simple visual metaphors. Today’s was another smart strip which I regret the Trib does not feature on its website for me to link to.

It was about the recently chopped up homestead tax credit which I’d forgotten about when I blogged about the costs of school operating levies yesterday. I’d forgotten, because its hard to keep up with the GOP these days. Republicans took it away and poor homeowners will be hit particularly hard leading to a 5.7% increase in Duluth Area property taxes. This at a time when the County is bumping up its property taxes and the School District is asking the state to grant it a $15 million increase in Red Plan – with no vote of course, although the School Board will be asking voters for additional operating levies in a referendum.

Lindstrom’s cartoon showed a cursing homeowner perched on his home’s roof watching as a smug Elephant, Republican legislators, walks away with his ladder labled “homestead credit.” The Pachyderm is repeating to himself, “I didn’t raise taxes.” It was ludicrous as a surgeon assuring himself that he didn’t make a patient limp by amputating his leg.

Andrew Sullivan asks…

who owns the debt?

Jason Peters relays facts collected by Harper’s Index:

— Seventy-one percent of current U.S. debt was accumulated during Republican presidential terms.

— Two-thirds of debt-ceiling elevations since 1960 have been signed into law by Republican presidents.

— In 1961 the percentage of corporate profits paid in taxes was nearly forty-one; now it is less than eleven.

— Seventy-five percent of the increase in corporate profit margins since 2001 has come from depressed wages.

A useful article on how school operating levies are levied

A friend sent this story to me about the Perham School district’s levy referendum. Its mostly correct and I suspect much of what it says is based on state laws and would relate to Duluth as well.

It mentions that some kinds of “post secondary residential” properties are not taxed. If that’s so I’d be curious to know if that is a statewide exception or one that only applies to Ottertail County. Duluth has a lot of housing that might be described that way. I presume that single family homes that have become rental residences would be subject to school operating levies although only at the lower homesteaded rate (as second homes.) I’d guess a lot of the Duluth housing along Rice Lake Road for college kids might be exempt but I don’t know for certain. Sorry, I’m not going to research it.

The story did get one thing wrong. I wrongly presumed that this explanation covered a “progressive tax.” It doesn’t.

The Perham-Dent levy would cost $105 per year for properties worth $100,000, with that amount progressively rising as the market values increase – up to $948 per year for a $900,000 property.

In this example every $100,000 of value has the same flat $105 tax applied to it so that $900,000 in value would result in taxes of 9 x $105. In a real progressive situation there would be an increase in the property tax rate as the value went up. For example, at a $500,000 valuation the tax might go up to $125 for every additional $100,000 of valuation over $500,000. That would be a “progressive” jump.

Minnesota property taxes used to be like that meaning that more expensive homes were taxed at higher rates. I wish it would come back. I suspect that a lot of folks in big Duluth houses were for the Red Plan and I’d like them to be pulling a heavier load.

Saving a million over a lifetime vs. earning a million a year [BIGOT ALERT]

I can’t find the Trib’s story on American’s giving up hope of becoming millionaires on the DNT website but this seems to be it.

While the GOP is hyperventilating about Obama stiring up class warfare I’d like to once again note that saving a million dollars over the course of one’s lifetime (which makes one a millionaire) falls far short of earning a million bucks a year. According to this story there are currently 5.2 millionaires in America. That is a far cry from 5.2 million American’s earning a million each year. Those are multi-millionaires. Obama is only going after them for taxes. If he can raise $1.5 trillion from them I say go for it.

Pretty soon we may have to rephrase that Biblical story to make it about a Republican getting to heaven being as likely as a camel passing through the eye of a needle.

on taxing millionaires the way the rest of us are taxed [BIGOT ALERT]

As the GOP rushes to defend lower tax rates on millionaire “job creators” I can’t help but think about a half a dozen job creators I’ve talked with over the years who are busy making jobs in China because the Chinese can manufacture so much, so quickly and so cheaply. I’m pretty sure that Bernie Madoff, in his prime, would have appreciated Republican support as well plus all the well connected white kids who got generous scholarships to study at the Ivies on their way to becoming job creators. As for Pell Grants for everyone else. Not a big GOP priority.

The poor are not created equal

From Jim Fallows Re: Today’s GOP:

“Not created equal” is exactly right. In fact, payroll-tax cuts are the sort of tax break most likely to “get the economy moving again” during a recession. (Because they put money in the hands of people most likely to spend it and therefore boost other businesses. And on balance they lower the cost of adding new workers.) Income-tax breaks at the top end are least likely to create new demand or jobs. (Because they go to people who have a lower “marginal propensity to spend” and are more likely to park the money in the bank.)

I had thought that Republican absolutism about taxes, while harmful to the country and out of sync with even the party’s own Reaganesque past, at least had the zealot’s virtue of consistency. Now we see that it can be set aside when it applies to poorer people, and when setting it aside would put maximum drag on the economy as a whole. So this means that its real guiding principle is… ??? You tell me.