The Free Press, Mankato, MN

Election 2010

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March 7, 2011

Our View: Tax breaks are part of budget problem

The Free Press

The divergent views of DFL Gov. Mark Dayton and Republican lawmakers are the focus of attempts to close a $5 billion budget gap with Republicans saying they will steadfastly oppose Dayton’s proposal to raise taxes on the wealthy.

Despite that apparent standoff, hopeful signs of bipartisanship can be found when it comes to taxes.

Rep. Ann Lenczewski, DFL-Bloomington, and Sen. Julianne Ortman, R-Chanhassen, are leading an effort to reform the tax code to increase revenues and remove questionable tax breaks.

Lenczewski, who sits on the House Taxes committee, and Ortman, who leads the Senate Taxes committee, are finding common ground on doing away with an array of tax credits.

Speaking to Minnesota Public Radio News, the two noted an abundance of dubious tax breaks aimed at prodding people to take certain actions, such as deductions for people who buy long-term care insurance or farmers who test their livestock for certain diseases.

There is also a host of sales-tax exemptions and other deductions and credits for virtually every group imaginable.

Ortman also has the courage to publicly say what many Republican lawmakers won’t: Tax breaks and tax cuts are effectively the same as spending.

The result of eliminating many exemptions while lowering overall tax rates would bring in significantly more tax revenue.

It’s a Ronald Reagan-style approach that can satisfy both parties: It increases revenues that Dayton and DFLers see as vital while Republicans can support the lower overall tax rates and tax simplification.

As Reagan found, it’s difficult to do. Every special interest that benefits from a tax exemption will fight mightily to keep it. Still, with the massive budget shortfall, legislators may be more willing to stand up to that special interest pressure.

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Election 2010