Where do Minnesota’s legislators stand on federal tax reform?
Congress resumes on September 5th. Representatives and Senators will have the opportunity to enact the comprehensive tax reform they have long talked about. But what should it include? In the Duluth News Tribune, some of Minnesota’s Congressional legislators offer their views
U.S. Rep. Rick Nolan, D-Minn.
“Tax reform must benefit the middle class, ensure that Wall Street millionaires and billionaires pay their fair share and stop incentivizing multinational corporations to move their jobs overseas. We can create millions of good-paying jobs by restoring a fair distribution of wealth. With more money in their pockets, working families boost our economy, buying homes, taking vacations, helping kids through college and saving for a secure retirement.”
Sen. Amy Klobuchar, D-Minn.
“As I travel across Minnesota I hear from businesses and workers that we need to work together on comprehensive tax reform to lay the groundwork for expanded economic growth across the country. If done right, we can close loopholes, bring back money from overseas to fund infrastructure projects here at home, give local businesses the ability to compete against out-of-state internet retailers and provide incentives to keep jobs in America.”
Sen. Al Franken, D-Minn.
“I will be in communities across Northeast Minnesota this week to meet with businesses, local officials and community leaders about the issues they care about. And I know that one of the main topics of conversation will be tax reform — and for good reason. Like me, they believe the economy needs to work better for all Minnesotans, and not just for those at the very top. And one way to take steps towards that goal is to pass a bipartisan tax reform law that works for our local businesses and keeps more money in the pockets of middle-class Minnesotans. I look forward to talking with community members across the region about what they want to see in tax reform, and I plan to take what I learn and bring it to Washington as we begin the tax reform debate.”
There are some interesting points here, not the least of which is Sen. Klobuchar channeling her inner Trump with a bit of Amazon bashing.
First, Rep. Nolan says the new tax code will have to “stop incentivizing multinational corporations to move their jobs overseas” and Sen. Klobuchar wants it to “bring back money from overseas”. Can we assume from this, then, that we have votes here for a drastic reduction in the federal corporate tax rate, the highest in the developed world? Let’s hope so.
Second, Rep. Nolan says “Tax reform must benefit the middle class” and talks about working families “With more money in their pockets…buying homes, taking vacations, helping kids through college and saving for a secure retirement”. Sen. Franken says he wants to help “pass a bipartisan tax reform law that…keeps more money in the pockets of middle-class Minnesotans” The best way of putting money in the pockets of the middle class is not to take it out in the first place. Is this support for cuts in income tax rates? Again, let’s hope so.
Third, there is no talk from any of them at all about spending cuts. In its outlook for 2017-2027, the Congressional Budget Office estimates that “If current laws remained generally unchanged, deficits would follow an upward trajectory over the next decade, driving up federal debt”. Deficits and debt will rise even if things stay as they are. If Rep. Nolan and Sen. Franken are serious about relieving the tax burden on middle class Minnesotans, they will need to get serious about reining in federal spending.
Fourth, one way to help the middle class would be to boost economic growth. That should be a priority for legislators. But Rep. Nolan, Sen. Klobuchar, and Sen. Franken seem more interested in dividing up the amount of wealth there is than in increasing that amount. The trouble is that the generation of wealth and the distribution of wealth are not separate things. They are, in fact, parts of the same economic process. In ignorance of this, policymakers frequently think that that they can divide wealth as they wish with no effect on its production. This is a mistake. If our legislators make this mistake, middle class Minnesotans will be among those paying the price.
John Phelan is an economist at the Center of the American Experiment.