This Billionaire Governor Taxed the Rich and Increased the Minimum Wage —

[GMDino]

 — Now, His State’s Economy Is One of the Best in the Country


http://politicsbreaking.com/billionaire-governor-taxed-rich-increased-minimum-wage-now-states-economy-one-best-country/

Quote:The next time your right-wing family member or former high school classmate posts a status update or tweet about how taxing the rich or increasing workers’ wages kills jobs and makes businesses leave the state, I want you to send them this article.


When he took office in January of 2011, Minnesota governor Mark Dayton inherited a$6.2 billion budget deficit and a 7 percent unemployment rate from his predecessor, Tim Pawlenty, the soon-forgotten Republican candidate for the presidency who called himself Minnesota’s first true fiscally-conservative governor in modern history. Pawlenty prided himself on never raising state taxes — the most he ever did to generate new revenue was increase the tax on cigarettes by 75 cents a pack. Between 2003 and late 2010, when Pawlenty was at the head of Minnesota’s state government,he managed to add only 6,200 more jobs.

During his first four years in office, Gov. Dayton raised the state income tax from 7.85 to 9.85 percent on individuals earning over $150,000, and on couples earning over $250,000 when filing jointly — a tax increase of $2.1 billion. He’s also agreed to raise Minnesota’s minimum wage to $9.50 an hour by 2018, and passed a state law guaranteeing equal pay for women. Republicans like state representative Mark Uglem warned against Gov. Dayton’s tax increases, saying, “The job creators, the big corporations, the small corporations, they will leave. It’s all dollars and sense to them.” The conservative friend or family member you shared this article with would probably say the same if their governor tried something like this. But like Uglem, they would be proven wrong.

Between 2011 and 2015, Gov. Dayton added 172,000 new jobs to Minnesota’s economy — that’s 165,800 more jobs in Dayton’s first term than Pawlenty added in both of his terms combined. Even though Minnesota’s top income tax rate is the fourth highest in the country, it has the fifth lowest unemployment rate in the country at 3.6 percent. According to 2012-2013 U.S. census figures, Minnesotans had a median income that was $10,000 larger than the U.S. average, and their median income is still$8,000 more than the U.S. average today.

By late 2013, Minnesota’s private sector job growth exceeded pre-recession levels, and the state’s economy was the fifth fastest-growing in the United States. Forbes even ranked Minnesota the ninth best state for business (Scott Walker’s “Open For Business” Wisconsin came in at a distant #32 on the same list). Despite the fear mongering over businesses fleeing from Dayton’s tax cuts, 6,230 more Minnesotans filed in the top income tax bracket in 2013, just one year after Dayton’s tax increases went through. As of January 2015, Minnesota has a $1 billion budget surplus, and Gov. Dayton has pledged to reinvest more than one third of that money into public schools. And according to Gallup, Minnesota’s economic confidence is higher than any other state.

Gov. Dayton didn’t accomplish all of these reforms by shrewdly manipulating people —this article describes Dayton’s astonishing lack of charisma and articulateness. He isn’t a class warrior driven by a desire to get back at the 1 percent — Dayton is a billionaire heir to the Target fortune. It wasn’t just a majority in the legislature that forced him to do it — Dayton had to work with a Republican-controlled legislature for his first two years in office. And unlike his Republican neighbor to the east, Gov. Dayton didn’t assert his will over an unwilling populace by creating obstacles between the people and the vote — Dayton actually created an online voter registration system, making it easier than ever for people to register to vote.


The reason Gov. Dayton was able to radically transform Minnesota’s economy into one of the best in the nation is simple arithmetic. Raising taxes on those who can afford to pay more will turn a deficit into a surplus. Raising the minimum wage will increase the median income. And in a state where education is a budget priority and economic growth is one of the highest in the nation, it only makes sense that more businesses would stay.

It’s official — trickle-down economics is bunk. Minnesota has proven it once and for all. If you believe otherwise, you are wrong.

[Belsnickel]

Not saying that Gov. Dayton isn't doing well, but just going to throw out there that Gov. Pawlenty was in office during the recession. He could have added a large number of jobs in earlier years but been hit with huge job losses in the middle and toward the end thanks to that fiasco. On the surface this all looks swell, but I'd like to see the numbers broken down quarterly for unemployment especially, but also for budget purposes.

Of course I am far too lazy to look this information up at the moment, so there is that.

[GMDino]

(06-30-2016, 04:44 PM)Belsnickel Wrote: Not saying that Gov. Dayton isn't doing well, but just going to throw out there that Gov. Pawlenty was in office during the recession. He could have added a large number of jobs in earlier years but been hit with huge job losses in the middle and toward the end thanks to that fiasco. On the surface this all looks swell, but I'd like to see the numbers broken down quarterly for unemployment especially, but also for budget purposes.

Of course I am far too lazy to look this information up at the moment, so there is that.

https://fee.org/articles/minnesota-mythbusting/

Quote:While the global recession did have devastating impacts on the Minnesotan labor market at the end of Pawlenty’s term, it’s true that employment growth has been superior under his successor. In the first four years of Pawlenty’s tenure, employment in the state grew by 99,100 jobs, substantially less than the 182,100 in Dayton’s first four years. But is this really a result of progressive policies, or just the natural result of the economic recovery?


Gibson attributes Minnesota’s recovery to three of Governor Dayton’s policies: raising the minimum wage, raising taxes on the wealthy, and guaranteeing equal pay for women. But these changes were all quite small, and none corresponded with the turnaround in Minnesota’s employment, suggesting that they could not have been the cause.

[img]file:///C:/Users/DANIEL~1/AppData/Local/Temp/msohtmlclip1/01/clip_image001.png[/img]

The author of this article doesn't want to give any credit to the new governor nor blame the previous one.

I'd tend to agree that certain factors are well out of the control of most elected officials.

However....

The fact that such policies are continuing to work is a good point to still make.

[Yojimbo]

A capitalistic economy has always been and will always be CONSUMER driven. You give consumers more money, they buy more stuff, companies and executives make more money. It's called a positive feedback loop.

[JustWinBaby]

I noticed you left out this line from that article:

"This time he’s managed to single-handedly disprove “trickle-down economics,” a school of thought that doesn’t actually exist. In his words, “It’s official — trickle-down economics is bunk. Minnesota has proven it once and for all.”"

[Aquapod770]

9.50 by 2018? What a massive increase to the minimum wage. That clearly means we can bump it up to $15 right now.





In all seriousness I'd happily support raising it to $9.50. Not $15. The biggest issue with raising minimum wage is a macroeconomic theory called binding minimum wage. Basically if the government sets minimum wage above the market equilibrium point they're guaranteeing a certain percentage of unemployment. Hurting young and low-skilled workers the most. The very people minimum wage is supposed to help. Do we know where the market equilibrium point is? No. Should we just go ahead and double the minimum wage? Definitely not.

[SunsetBengal]

(06-30-2016, 08:14 PM)Aquapod770 Wrote: 9.50 by 2018? What a massive increase to the minimum wage.   That clearly means we can bump it up to $15 right now.





In all seriousness I'd happily support raising it to $9.50. Not $15. The biggest issue with raising minimum wage is a macroeconomic theory called binding minimum wage.  Basically if the government sets minimum wage above the market equilibrium point they're guaranteeing a certain percentage of unemployment. Hurting young and low-skilled workers the most. The very people minimum wage is supposed to help.  Do we know where the market equilibrium point is? No. Should we just go ahead and double the minimum wage? Definitely not.

There are some locations where $15 is absolutely necessary, and the respective economies can afford it.  Other places, not so much..

[Benton]

(06-30-2016, 10:00 PM)SunsetBengal Wrote: There are some locations where $15 is absolutely necessary, and the respective economies can afford it.  Other places, not so much..

That's why I'm against anything but a bare minimum federal minimum wage. I don't even really like states dictating it. Take Illinois. The cost of living in Chicago is high, and a $15 minimum wage wouldn't be out of line for the cost of an apartment, food and transport for a single person. But southern Illinois is rural, mostly farming communities. $15 is a pretty average salary and above what it costs for basic living expenses.

To me, the minimum wage should be set by city/county gov.

[Yojimbo]

(07-01-2016, 01:19 PM)Benton Wrote: That's why I'm against anything but a bare minimum federal minimum wage. I don't even really like states dictating it. Take Illinois. The cost of living in Chicago is high, and a $15 minimum wage wouldn't be out of line for the cost of an apartment, food and transport for a single person. But southern Illinois is rural, mostly farming communities. $15 is a pretty average salary and above what it costs for basic living expenses.

To me, the minimum wage should be set by city/county gov.

Oregon just passed a 3-tier min wage increase. Tier-1 will be $15/HR and includes metropolitan areas of Portland, Eugene and Salem. Tier-2 will go to $13.75/HR and are the larger towns. Tier-3 is rural areas, mostly eastern Oregon, they go to $12.25/HR. All of these are being phased in yearly until 2020.

[Benton]

(07-01-2016, 01:32 PM)Yojimbo Wrote: Oregon just passed a 3-tier min wage increase. Tier-1 will be $15/HR and includes metropolitan areas of Portland, Eugene and Salem. Tier-2 will go to $13.75/HR and are the larger towns. Tier-3 is rural areas, mostly eastern Oregon, they go to $12.25/HR. All of these are being phased in yearly until 2020.

That's a good approach (I've got no idea if those specific rates are good, I don't know much about Oregon). Too often state government only considers the metro areas because those are the largest concentration of voters. In Kentucky we've got the 'golden triangle' at the center of the state where most of the laws are targeted, even though the two ends of the state have very different needs and resources.

[GMDino]

(06-30-2016, 07:58 PM)JustWinBaby Wrote: I noticed you left out this line from that article:

"This time he’s managed to single-handedly disprove “trickle-down economics,” a school of thought that doesn’t actually exist. In his words, “It’s official — trickle-down economics is bunk. Minnesota has proven it once and for all.”"

"trickle down" doesn't exist in the sense that it wasn't called that by the people who were implementing their ideas during the Regan administration.  However it has become a shorthand for his economic "plan".

And his plan doesn't work.  At least not for anyone not already at or near the top.

Fair taxation, and increased wages work every time.

[Mike M (the other one)]

(07-01-2016, 01:39 PM)GMDino Wrote: "trickle down" doesn't exist in the sense that it wasn't called that by the people who were implementing their ideas during the Regan administration.  However it has become a shorthand for his economic "plan".

And his plan doesn't work.  At least not for anyone not already at or near the top.

Fair taxation, and increased wages work every time.

Not so sure about increased wages, but Far Taxation should definitely give a significant boost to a city/state/fed coffers.

Well technically, I guess increased wages would as well, since the workers will be paying more in taxes as well. Before wages are increased, I'd like to really know why they are being increased.

[GMDino]

(07-01-2016, 02:03 PM)Mike M (the other one) Wrote: Not so sure about increased wages, but Far Taxation should definitely give a significant boost to a city/state/fed coffers.

Well technically, I guess increased wages would as well, since the workers will be paying more in taxes as well. Before wages are increased, I'd like to really know why they are being increased.

I read about a study once that said if you give someone who has always been "poor" $1000.00 and someone who has always been "rich" $1000.00 the poor person will spend it and the rich person will spend some, save, some, invest some.

I don't remember the exact ranges they used, but the point was that if you are used to living paycheck to paycheck when you have more you spend it anyway.

Raising the incomes of the "poorest" puts more money back into the economy than any other option in my opinion.  And that will increase demand and then that leads to more jobs and more money going back into the economy.

Call it "trickle up".  Even if there really is no such thing.