Across the Great Divide

The Imaginary Travels of a Job Creator.

Wandering Job Creators are getting to be right up there with The Hook as a tale to scare gullible Minnesotans.

You've heard of them, I'm sure. Those heroic figures who daily fling themselves against hostile government regulation and confiscatory tax rates to bring you jobs that would not have existed without their brilliance, perseverence and wealth. Especially wealth, which, as you know allows them to live anywhere they choose — including South Dakota.

But what job creator would move their residence and business just for a more friendly tax climate?

This urban myth has been repeated often by state Republicans, including House Speaker Kurt Zellers, Senate Majority Leader Amy Koch and state party chair Tony Sutton, whose main authority on the subject of jobs comes from killing them during his tenure at Baja Sol.

In one version, Rep. Zellers, about 3:10 into this interview, describes a hypothetical small businesswoman forced to relocate her business to Sioux Falls, SD, or Hudson, WI, in order to "keep her doors open" because Minnesota raised its top tax rate and her business income flows to her personal tax return.

The scenario is unlikely in so many respects.

Assuming our Hudson-bound owner is successful to have a household taxable income of $300,000, the Dayton income tax proposal would take an additional $1550 in taxes. The higher rate would not affect her ability to pay the tax deductible expenses associated with the business, so it's difficult to see how the owner might have to close her doors. She would have slightly less disposable income if her business sales remained flat; if sales declined she would earn less and pay less tax, and if sales rose, she'd make more money and pay a bit more in taxes, too.

To save that $1550, she'd have to change her state of residence and sell her house or add the cost of acquiring a second residence in the new state. In the current housing market, the sale would unlikely be quick or profitable for the owner.

To establish her business in the new location, at minimum she would have to locate new space, change her business communications (letterhead, phone, website, signs), reinstall systems, reregister vehicles, etc. If she is a professional or tradesperson, she may also have to obtain a license in the new state, register her business and become acquainted with state rules and tax regulations. There will likely be some business interruption and revenue loss associated with a move.

She might be able to count on retaining her customers if her business is conducted virtually or if they remain in the same geographic radius. If she has employees, they may decide to move to the new location with her — or she will have to go through the work and risk of finding a new and comparably performing work force.

She will encounter new competition in a new location and may have to introduce herself to new customers and suppliers. For about 15 years, my company has maintained a sales office in Atlanta that we tried to expand into a second creative shop. The regional business culture made it a struggle and we eventually stopped pouring money into the attempt. Unless a business serves national clients, it will be challenging to pick up new customers as the new kid in town.

Relocating retail and service businesses — the vast majority of businesses affected by the Dayton tax proposal — is risk-laden for the owner, but not necessarily bad for jobs here because other companies will fill the need left behind. For example, Sen. Amy Koch is associated with two family businesses — one in property management and the other providing services to local utilities. If she relocated, could she take those jobs with her or would they have to stay in Minnesota because the properties and utility lines are here?

Yes, we may lose some of the income from the departing high earner, but the greater local loss of jobs is not through migrating owners — it's due to cutting teachers and other public jobs. The idea cutting these positions frees capital to create private sector jobs has some validity, but the impact of losing real jobs is greater than the benefit some phantom jobs. Ask Speaker Zellers about the impact on his family of losing his wife's job as a public school teacher. Would he trade it for his tax cut "job creation?"

When you look at these claims in light of reality, they fall apart, and the media should insist on real examples and data that show this is an actual problem whenever this storyline resurfaces.

 

 

The Alcohol Tax Glass is More than Half Empty.

The latest debate over Sunday liquor sales in Minnesota has featured claims that Minnesota is somehow missing out on $10 million in tax revenues.

Puhlease.

I've debunked parts of this claim via twitter and comments sections, but thought it worth a post because this shows how interest groups can use data to mislead the public and policy makers. I wrote about this when it came up last session and won't repeat myself here.

Let's focus on this commentary by the Distilled Spirits Council published in the Strib with the subhead: "The Sunday ban on liquor sales costs state an estimated $10 million." The author says:

Colorado, the most recent state to enact Sunday sales, even saw its 2008 alcohol excise tax revenue collection increase by 6 percent despite the toll of the recession.

Well, not quite. Colorado's 2008 alcohol tax revenue, according to the state's annual report, only increased by 1.5 percent over 2007. But since Sunday sales took effect July 1, 2008, perhaps the author meant the 2009 fiscal year ending July, 2009. A Denver news report says:

Colorado State Treasury’s data shows that liquor, beer and wine tax revenues increased by $2,056,858 in the 12 months following July 1, 2008, when the bill allowing Sunday liquor sales went into effect.

Now, there may be various reasons why Colorado saw a bump in 2009, but why should we suppose the growth in FY 2009 was due to Sunday sales? Especially when Minnesota's alcohol tax revenues increased almost $3 million between FY 2008 and 09 [PDF], without benefit of adding Sunday sales?

Another claim made in the piece:

A national analysis of states that allowed Sunday sales between 2002 and 2005 (12 states) showed that in 2006 each state saw an average 5 to 7 percent increase in tax revenues.

I have no doubt that's true, since during the same period, Sunday-deprived Colorado saw a 10.3 percent gain and Minnesota saw a 3.3 percent gain.

In other words, revenue from alcohol sales slides around from year to year, and depending on the period you select, you can make the numbers dance your dance.

But the most troubling thing to me is the takeaway the Strib opinion piece is allowed to leave. Even by the Distilled Spirit Council's own estimate, only about half of Colorado's $2 million gain in one year could be attributed to higher liquor store sales. (Two percent of the 6 percent gain was the national average gain and about 75 percent of the alcohol taxes collected come from package liquor stores, according to the Council,)

Allowing for Minnesota's higher alcohol tax rate overall (it takes in roughly double what Colorado does), how do we get to $10 million more in tax revenue with Sunday sales?

We don't.

And if you think the difference is coming from recaptured sales lost to Wisconsin, please comment here so I can debunk that one, too.

UPDATE:

For the real tax nuts, I've added a couple analytical footnotes to his post over at the Growth & Justice Blog.

Fun With Charts: How to Make Your Opponents Look Worse.

The Minnesota GOP announced its new, streamlined committee structures yesterday, complete with some visual aids that showed how the previous House and Senate committee structures had been a maze of tangled relationships.

Not surprisingly, the chart showing the committee structure under DFL leadership looked like this.

In comparison, the GOP structure is a model of clarity:

I took a quick crack at my own rendition, using the design approach applied to the DFL and using the committee lists reported here. Without even trying hard to make the GOP look bad, I came up with this:

Is the GOP revision of committees (which was discussed by both parties last session) an improvement? Possibly so. But was the old arrangement as bad as they made it look?

 

 

 

 

 

 

 

Mark Dayton: The Manchurian Candidate?

I was just going to let this whole ridiculous Dayton teacher confirmation deal drop. You can see from the comments and over here why it's a pointless enterprise to engage the people determined to bring down Mark Dayton by any means they can devise.

But in a weak moment, made a trip to the basement and found the Department of Defense Personnel Security Questionnaire Form DD 48 I completed on 5/16/77 in order to gain a DoD security clearance.

(For those in the audience who say applying is no proof — I received a Secret clearance, but I have no documentation of it. You know, they make you turn in your badge when you leave.)

I saved the form, not because I ever planned to run for office but because it was the most detailed and comprehensive documentation of personal history I had done before or since.

It's mentioned here for two reasons:

1. It covers the same period for which Mark Dayton is supposed to be able to produce laborious detail, on command of his enemies.
2. It illustrates the difficulty in performing the act his detractors demand he perform. Immediately. While he is busy running for governor.

Note that I created this document 33 years ago — on what looks like my Hermes manual typewriter, but maybe wtfci can prove otherwise.

There's no way today I could recount with any accuracy most of the names dates and employers without it. But since I have it now to look backward in time, let's see whether we could obtain confirmation of my employment in those long-ago jobs.

I'll spare you the detail, but of 10 entities I worked for between 1967 and 1976, only one still exists as an ongoing enterprise — Carleton College. The others have disappeared, been merged into other companies or changed names and changed owners. I know for certain one of listed supervisors is deceased; I've lost contact with all the others, and they are no longer at those addresses.

I contacted Carleton to confirm my employment during the dates specified, between 1/68 and 6/71, during which I held work contract jobs with the college in the post office, food service, bookstore and as a resident assistant.

I don't have permission to name or quote the official who responded to my information request. But in essence, he said emphatically, most of the paper records for student workers before 2000 had long ago been shredded.

But, insist the sleuths, as employers of the governor, we must confirm prior employment. If we find gaps in the record,  we will not hire Mark Dayton.

So I checked with a source who has conducted and supervised federal background investigations for a federal agency — including Presidential appointees.

How would the investigator go about checking a 40-year-old employment record?

The investigator responded:

It depends on the position — but I can tell you for a PRESIDENTIAL APPOINTEE requiring Senate confirmation (i.e. Attorney General etc.) it usually only goes back 7-10 years... with the caveat that there is a catchall series of questions designed to find any potential areas that might subject the applicant to coercion. [My note: I'm sure our sleuths can imagine all kinds of reasons a Manchurian Jr. High teacher might be coerced 40 years later to betray his state!]

For a [federal agency] applicant we go back as far as 18th birthday or ten years, I think. The more critical issue for us would also be whether the applicant had ever demonstrated a "lack of candor" on any official document, application, resume etc.  So if he claimed somewhere that he taught and we later found (through whatever means) that was not true,  that would be grounds for disqualification.  [Note: Oh, oppo research Field Day!!]

We would not independently be trying to confirm every job some guy had going back 40 years during the course of a normal background check.  It is virtually impossible to go back and confirm all types of employment going back that far — records and companies cease to exist — but just as you did, with some digging you should be able to find SOMEONE that can confirm a guy worked there even if there are no remaining written records with specifics as to dates/salaries/supervisor/duties etc.

None of this will satisfy the sleuths, of course, because they have a different goal.

A normal employer wants to hire you and in an employment check trying to find any reasons not to hire. These folks want nothing to do with Dayton and are furious he will not cooperate in helping them find reasons to confirm that burning desire to destroy him and all he represents.

 

 

Memo to MNGOP: Questions About Dayton are Cheap.

I have a full rest of the week, but as a parting gift to you and all the other amateur slime sleuths working on your behalf, I would suggest you buy a plane ticket to New York City, see if you can find P.S. 65 on Hester Street near the Bowery and ask to see all their records.

Don't be confused. New York City has hundreds of elementary schools, and more than one P.S. 65.

I think you will discover the school, like some other inner city schools that were challenged 40 years ago, has been razed. A park is on the former site, and Pace High School is nearby.

And while you are there, ask people what it was like to live there in 1969-71, after both King and Kennedy had been shot. What it was like to go to school in one of the poorest and most dense neighborhoods in America. Ask them if the neighborhood is better now, and ask them why.

Be sure to note any answers that mention the Republican Party.

You might visit the Lower East Side Tenement Museum nearby while you are at it.

Of course, a lazy operative could claim the school never existed. Or that it was demolished, along with the school records, using money from the Daytons and the Rockefellers. Or you can find someone who attended the school who doesn't remember a Mark Dayton.

I'm sure your mini-swift boaters can come up with something.

Questions are cheap, but answers take work. And integrity.

I do hope you are able to apply this lesson to governing, since you are incapable of applying it to reporting.

If you find something factual that refutes me, please do get back to my readers in the comments. I'll be in Turkey, where that nation has an election that may move it every closer to democratic rule.

Otherwise, it would be a good idea not to raise questions when you really don't know the answers.

It makes you look like an ass.

Employer Vouches for Dayton Teaching Record.

 

Blogger and GOP activist Sheila Kihne has Luke Hellier and other GOP disinformation artists all atwitter over the fact she was unable to verify the employment of Mark Dayton by New York City public schools 40 years ago.

It took me a couple minutes, and within the afternoon while multi-tasking I made the confirmation.

Earlier, Dayton released a copy of his New York state teacher's license. Ms. Kihne and others weren't impressed.

It’s very, very odd that they have no record for Senator Dayton- I myself was very surprised when I got the letter back from the attorney at the schools.

If the NYC Schools has no record, then it’s up to Mr. Dayton to fix that….don’t you think? He should do what your friend had to do to get her records.

If I applied for a job, and the company wasn’t able to verify my employment, it would be a problem. That’s a simple fact.

Well, no, it isn't. But simple facts have never been the strong suit of the GOP and its minions.

The license went to Dayton at his employer's address. I tracked down the founder of The Teacher's, Inc., an organization founded by Dr. Roger Landrum as a kind of "Peace Corps" for inner city schools. Here's what Dr. Landrum, now President and Co-Founder of Youth Services International, had to say about Dayton.

I can indeed verify that Mark Dayton was a teacher in the New York City public schools for two years, and a member of The Teachers Inc., which was the predecessor of Teach for America.

I was one of the first Peace Corps Volunteers (1961-1963).  Following that experience I created The Teachers Inc. as a kind of "peace corps" for American inner-city schools.  Unlike the Peace Corps the organization itself was a private non-profit that recruited, trained and placed outstanding and highly-motivated young people in urban school districts.  We operated by contract with school districts in New York City, Philadelphia, Washington DC, and Atlanta.

Mark taught on the Lower East Side where my headquarters were located.  He was one of the first to come into the program, along with a number of recent Yale graduates, and I knew him quite well.  He did a very good job and the conditions were in some ways more demanding than the Peace Corps.

It is indeed contemptible that anyone would attempt to claim that Mark did not teach in the New York City public schools or deny his youthful idealism.  

 

You may recall other instances of this-less-than-meets-the-nose nonsense related to signatures on deliveries to Al Franken's condo, Keith Ellison's college writings and supposedly missing pages from Dayton's divorce records. If you don't remember, lucky you. You didn't miss anything.

These people do just enough "research" to create a question in the public arena — but never enough to actually answer the question they pose.

It's slimy behavior and it has plenty of enablers who let them get away with it.

I have no connection to the Dayton campaign and did this in my spare time, folks. It's not that hard to tell the truth, but for people of this ilk, it's profitable to deal in untruth.

 

 

Maddow to Obama: Stop Feeding the Dog at the Table.

Rachel Maddow deconstructs the Fox News take down of Shirley Sherrod and asks, who's next in the campaign to help white people feel aggrieved about black racism?

Let's see, ACORN, Van Jones, Shirley Sherrod and the NAACP, New Black Panthers...

Visit msnbc.com for breaking news, world news, and news about the economy

Palin, the Regulator.

Sara Palin explains how you can't trust those oil companies she was crying to unleash just a bit ago. But you can trust the Norwegians and the Dutch and some company in Maine trying to sell its clean up products.

Palin cites Dutch expertise with dikes, perhaps overlooking that the country's real oil spill expertise may come from Royal Dutch Shell, another one of those suddenly evil oil companies.

She also claims about 75 percent of her time on the job was spent dealing with the oil business and related matters. There had to be some reason she was seldom seen around Juneau.

An amazing demonstration of fast talk and emphatic but empty assertions that makes it tough for even Bill O'Reilly to get a word in edgewise.

Burning the Boats.

Finally caught up with colleague Dane Smith's piece on Gov. Pawlenty's seven years of bellicose budget language.

The net job growth and prosperity that Pawlenty promised would result from burning the boats has not materialized; in fact, we are worse off economically now than we were a decade ago. And now Pawlenty is asking us to believe that we should disinvest further in our schools, in our safety net for those who inevitably fall, and in all of the human capital and physical infrastructure that sustains our business growth.

The savagery of the language is as fierce as ever, and it harmonizes with the choleric rage fomented at Tea Party rallies, in which our own governments are transformed into our enemies and our taxes, already among the lowest of any wealthy democratic nation, are evil incarnate.

Dane and I are girding our loins for tomorrow, when our op/ed on taxes appears in Sunday's Strib.

Keep it Simple, Stupid.

Robert Wright, writing about potential New York U.S. Senate candidate Mort Zuckerman, might well have been talking about our local GOP braintrust here:

[W]hen Zuckerman’s electoral opponent’s oppo-research team scours his trail of utterances, they’ll be looking for an unguarded remark that offends some interest group or an opinion that, taken out of context, terrifies or enrages the easily terrified or enraged. The last thing they’ll be looking for is something truly indicative of his way of thinking and directly relevant to his future performance. And, should they stumble upon such a thing, they’ll rule it out if it requires much explanation.