Thanks to Sid Hartman for helping craft my question: How did those Republican “geniuses” who wrote the conference bill make it worse than the separate House and Senate tax bills?
I checked the Tax Foundation analysis and found that jobs and GDP growth is more than 50 percent lower in the conference bill:
• Job growth declines to 339,000 over 10 years, compared with 890,000 and 925,000 in the House and Senate bills.
• GDP growth declines to 1.7 percent, compared with 3.7 percent and 3.5 percent in the House and Senate bills.
Please note that the Tax Foundation is a right-leaning research and policy organization favored by Republicans. Its analysis also forecasts that our debt will increase by nearly half a trillion dollars — $448 billion.
On a Minnesota note, it’s even worse! At the end of 10 years, instead of 17,823 new jobs under the House bill, the number declines to a meager 6,789 (minus 62 percent), and median family income will have grown by $772.40 instead of $2,268 (minus 66 percent).
Because of the senseless rush to vote, and without having a single public hearing or expert testimony, I doubt that any of the “yes” voters are even aware of the Tax Foundation report on how much the bill has been weakened.
According to Greg Jenner, former Treasury official under President George W. Bush, the Senate bill created numerous opportunities for corporate tax avoidance. No doubt this will be true for the conference tax cut bill as approved.
Howard Schneider, Lakeville
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The Dec. 19 article “Tax plan could be dramatic in Minn.” talked about how the rush to pass the law has made it hard to figure out what’s in it. One example of such a poorly understood consequence: the effect of the law on people with rare diseases.
The orphan drug research credit reduces the costs of doing research on treatments that help small populations. Since the majority of drugs don’t make it through clinical trials, companies may have to do 10 studies to find one working drug to help a few thousand people. Without a substantial tax incentive, the cost of doing clinical studies can be too high for companies to recoup without huge patient populations to target.
My kids have a rare genetic disease. My congressman, Erik Paulsen, sat across a table from me in September and told me he supported the Orphan Drug Act and medical research for rare diseases. But he voted in favor of the House version of the tax bill, which would have eliminated that credit entirely. And the final version still cuts the credit in half.
Rare diseases are rare individually, but there are a lot of them and a lot of people suffering from conditions that still don’t have good treatments. It is a shame that a change that will make it harder to find cures is getting passed under cover of “tax reform” by politicians who are not being honest about what they are doing.
Mary Salit, Plymouth
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In Tuesday’s article about the impact of the tax plan on Minnesota, it was stated that the average state taxes claimed as a federal tax deduction for Hennepin County for those who itemize was $19,636 in 2015 and that those payers will be hurt because the new tax law limits state tax deductions to $10,000. The $19,636 amount was claimed to be from IRS data. This is very hard to believe, since it corresponds to a married couple with an annual net taxable income (gross minus deductions) of about $200,000 and a house worth about $500,000. It is hard to believe this is the county average of those who itemize. If so, there must be many very high-income people bringing up the average, so the median should be used instead.
For a more typical couple a little above middle class with a net taxable income of $100,000 and a house worth $350,000, the value is about $10,050, close to the new limit.
Maybe the claimed deduction of $19,636 included amounts for mortgage interest and charitable deductions, which for most people are not affected by the new law. And the article did not mention that with the new income brackets and rates, the above typical couple will save from $2,000 to $3,000 per year. With such highly biased reporting, no wonder polls show most people are not in favor of the new tax law. For the middle class, their new paychecks should change their minds.
Richard Petschauer, Edina
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As a retiree, I can easily calculate my taxes under the new plan, and in my case I will pay $58 more than in the past. This is due to not being able to deduct local taxes, which are $3,000 more than the new limit, thus I have to use the standard deduction and my taxable income is now $10,000 more than in previous years. By the way, the highly touted standard deduction of $24,000 for a family is really only $15,900, because the $8,100 personal exemption for a family has been eliminated in the new plan. I would encourage everyone to estimate their taxes and see if they think this is a break for the middle class.
Rick Windham, Edina
Exemplary effort in Puerto Rico by a hometown company
I was surprised and deeply impressed to read about the efforts of our local Best Buy Co. to help our fellow citizens who make their homes in Puerto Rico (“Best Buy still paying idled Puerto Rico employees,” Dec. 18). The generosity, compassion and solidarity of this local corporation stands in stark contrast to the paltry and inadequate response of our federal government. Over a third of the island is still without electricity, much also without clean drinking water; I cannot imagine the plight of those who require electricity to store insulin or get dialysis or pump water. Indeed there have possibly been more than a thousand who have died there as a result of the storm. Having lived 13 years on that Enchanted Island and having had two children born there, I can easily picture the hillsides scoured of all food crops, of the blocked roads, the downed bridges. From this context, Best Buy has shown its humanity and I sincerely thank the company for its efforts. I only wish our own government had as much kindness.
Charles Underwood, Minneapolis
U.S. SEN. AL FRANKEN
Second thoughts, please, about your pending departure
To Al Franken: Don’t do it. Don’t resign.
Or unresign, whichever the case may be. If the Senate Ethics Committee says goodbye, that’s a different matter — in that case don’t let the door hit you on the way out. But we elected you, not Mark Dayton, not Tina Smith.
Michael N. Felix, Grand Rapids, Minn.
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Lt. Gov. Tina Smith will be one of the smartest, most open-minded and effective people in all the Senate on her first day in office. No Minnesotan could be a better choice for the job. Still, Minnesota and the nation have a right to continue to grieve the loss of Al Franken due to unsubstantiated allegations of relatively mild sexual impropriety. Like Gov. Arne Carlson and many Republicans and Democrats, I longed for the Ethics Committee to do its work, especially true given evidence that Leeann Tweeden, whose allegation ignited this firestorm, was “coached for weeks” before her statement. Facts matter. Was this a right-wing set up? From the current vantage point, it appears “The Giant of the Senate” was felled by a partisan poisoned arrow.
James P. Lenfestey, Minneapolis