AdWatch: Dayton passes foes off as tax-raisers too

Published 8:31 am Thursday, September 30, 2010

Associated Press

TITLE: “Middle Class”

LENGTH: 30 seconds

SPONSOR: Mark Dayton for Governor

AIRING: Twin Cities, Duluth markets

COST: Campaign won’t say

SCRIPT: Dayton: “I want to be the Governor to protect the middle class. Because I know we can create a better Minnesota. A better Minnesota to me means investing in education so that every child has a chance to succeed in this global economy. A better Minnesota to me means putting people back to work. Job training and also job re-training. Incentives for businesses — especially small businesses — to hire more people. I’m the only candidate who will not raise taxes on the middle class because I think the middle class is paying too high a tax burden in Minnesota.”

KEY IMAGES: The no-frills ad — one of two Dayton launched Wednesday — features the former Democratic senator standing in a town hall setting, surrounded by a diverse audience listening intently to his message. At times people in the crowd nod in agreement and they applaud at the end. Bold words flash on the screen mirroring the points he’s making in his remarks.

ANALYSIS: In this race, Dayton has never shied from a proposal to raise taxes on people with six-figure incomes or more and property taxes on high-valued homes. Even when fellow Democrats were questioning whether it was too aggressive, Dayton held firm.

Correspondence between the Minnesota Department of Revenue documents and Dayton’s campaign show that his plan would hit about 5 percent of tax filers in Minnesota, touching singles with taxable incomes above $130,000 and couples earning $150,000 a year. There’s an ongoing debate about whether those taxpayers should be considered “rich” or something less extravagant.

The ad claim by Dayton that he’s the only candidate who will protect the middle class requires a bit of extrapolation.

When it comes to Republican Tom Emmer, Dayton is making a cause-and-effect argument. Emmer’s budget outline contains no outright tax increases — and calls for cuts to some business taxes. He would scale back allowances for local governments, although many details are still unknown. Dayton argues that cutting local aid will force up property taxes as cities and counties cope with lost state help.

There is some evidence to support the notion. A March 2010 memo from researchers for the Legislature and the state tax agency makes “basic assumptions” about the relationship between aid cuts and property taxes. Among them is that local governments turn to the property tax to restore two-thirds of any state aid cuts. But the decisions on the property taxes Dayton is referring to are made by local leaders, giving state officials like the governor a bit of cover. What’s more, not all local governments react to state cuts in the same way; some look to the tax levy while others use rainy-day funds or service cuts to make up the difference.

The Independence Party’s Tom Horner has proposed making more purchases subject to the state sales tax, of which he’d try to cut the overall rate. A broader sales tax base would certainly hit many people, regardless of their income.