Dayton Plays Hardball on MNLARS and Tax Conformity

Governor Dayton held a press conference on Tuesday after a breakfast with legislative leaders which covered a number of topics including MNLARS, his supplemental budget, and tax conformity.  (You can see the whole press conference here.) Dayton expressed impatience with the House coming up with its own plan for MNLARS after he had expressed his preference for the Senate plan.  He threatened to veto anything other than what he had agreed to with the Senate and hang the failure to fix MNSure on the Republican-led Legislature.

When the topic turned to tax conformity Dayton took a similar tone.  He said that if the legislature did not come to an agreement with him on tax conformity, then there would be no conformity and they could take the blame for the chaos that would ensue when people file their 2018 taxes. 

  • He claimed that his tax plan was not a tax increase on “individual Minnesotans” and that it even provided a tax cut of $117 on average or $160 if the working family credit is expanded as he proposes.
  • In describing his business tax policies, in which he is refusing to conform to most of the business reforms except for 179 expensing -- he said that it’s not really a tax increase on corporations, it just lacks conformity to the federal tax changes. In particular, his plan will not conform to the federal repatriation incentive. He said, “they should pay taxes on their profits.”  


A few times when asked about this attitude, Dayton smiled and said he was on his way out, only a few more months in the job and that if things didn’t get resolved he would leave them for his successor. 


It will be interesting to see if this attitude continues to negotiations, as he pretends to be the man with nothing to lose by holding out for everything he wants.

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