Tuesday, September 07, 2010

Tom Horner's big lies

Independence Party gubernatorial candidate Tom Horner is betting his campaign on two false claims: The first is that his tax and spending proposals are not regressive, and the second is that it is impossible to hit rich Minnesotans with higher tax bills without compromising the state's competitiveness and job environment.

In order for a third party candidate to win the governor's office in Minnesota he or she must draw sizable numbers of voters from both Democrats and Republicans. Otherwise he merely becomes a spoiler, splitting one unlucky party and ensuring the election of the candidate who carries his own party's voters. As a former staffer for a Republican Senator and a professional flack Tom Horner is spinning false tales about taxes and spending. He's hoping a public convinced that all politicians are extremists in the Teabagger fashion will fall for lies about the impact of income tax increases on the wealthy and about the effects of his plans to close a $6 billion state budget shortfall.

In 2002 former Democrat Tim Penny ran as an independent and siphoned off 16 percent of the vote - mostly Democrats -  leaving Tim Pawlently the winner with only 44 percent of the vote - not even close to a true majority. In 2006 another former Democrat, Peter Hutchinson, ran as an independent but failed to get many votes from either party, ending up with a paltry six percent of the vote, making the election more like a traditional Minnesota governor's race. Hutchinson managed to siphon off enough liberals and moderates to allow Pawlenty to win again, but this time only by one percent of the vote.

This year a former Republican, Tom Horner, is trying to thread the political needle by carving away enough traditional partisans to follow the footsteps of Jesse Ventura into the statehouse. Only Horner has neither the celebrity nor the personality of a Ventura, making his task that much the harder.

As a former "moderate" Republican Horner should automatically pick up the marginal Republican voters who aren't religious or ideological crackpots like the ones who have run the state party since the 1990s. The core Republicans are so extreme they wouldn't even nominate a sitting governor of their own party - Arne Carlson - for governor in 1994.

Horner might be popular with whatever is left of those moderates following the party's  nominating for governor an empty suit who essentially lobbies for drunk drivers, can't do budget math, doesn't show up for votes, and who promotes family values but has an out of control family.

But that block of disaffected sane Republicans isn't nearly enough to be elected governor. A recent MPR poll shows Horner getting only 13 percent of the vote, with 19 percent still undecided and the Democrat Dayton and Republican Emmer tied at 34 percent. The high undecided share shows that many Minnesotans have not yet tuned into this race, making the poll highly suspect.

Still, even if Horner were to get every one of those undecided votes he would still be two percent behind Emmer and Dayton.  So how does Horner peel off votes from either Dayton or Emmer and prevent his long campaign from being simply a vanity project?

Usually Minnesota Independents running for governor merely position themselves as "centrists," opposed to the supposed extremes of the two major parties. In reality this is a joke. Only the state Republicans are extreme; the Democrats, if anything, lack a spine on any issue, and have been held out of the governor's mansion for more than two decades. Still - this is the prime play being made by Horner as exemplified by his inept and frankly creepy ad campaign.

The MPR poll, for what it's worth,  had Horner getting 15 percent of the Democratic vote, 26 percent of the Independent vote (compared to Dayton's 23 percent), and only nine percent of the Republican vote. The MPR story asserts, without quotes, that Horner is "not yet attracting the kind of support he anticipated from Republicans, his former party." It would be hard to imagine a Republican gubernatorial candidate getting less than 34 percent of the vote (even though Democrat Skip Humphrey managed just 28 percent against Ventura), so, unless Dayton opens up a large lead in the polls,  the chances of Horner getting more than his current nine percent of the Republican vote seems unlikely.

That means to win Horner must peel off large chunks of Democratic and Independent voters -- certainly more than his current three point lead with independents over Dayton. Winning those voters is directly at odds with winning more hard-core Republicans, so it seems there is no "centrist" path to victory that includes more Republican votes, and his centrist claims are more a pose to appear reasonable than a political reality.

On the surface Democrat Mark Dayton's campaign of increasing taxes on the wealthy would seem to alienate him from a certain percentage of voters, potentially opening up some space for Horner between Republican Emmer's no new taxes strategy and himself. In reality, a large proportion of Americans believe in Dayton's approach; just last month a nationwide poll showed a whopping 69 percent in favor of letting the Bush tax cuts on the top two brackets expire. Just a year ago a Minnesota Poll showed that two-thirds of voters in the state are cool with increasing taxes on the rich.

And therein lies Tom Horner's big, unspoken problem. In an era of severe political polarization his two gubernatorial opponents have actually staked out diametrically opposed positions on taxes and spending, leaving Horner to try and split the baby in half. Unfortunately for him the Republican half of the baby, being virulently anti-tax,  is virtually unavailable to him. Any attempt to make members of his former Republican Party pay more in taxes not only shuts off his hopes for more of their votes, it might actually threaten the paltry nine percent he's already got.

The fact that two thirds of the state is okay with raising taxes on the rich closes Horner's economic box. Mark Dayton's alignment with majority views on taxing the rich forces Horner to find some way of appealing to Independents and Democrats that won't alienate his rich friends. Horner needs to simultaneously make it appear that he will reverse the disinvestment of the Pawlenty administrations while not hurting the wealthy taxpayers who have skated during those years. That means either drastic further cuts in spending, or getting more money from low and moderate income voters. Unfortunately for Horner, those low and moderate income voters will essentially be deciding the election.

To thread this needle Horner is relying on an economic slight of hand, claiming that Dayton's proposed taxes on the rich will hurt businesses and competitiveness in the state. Instead of engaging the tax debate on a fairness or moral basis, he instead is essentially saying that  raising taxes on the rich hurts everyone. Horner's technocratic argument has the advantage, for him, of not having to overtly choose whose ox gets gored in the process of raising the revenue needed to operate a modern American state. The argument has the disadvantage, if one cares about honest discourse, of not being true, and obscuring who will really pay the bill in Tom Horner's Minnesota.

It is really a two-fold lie that Horner is telling Minnesota. First, he's telling voters that his proposed budgeting will not disproportionately hurt the poor, even though he claims to be able to save $2.5 billion through unspecified budget cuts, and raise another $2 billion from expanding the state sales tax and increasing sin taxes on alcohol, tobacco and gambling, all three of which disproportionately affect poorer citizens. Over at the Rowdy Crowd blog Horner himself admitted this fact, blithely advising the less affluent to merely not indulge in those activities if they don't want to finance the lifestyles of his rich friends. Horner may be an Independent these days, but that sounds a lot like Republican class warfare.

Though he claims to support establishing a tax-credit fund to offset these regressive actions, there are no details, nor is there any guarantee that that fund will end up in real legislation, where a governor Horner would probably have to negotiate with his former allies in the Republican Party.

But Horner's biggest lie is his gambit against Democrat Mark Dayton's plan to raise taxes on wealthy Minnesotans. According to Horner's slippery formulation it is impossible to raise income taxes on the rich without harming small business and job creation.  Several studies have attempted to assess the impact of raising income taxes on the wealthy; the most recent is more than a decade old, and even that one predicted minimal jobs losses - fewer than a thousand - and is fraught with uncertainties. 

Really there is no need to get into the weeds on this issue - Horner is basing his campaign on an unproven  assertion about the behavior of wealthy tax payers, all to avoid having them pay their fair share of taxes. Horner is further conflating Dayton's plan to tax wealthy tax payers with taxing business, which is plainly false. Income taxes are paid on income (profit), not on revenues. Profit is what is left over after deducting expenses. He's essentially saying that small business owners will forgo investment in their businesses, even if it would increase corporate profits - all for the sake of paying a lower personal income tax rate, which is irrational. It is plainly advantageous or at least a wash for businesses to increase revenue and profits even if it means paying a larger share of a bigger profit in taxes. Who's to say which would be more advantageous to individual tax payers - paying a lower rate of smaller profits, or a higher rate on larger profits? It is anything but the clear cut picture that Horner paints of higher income taxes on the wealthy leading to lower competitiveness and overall job losses.

The impact of increased taxes on the wealthy is further confused by what is done with those increased revenues to the state. If the money is used for things like building infrastructure, hiring teachers, or providing health care, those expenditures would necessarily increase employment. Improved infrastructure also has the undeniable impact of increasing productivity in the future, in effect making everyone wealthier.

The difficulty in analyzing Horner's economic statements puts journalists in a quandary since most do not have the time nor expertise to evaluate his claims. Hence, they are ignored and he gets to assert as fact dubious claims that when repeated create a false impression about Dayton's tax plans. This confusion is no accident - it is required for Horner to fool Independents and Democrats into believing that his economic plan is equal or superior to Dayton's in terms of revitalizing Minnesota's economy and job picture. If he can at least confuse the picture enough to neutralize Dayton's tax-the-rich plan - the basis of his campaign - on technocratic grounds he has opened up the electoral field.

It's hard to say if Horner's centrist scam and economic lies will work; if it doesn't it won't be from lack of support from the Star Tribune. This past Sunday the paper had no fewer than three items that fall for Horner's narrative: The first describes a new Horner TV ad and is headlined "Tom 'common sense' Horner releases new ad." Nothing like catapulting the propaganda, huh? The second doesn't mention Horner specifically, but hits at the supposed extremists in "major parties" headlined "Minnesota pushes back at partisan extremes." The third is a misleading and slanderous op-ed by the Republican propagandist Doug Tice, who both edits and writes for the commentary page, in which he declares, in a statement cynical even for him, that "I fully endorse the view that all politicians are scoundrels," who then goes on to parrot Horner's spin, calling him a "sensible" candidate selling "grown-up medicine." Notice that not one of these newspaper items attempts to asses the virtues or veracity of Horner's claims. No need to wait for the paper's endorsement editorial the weekend before the election - we already know who it is lining up behind.

Tom Horner is an experienced PR professional - a skilled spinner of the dark arts. He is dishonestly positioning himself as a centrist, with an economic plan that he says won't hurt the poor and middle class. It is apparent by now that the state's major newspaper is going to help him with this campaign. It remains to be seen if voters who really care about the decline of our state will fall for it.

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