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Tax breaks to spur job growth?

ST. PAUL -- Gov. Mark Dayton and Democratic legislative leaders said cutting a business's taxes for hiring people and passing a large public works bill would create thousands of Minnesota jobs.

Key to a proposal the Democrats offered on Wednesday is providing a $3,000 tax credit for the unemployed, veterans and recent graduates this year and a $1,500 credit next year. The plan would cost the state $35 million.

Dayton plans to release his proposal to fund public works projects, funded by selling bonds, on Tuesday.

He said he will propose spending $775 million.

Dayton, Senate Minority Leader Tom Bakk of Cook and House Minority Leader Paul Thissen of Minneapolis tried to steal the thunder from Republicans by promoting what they termed a jobs agenda for this year's legislative session, which begins Jan. 24. Republicans have said that improving the business climate, to produce more jobs, is a priority.

The construction industry needs help, according to Bakk, a long-time carpenter.

"It is more than a recession, it is a downright depression," he said.

Thissen said a gradually improving economy "is no excuse for us to sit on the sidelines."

While the Democratic-Farmer-Laborite plan calls for cutting business taxes, like Republicans often want, it would be mostly funded by eliminating what Dayton called "loopholes" in tax law. Republicans often consider filing those "loopholes" as business tax increases.

Other funds to make up for the tax cuts the Democrats propose would come from taxing all online sales. That would bring in $10 million, but some Republicans immediately criticized it as a tax increase.

The top Senate jobs promoter avoided criticizing the DFL plan, instead promoting the GOP's plan to reduce business regulations.

"Job creators across our state have been telling us that we can help them by getting government out of their way, reducing regulatory and tax burdens and letting them do what they do best: create jobs," said Sen. Geoff Michel, R-Edina.

Davis works for Forum Communications Co., which owns the Daily Globe.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.