IP gubernatorial candidates talk taxes during debate

An Independence Party gubernatorial debate between endorsed candidate Tom Horner and challenger Rob Hahn on MPR's Midmorning program Monday turned out to be an hour-long battle over tax policy.

Horner is a former public relations executive, University of St. Thomas adjunct professor and Republican political commentator. He repeatedly accused Hahn of not understanding issues.

Rob Hahn, who own his own small publishing company, is challenging Horner in the August primary. Hahn accused Horner of being light on specifics in his proposals, particularly his plan to expand the sales tax.

Horner wants to broaden the sales tax and lower the rate, but he acknowledged he doesn't know exactly what the new rate would be and exactly what would be taxed.

"Rob, that's where you bring people together and you compromise," Horner said.

Hahn retorted:

"No. That's where a candidate who doesn't have the guts to put out proposal that's very specifics and let people take shots at him, like I have. You can dance around this," Hahn said.

Horner chided Hahn for what he called a personal attack, to which Hahn replied that it was a "professional attack."

Horner conceded that food, clothing and personal services would likely be included in his proposal, but that professional services would not. Hahn said expanding the sales tax would hurt middle and low-income Minnesotans. Horner said credits and exemptions could be built in to prevent a broader sales tax from disproportionately hurting low- and middle-income Minnesotans.

TAXING SMALL BUSINESSES

Instead of looking to the sales tax for revenue, Hahn wants to increase income taxes on what he refers to as "uber-rich" Minnesotans -- couples who report income of $250,000 or more.

Horner said Hahn's plan would hurt small business owners.

Hahn countered Horner's claims with statistics that show far and away most wealthy Minnesotans didn't become rich with small business income.

"Now correct me if I'm wrong, but that means that 94.3 percent of households that make 250 or more are getting their income from somewhere other than small businesses, so how am I hurting small businesses?" he asked Horner, who replied:

"Because Rob, you're taxing those small business that are creating jobs," Horner said. "You're taxing those businesses that are trying to grow and expand."

According the Minnesota Department of Revenue, Hahn is right. The vast majority of small business owners -- 93 percent -- don't make enough money to get hit with a tax increase on couples earning $250,000 or more. But there's a catch: The 7 percent of owners who do report that kind of money are big players and account for two-thirds of all small business income in Minnesota.

GAMBLING, VIKINGS STADIUM, ETC.

Hahn and Horner also disagreed over the best approach to expand gambling to increase revenue.

Hahn is proposing "river boat" gambling. Horner said any expansion should be limited to adding casino games at the state's two existing horse tracks.

Both candidates said they would support taxpayer funding for a new stadium for the Vikings and that they opposed Arizona's law requiring police to check the status of anyone they suspect is in the country illegally.

Following the debate, Horner announced his campaign raised nearly $190,000 this year and has nearly $28,000 in cash.

Hahn has not yet released his figures. All candidates are required to disclose their fund raising by tomorrow morning.

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