One on one: Legislators argue the case for reforming the state's tax code

DFLers and Republicans at the Minnesota Legislature aren't just talking about whether to raise taxes, cut them, or hold them flat.

There are serious discussions underway about whether to reshape the state's tax code.

Rep. Ann Lenczewski (DFL-Bloomington) and Sen. Julianne Ortman (R-Chanhassen) are leading that effort. Lenczewski, who sits on the House Taxes committee, said the tax code has many questionable provisions.

"There's this thing called the long-term health care credit, which somebody dreamt up and said, 'Let's give people $100 deduction on their income tax if they go buy a long-term health care policy,'" Lenczewski said. "It sounds like a good idea. That $100 is not making anyone buy long-term health policies, and yet we're spending in the millions of dollars every year giving $100 to people to get them to do this behavior."

She compared the reform effort to cleaning out a basement.

"You find a bunch of stuff that's really valuable that you would never ever give up," Lenczewski said. "And then you look at other things and go, 'Why do we even still have this?' And that's what the legislature needs to do with the tax code, and it's difficult to do."

Ortman, who chairs the Senate Taxes committee, said the state should eliminate preferential treatment in its tax code.

"This is exactly what Ronald Reagan did in 1986," Ortman said. "What he did is he eliminated all of the preferential treatment. He took on the special interest groups, and he said, 'The best thing we could do for the economy is lower all the rates and eliminate some of those exemptions.'"

Ortman and Lenczewski said they hope colleagues from both parties will support reform efforts.

"It's not a Republican or a Democrat issue," Ortman said. "It's really in my mind non-partisan, but it's an educational one. People need to understand, and they're afraid of the tax code, and if you say, 'You're going to have a tax change,' people automatically have a response to that, and it's not necessarily a good one."

But they acknowledged that many lawmakers might not want to explore the issue right now.

"I think it's hard to get members in either caucus to want to take on things that have become viewed by taxpayers as rights," Lenczewski said. "I think it's less an issue really of Democrat versus Republican. It's a willingness to have the guts to start taking things away from people that they think they should have."