Advanced Search
We Pay More Because We Make More
With conservatives spending the last decade telling anyone who would listen that Minnesota is a high tax state and a bad place to do business, how do they expect to attract entrepreneurs and thriving companies?
That’s like a business person shouting in front of her store, “I’m over charging you! You can get it cheaper down the street! There’s no value in my product!”
Still, you’re sure to hear conservatives echoing this discouraging rhetoric again this legislative session. In fact, a recent op-ed ran in several northwest Minnesota newspapers making similar misleading claims.
Yes, looking at per capita taxes in isolation from all other factors, Minnesotans pay modestly more than most neighbors. But high per capita income states like Minnesota almost always pay more in taxes than low per capita income states. That’s because high income states receive less federal aid, have higher labor costs, and demand superior educational systems, public services, and infrastructure. In fact, that’s how they got to be high income states in the first place.
People in the know—including experts at the Minnesota Department of Revenue and many knowledgeable business leaders—agree that taxes as a percent of personal income provide a more meaningful way to measure tax levels. By this measure, taxes in Minnesota are less than in Wisconsin and North Dakota and comparable to Iowa. In fact, if we look at all sources of revenue—including not just taxes, but also fees, special assessments, and other sources—Minnesota is below the national average.
While some low wage, low skill job providers along the South Dakota border might look west for lower tax climates, I don’t see the high wage, high skill jobs running for the Dakotas. Instead of engaging in a race to the bottom, Minnesota is best served investing in education, a skilled workforce, quality health care, roads, and smart economic development strategies that will attract businesses and encourage existing companies to expand.
Posted in Fiscal Policy | Related Topics: Income Tax Tax Fairness
6 Comments
February 2, 2012 at 9:21 pm
I agree very much with your last paragraph in the article above. I was born and raised for almost twenty years in Texas, a right to work state. I came to Minnesota
knowing very little about the state, but because my husband and dad we stationed here to form a new Division at Fort Snelling for World War II.
I had worked at the most elite Department Store in San Antonio. I worked six days per week, nine hour days and was paid $10.00 per week. Labor was plentiful because we were neighbors to Mexico and we had plenty of refugees from there.A Union had approached us but we were told if we went to their meeting we would lose our job.
I came to Minnesota at that point and was amazed when I learned I would make twice as much on a 42 hour week at W T
Grants.So when my husband was sent to Germany I came back here to live because of the higher quality of life here. MMM
has a huge plant in Austin and since Texas is still a right to work state
I would guess they make more money there, and pay lower wages. I guess it depends on whether the companies value their workers and are willing to pay to preserve quality of life for them and their families.
February 2, 2012 at 11:17 am
Even if you’re speaking in the royal “we”, you can’t legitimately talk about raising and lowering taxes without discussing the impacts of those actions. Conservatives appeal to low information voters by promising benefits and ignoring the consequences. When those consequences are felt, they then shift the blame to others. That’s why there’s a new found interest in the deficit that was never there when we were fighting two wars and paying for them with credit at the same time we were giving tax breaks to those who didn’t need them.
February 2, 2012 at 10:03 am
It is delusional to think businessmen & businesswomen listen to what people say about a state. Businessmen & businesswomen are VERY analytical and data driven in their analysis of where to locate facilities. The MN spreadsheets would list an educated labor force, good work ethic, low crime as positives for MN. However, the spreadsheets also look at business climate, regulations, ease of doing business, right to work, cost of living, etc. in MN and on these counts MN looks very poor. This analytical spreadsheet is why 3M has not invested in a new MN plant since Lew Lehr was CEO or around 1987.
February 2, 2012 at 9:14 am
You speak of reasoning to justify raising taxes, and do nothing to capitolize on what is right in front of you. Marijuana as economic developement is worth about a Billion Dollars a year broken down as follows; $138 Million for the cost of arrest thru conviction, roughly $320 million a year to house those convicts, 15,000 living wage jobs in distribution and production bringing between $450-600 million into the economy within 60 days of legalization, (time to issue licsences). We are calling it Minnesota’s Billion Dollar Solution, Marijuana as economic Developement. As first to legalize we could enjoy the benifiets of being a Marijuana Tourist meca for 2 to 4 years with an economic impact of $10-20 Billion for Minnesota buisnesses. There are always choices. This one becomes a no brainer when you see the new statistics showing that this racist prohabition is now targeting Blacks in Minnesota 9 times as often as whites. Legalization ends this racism and fills our tax coffers. Problem solved with acceptable new taxes.
February 2, 2012 at 8:55 am
I get nervious when you play with the figures John. That being said you are still missing the point here, we want a simpler and fairer tax system not changes to the present garbage. We want all the subsidies and loophole your legislative buddies (on both sides of the fence) have inserted on behalf of their buddies. What many of us would like is to see this debate limited to simply “Do we need to rase the rate of taxes, or lower it”. If we can limit legislative input on this one issue we might find it much easier take care of the rest of the agenda and end this devisive antiproductive Class Warfare Rhetoric.
Senanur says:
February 16, 2012 at 11:20 am
than done. Transit aecneigs need a steady funding source to offset the reductions in sales tax. It is great to hear about the two groups who are talking about transit’s funding challenges, the Connecting Washington Task Force and Transportation for Washington who are seeking to promote new transportation funding. We look forward to hearing what they recommend.Community Transit, our riders, and everyone who uses our roads have a great deal at stake in next year’s legislative session.I challenge other citizens who care about and who support transit to let their opinions be heard. Tell people like Senator Haugen that we need to support public transit not tear it down! Snohomish County residents rely on public transportation each day to get them to work, the doctor or to the mall and for many other reasons. Transit also benefits those who do not ride for transit riders help reduce the number of vehicles on our roadways thereby reducing the wear and tear to our roads. Public transit also reduces the amount of fuel used helping the environment. Transit even helps our economy for riders have more spending power since they are not spending as much on their transportation costs, they have more money left over to spend on other necessities helping the overall economy.Finally, as a way to reduce costs, aecneigs like Community Transit will need concessions from their unions like ATU and IAM in order to reduce overhead costs (hourly wages and benefits for people like coach operators). This will be important as a cost containment strategy.Finally, without added revenue sources, CT will have no choice but to raise the cost to ride buses through increased fares. Lets all take on Community Transit’s slogan to Think Transit First and support transit.