Letter - We pay more because we make moreWith 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?
To the editor:
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 area newspapers made 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 responsible businesses and encourage existing companies to expand.
John Van Hecke,
Minnesota 2020 executive director
St. Paul, MN