This Strib article should be waved in the DFL’s face to tell them that additional tax increases will kill jobs and send companies fleeing to states with more business-friendly climates. Here’s the paragraph that jumps off the page at me:
VitalMedix Inc., a Minneapolis-based company developing a hemorrhagic shock drug designed to keep alive a victim suffering near-fatal injuries, needs $3.5 million to advance its technology to human clinical trials. So far, VitalMedix has attracted only $600,000 from local investors.
“We’re not getting the job done in Minnesota,” said CEO and president Jeff Williams. “Angel investment in the Twin Cities has almost dried up. People are just sitting on their money. The past year has been the most difficult that I’ve ever seen in my career. It’s extremely difficult and frustrating.”
Williams said there is a 60 percent chance VitalMedix will move to Wisconsin, where investors enjoy tax incentives that encourage them to fund risky, early stage companies based in the Badger State. Angel investors there can claim a 25 percent tax credit over two years up to $500,000 per investment; venture capital funds can earn a 25 percent credit over one year up to $2 million per investment.
It’s insane to raise taxes even higher when companies are fleeing the state because taxes are too high already. What part of job flight doesn’t the DFL understand? If I earned a dollar for each time I’ve heard the DFL talk about the need for progressive taxation or the need for businesses to “pay their fair share”, I’d be wealthy right now. (Assuming that I’d left Minnesota so the DFL wouldn’t try taxing me from wealthy to the middle class.)
What’s worse than just the potential job loss is that this would be the loss of lots of high-tech jobs that pay the higher wages that legislators are always talking about. Instead of letting the DFL send the message that businesses aren’t welcomed here, Gov. Pawlenty should join his powerful voice with the rest of the GOP to tell Minnesotans that the DFL’s tax schemes are ruining Minnesota.
Here’s another part of the article that jumped off the page at me:
Experts have long warned that Minnesota start-ups would flee to Wisconsin. Despite an early push from Gov. Tim Pawlenty and the DFL-controlled Legislature, a proposal to create angel investment tax credits now remains bogged down in contentious budget negotiations. The Senate tax bill includes the tax credits but the House version does not.
“We need some tools to keep our more-promising businesses in Minnesota,” said state Sen. Kathy Saltzman, DFL-Woodbury, a strong proponent of the tax credits. “Our future economy is going to suffer. Wisconsin is snatching up our companies.”
The fighting pits the House DFL against the Senate DFL. The DFL can’t blame this on the GOP or Gov. Pawlenty because it’s all about the DFL’s disunity and unreasonableness on the tax issue.
I’ve written about this here, here and here. Here’s a summary of those posts: Gene Pelowski, DFL-Winona, told Ann Lenczewski, DFL-Bloomington, that her ‘tax reform’ bill is a bunch of crap. Not to be left out of the discussion (fight might be the better term), Tom Bakk, DFL-Virginia, also criticized Rep. Lenczewski’s plan. This is how Sen. Bakk ripped Rep. Lenczewski’s legislation:
Senate Taxes Committee Chairman Tom Bakk, DFL-Cook, said eliminating the current mortgage interest deduction could hurt Minnesotaâ€™s high rate of home ownership and higher alcohol taxes would drive some liquor shoppers across the Wisconsin border.
That’s a direct shot at Rep. Lenczewski’s legislation. Unfortunately, it looks like people won’t cross the Wisconsin border just to save money on alcohol. Based on the Strib’s reporting, people might be leaving the state entirely.
It’s time that we got rid of the DFL because it’s time that we stopped their job-killing tax policies dead in their tracks. It’s time we told them that we don’t care whether a business “pays its fair share” or whether the tax code is progressive enough.
It’s time we told the DFL that the only benchmarks that matter to us is whether the tax code (a) helps companies achieve stability, (b) gives companies the incentive to stay in Minnesota and (c) helps employees achieve prosperity. If it meets those three criteria, then it’s the right tax system.
Finally, it’s time we told Sen. Bakk and Rep. Lenczewski that their childish fighting is keeping Minnesota from its prosperity. That isn’t acceptable. It’s time we had a legislature that cared about creating prosperity. It’s time we exiled legislators whose first priority is fairness, not prosperity.