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With Minnesota in a recession and with companies either leaving or threatening to leave because of Minnesota’s oppressive taxation, Minnesotan’s thoughts are turning to how we can create jobs and prevent capital flight. Unfortunately, the DFL doesn’t think in terms of preventing capital flight to other states.

Unfortunately, the DFL’s thoughts about taxes have little to do with creating jobs that provide sustainable prosperity. Instead, their criteria is whether ‘the rich’ are paying their fair share and the tax code’s progressivity. Follow this link to find the DFL’s definition of rich.

In fact, lots of DFL legislators think that seasonal jobs created with bonding bills is the definition of a prosperity. DFL legislators that think that way are out of touch with reality, though. Since 2005, the Minnesota Legislature approved almost $4 billion of projects through bonding bills. In that time, we’ve lost 51,000 jobs in the construction industry.

I’d say it’s time to start a discussion on what’s the best way to create jobs and prosperity.

Let’s start that discussion with this simple question: If a state isn’t creating jobs, and if that state’s citizens aren’t prospering, isn’t progressivity and making ‘the rich’ pay their fair share a worthless argument to make? Go ask the people left behind in Michigan or California how high a priority they put on the tax code’s progressivity and on using taxes to soak ‘the rich’.

I’m betting the proverbial ranch that they don’t care about the tax code’s progressivity or soaking the rich.

In fact, I’m betting that their primary concern is finding a job that pays the mortgage and the heating bills, puts groceries in the cupboards and helps them put money aside for their children’s college and their retirements. (You’ll notice the absence of soaking the rich and progressity from their list of priorities.)

Setting money aside for college funds and for retirement isn’t possible if the businesses are constantly battling a hostile business climate. California’s business climate is as hostile as it gets. That’s why California has lost alot of capital to Nevada, New Mexico and Arizona.

The Minnesota Grocers Association has issued this statement on what raising taxes will mean to their industry:

Taxes
HF2323 (Lenczewski, D-Bloomington, 4218/Bakk, D-Cook, 8881)
While this conference committee is meeting everyday, progress is slow. There is some thought that this bill may take dramatic turns before making its way to the Governors desk. What is critical is that lawmakers realize the budget cannot be balanced on the backs of business. No matter what the method, increasing property taxes, income taxes, tobacco taxes, alcohol taxes or giving cities the ability to assess limitless fees is not acceptable.

If the DFL insists on creating a new income tax bracket while surrounding states offer business-friendly climates, the DFL will rightfully get blamed for driving businesses away.

The DFL is forever whining about Gov. Pawlenty’s inflexibility on taxes. As usual, they’ve got it bassackwards. It’s the DFL’s insistence on irresponsible spending that’s created Minnesota’s hostile business climate. Their insatiable appetite for spending irresponsibly forces tax increases. The threats of their tax increases alone have driven businesses from the state. Businesses have left Minnesota for Sioux Falls, too. This website should explain why businesses find South Dakota more appealing than Minnesota. Here’s the page’s top headline:

South Dakota has the “Best State Tax System”

Here’s the information from that link:

The Index ranks the 50 states and District of Columbia according to the costs of their tax systems for entrepreneurship and small business pulling together 16 different tax measures into one tax score that allows the 50 states and District of Columbia to be compared. Among the taxes included are income, property, death/inheritance, unemployment, and various consumption-based taxes, including state gas and diesel levies.
The 10 best state tax systems include 1) South Dakota, 2) Nevada, 3) Wyoming, 4) Washington, 5) Texas, 6) Florida, 7) Alaska, 8) Colorado, 9) Alabama, and 10) Ohio. Two of the worst include: 45) Iowa, and 49) Minnesota.

The SFDF didn’t accidentally include Minnesota’s 49th place ranking in their website. It’s obvious that they’re doing it to attract Minnesota businesses to Sioux Falls.

It’s reasonable to say that the DFL is making the SFDF’s job easier. Any time the DFL proposes a tax increase, they’re giving the SFDF more ammunition to recruit Minnesota’s companies.

Here’s another headline that will get noticed:

Top Cities for New Jobs

Here’s what the SFDF points out:

Sioux Falls received a net employment outlook of 14%, ranking the city 5th out of the 200+ metro areas surveyed. The strength of the area’s financial services and medical community was noted as a reason for the high ranking.
For more information, visit this website.

Despite the SFDF’s success in recruiting businesses, the DFL keeps insisting that we raise taxes.

The reality is that the DFL is driving businesses from the state. That won’t change directions until a new attitude develops in St. Paul.

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