Gov. Dayton, taxes and the economy
If liberal politicians took Austan Goolsbee's study to heart, they'd have to admit that their 'tax the rich' policy is social policy, not economic policy. Similarly, if Gov. Dayton and other DFL politicians took the bipartisan 21st Century Tax Commission report seriously, which they should, he'd learn how vital tax policy is.
For instance, Gov. Dayton would hear this important information the first time:
Globalization
Minnesota increasingly competes with other states, and other nations, for new jobs and business investments. Minnesota’s workers face stiff competition from their lower-wage counterparts around the world, many of whom are highly skilled or educated.With increasingly mobile capital, tax differences matter more than ever. Many economists point to corporate income taxes as “most harmful for growth.” As other states and nations reduce corporate taxes to compete more effectively, Minnesota’s high tax rates make the state less attractive to new or expanding companies. Since 2002, five states have reduced corporate tax rates (Kentucky, New York, North Dakota, Vermont, and West Virginia). In addition, Ohio’s replacement of its corporate income tax with a broad-based gross receipts tax will cut its business taxes by $1.4 billion annually.
During the Perpich administration, Minnesota held some significant economic advantages over other states. Minnesotans learned early on the importance of opening up international markets to trade to Minnesota businesses and the advantages of creating a well educated workforce.
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