True North

Eliminate the tax break for R&D? Sure, if we can get a lower tax rate in exchange.

In the legislative session, Rep. Ann Lenczewski (D-Bloomington) tried to eliminate (quoting an article in the June 2 issue of the Saint Paul Legal Ledger) "all corporate tax subsidies, including the R&D tax credit."

Though she failed, the proposal is worth considering. Not because government needs more money (Rep. Lenczewski's  rationale) but because our state would be best served by tax cuts across the board.

To quote from Charley Shaw's article: "Jill Larson, fiscal policy director at the Minnesota Business Partnership, said that it is imperative for the state to continue to provide the tax credit given its already high corporate tax rate -- 9.8 percent, one of the highest in the nation."

How about ... cutting the "already high corporate tax rate" instead?

For the ugly details on Minnesota's tax ranking, see Rich States, Poor States.

I don't know which bill contained Rep. Lenczewski's  proposal, so I don't know the partisan breakdown on the response to it. But Republicans who defend corporate tax breaks without simultaneously calling for shrinking the size and scope of government while cutting everyone's taxes play to the brand image of the Republican Party as the party of wealthy corporate overlords--not exactly a recipe for electoral success.

(By the way, ever notice that big business and free-market advocacy/support for competent but small government don't always go hand-in-hand? Chamber of Commerce support for the transit tax. Thomson tax breaks. Mall of America tax breaks. BP's enthusiasm for cap-and-trade. And so on.)