Is now the time to raise taxes on
Minnesotans? A recent federal report seems to indicate that the answer
is no.
According to the U.S. Department of Commerce, Minnesota ranks No. 46
in terms of growth in personal income in 2006. This means local incomes
in our state are growing more slowly than in other areas of the nation.
In years past, Minnesota typically beat the national average in terms of
personal income growth.
According to the St. Paul Pioneer Press, personal income is a broader
measure than wages - it captures payments from nearly all sources,
before taxes, such as Social Security checks, benefits, property rents
and stock dividend payments. It is considered an indicator of future
consumer demand, which is a key to economic growth.
Minnesota's sluggish growth in 2006 dropped it out of the Top 10 for
personal income for the first time in a decade, the data show.
Per-capita income is now $38,712, ranking Minnesota a less stellar No.
12 in the nation, down two rungs from 2005.
The report showed that the numbers are lower because of slowed
construction and cutbacks and layoffs among some of our major state
employers. It also showed that we are making progress in income
contributions in several sectors, including health care and social
assistance.
Yet the question bears repeating: If Minnesota is nearly last in the
nation in personal income growth, does it make sense to further reduce
the incomes of our residents by increasing various taxes in several
areas? Common sense tells me the answer is no. And think about the
impact this would have on business in our state. Raising taxes on
businesses - or the top tier incomes of Minnesotans who own the
businesses - will cost us jobs. In 2001, employers were fleeing the
state until adjustments were made. Businesses would certainly not be
very enthusiastic about building in Minnesota if we had the highest
income tax rate, which is something we need to keep in mind as the end
of session draws near.
