Dayton's, DFL's new taxes drive Horiz...

Dayton's, DFL's new taxes drive Horizon Milling away

Posted in the Minneapolis Forum

Avaricious DFLers

Minneapolis, MN

#1 Jul 26, 2013
... March also happens to be when the debate over Gov. Dayton’s proposals to raise income taxes on the rich and impose new taxes on businesses was in full swing and we all know how that turned out. Minnesota now has the fourth highest income tax rate on top earners in the nation. Even the Star Tribune editorial board called the 9.85 percent rate “a competitively uncomfortable perch for a state that’s home to 19 Fortune 500 companies that aim to attract top talent.”

There’s no question companies take a state’s tax regime into consideration when they decide where to locate. Horizon Milling’s 200 jobs could very well be the first casualty of the higher tax rates Dayton and the DFL-controlled legislature put into place. Remember, they raised taxes by $2.1 billion to solve a $627 million deficit.

Even before the 2013 tax hike, Colorado offered tax advantages to Ardent Mills. In 2012, the Tax Foundation, in collaboration with KPMG, released a report, Location Matters, which compares actual state business tax burdens for seven model firms. All business taxes are considered, including tax credits aimed at luring businesses. In doing so, they created the only apples-to-apples comparison of state business taxes that I know of. One of the model firms just happens to be a corporate headquarters.

According to the Tax Foundation report, Minnesota’s total effective tax rate on new corporate headquarters ranks 46th in the nation at 26 percent. Colorado ranked poorly as well (34th), but their total effective tax rate was 18.3 percent, substantially less than Minnesota’s rate.

Colorado also offers a much lower flat income tax rate of 4.63 percent for Ardent Mills' employees. At 4.63 percent, Colorado’s rate is quite a bit lower than the Minnesota’s 7.05 percent rate, which applies to anyone making more than $30,000.

Despite the fact that Colorado is also entirely controlled by Democrats, Colorado’s constitution includes income tax provisions that limit the damage lawmakers can do in to the state’s tax regime in any given year. Importantly, the Colorado constitution requires income to be taxed at one flat rate.

This means that Ardent Mills higher income employees can rest assured that they won’t experience year-after-year tax hikes like we’ve seen in California, which now has a top rate of 13.3 percent. Minnesota does not offer any protection against future hikes to fund the DFL’s spending wish list.

These favorable tax provisions almost certainly contribute to the fact that Minnesotans have been on the move to Colorado in recent years. Ardent Mills is just the latest example.

In my report, Minnesotans on the Move to Lower Tax States [ http://www.americanexperiment.org/sites/defau... ], I found that thousands of Minnesota households and hundreds of millions in income, on net, are now leaving Minnesota each year. And Colorado has been one of the largest beneficiaries of this migration. Colorado received the fourth most income of all states from Minnesota between 2005 and 2010.$152 million in adjusted gross income move from Minnesota to Colorado over that time period.

While taxes are only one part of the decision to move for any business or family, taxes are clearly part of the decision. My report shows that Minnesotans are indeed moving to lower tax states. Unfortunately, we should expect more Ardent Hills-type stories in the news now that Gov. Dayton and the DFL-controlled legislature upped the incentives for Minnesota businesses and families to find a more welcoming tax climate.

http://www.americanexperiment.org/blog/201307...
Scooby Slew

Saint Paul, MN

#2 Jul 26, 2013
Dayton is planning on more people and companies staying here because of the nice winters.

Tell me when this thread is updated:

Subscribe Now Add to my Tracker

Add your comments below

Characters left: 4000

Please note by submitting this form you acknowledge that you have read the Terms of Service and the comment you are posting is in compliance with such terms. Be polite. Inappropriate posts may be removed by the moderator. Send us your feedback.

Minneapolis Discussions

Title Updated Last By Comments
News Global warming 'undeniable,' scientists say (Jul '10) 50 min Patriot AKA Bozo 36,285
Communist purge 11 hr Space ace 10
CNN = Fake News 14 hr LIbEralS 49
President orange caveman Mon Davycrockett 3
Tucker carlson Sun Space ace 9
CIA coup against trump! Feb 17 Space ace 14
Hennepin County Judge Bruce Peterson: Feb 17 cowboy chris 5

Minneapolis Jobs

More from around the web

Personal Finance

Minneapolis Mortgages