The Minneapolis Star Tribune has published a scathing denouncement of the proposal to raise taxes on high-income earners, part of the House of Representative’s DFL tax plan and similar to the Governor’s taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. plan that we've critiqued here and here:
The House DFL proposal to double down on an upper-income tax increase — albeit temporarily — risks launching the state’s top tax rate into an anticompetitive stratosphere. It’s an idea that ought to disappear faster than March snow.
The paper-of-record's editorial goes on to warn that higher taxes on wealthier taxpayers is poor tax policy, bringing Minnesota into the same camp as high-tax California and Hawaii:
That’s not good company for a state that wants to continue to be home to more Fortune 500 companies per capita than any other. Those big businesses aim to attract top talent from around the country. A supersized state income tax for top earners would make their recruitment more difficult, and could cause some companies to ask whether they ought to do their hiring elsewhere.
States should think carefully about how they decide to collect revenue. The editorial board is right—revenue should be raised in a way that minimizes economic distortions and doesn’t put states at a competitive disadvantage. Governor Dayton and state legislators alike would do well to follow the Star Tribune’s advice.
More on Minnesota here.
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