The leaders of the Minnesota Legislature appeared on MPR's Midday today, and even a casual listener had to pick up on the use of the newest word in politics: job creators. We once referred to these people as "employers" or "businesspeople," but those days are gone.
The leaders panned Gov. Mark Dayton's proposal for an income tax surcharge on the "wealthiest" Minnesotans, noting correctly that Minnesota would have the highest top tax rate in the nation.
The wealthy are the people who create jobs, the theory goes. And they will move if the taxes go up.
MPR's Public Insight Network queried higher-income individuals (some of whom would be subject to the increased taxes) about whether they have considered moving out of the state. Here are some of the answers:
"Well, we face high tax rates because we get paid at lot doing jobs that we have in Minnesota. If we leave Minnesota, we leave the jobs. Oops. Plus, taxes are not a major consideration compared to other location issues -- livable city, schools, arts and entertainment, family ties. Those other factors are what drew us to Minnesota when we relocated here in 2002." - Matt, Minneapolis (Above $180,000)
"No. If I was a non-retail employer, I'd move to South Dakota and commute occasionally to Minnesota or move the business." - Gary, Falcon Heights. ($120,000)
"Yes. Temporary surtaxes do not come and go - they tend to stick around, and get blended into normal tax rates before being repealed. Does the governor believe that fiscal decisions have no impact on what people do? " Louis, St. Louis Park (Makes over the surcharge limit)
"Yes. : I learned that the estate tax is one of the highest in Minnesota. We do not have the 3.5 exemption like some states which follow the Federal Law. But I can't fathom moving to such places as Florida, AZ or Texas just to give my descendants a tax break." Susan, North Oaks (Over $100,000)
"No. No one likes to pay taxes. But it is time we who make more, pay more to assure the education and care of our neighbors. Why would it be a business advantage to continue to provide less education and care to its workers and consumers. " - Mary, Apple Valley (Over $200,000)
"Only if taxes become so low that the quality of life here is passed up by other states that are more realistic about raising enough tax revenue to pay for quality services. The vast middle of Minnesota residents understand that the State's budget needs both tax increases and spending reductions in order to balance the budget and take care of structural budget problems. This includes 'high income' residents." - Larry, Bloomington ($150,000)
"Taxes are an important piece of quality of life in all of our communities. One has more impact and control over how tax revenues are spent locally as opposed to nationally. Not enough control, however, due to the influence that well financed corporations have on the political decisions made. Minnesota is a beautiful winter state. It requires adequate funding to remain beautiful, manage winter realities, and provide infrastructure, parks, clean lakes, libraries, education, public services, and support for all of our people. Homeless, starving people without adequate health care, besides the inhumanity of allowing them to suffer, also makes the state a poorer less attractive, less humane place to live. When everyone does better, everyone does better." - Stacey, Minneapolis ($150,000)
"Family is in Minnesota. Will consider to move after retirement especially if children move out of state. Probably become one of those dreaded snow birds that Governor Dayton now wants to tax more. Our politicians do not want to resolve the reason why people leave the state after retirement (for better climate and don't want to pay higher taxes), just continue to alienate them so they possibly completely leave the state." Larry, New Brighton ($170,000)
"We have been known in the past as a progressive state; no longer. I am hopeful Mark Dayton can make a dent in that, but with the dumbed-down legislature, I'm not hopeful. It appears it is more important to denigrate government employees who are struggling than to ask the rich to pay a bit more, which won't hurt a bit but means a lot less contributed to any politician who votes to do this." - Laura, St. Paul ($200,000)
"I lived a good portion of my life in South Carolina. I experienced what it was like to live in a state that was not, for the most part, concerned a great deal about the shared life of the people. Government was viewed as a necessary evil and starved, and the quality of life for many people in the state reflected that prevailing attitude. It was most visible in the quality of the public schools. I never want to live in a place that does not value the things undergird the good of all residents, e.g., excellent education, environment, health care and support for those least able to care for themselves. Minnesota has traditionally done that, and I have loved living in a state that cares about its people, its resources, and its future. I have been chagrined at the diminishing level of stewardship of Minnesota's traditional values, and I hope the current elevation of personal and corporate wealth and its pursuit over the good of the entire state is a short-lived phenomenon." - Karen, Edina ($150-200,000)
"You should have a choice that includes 'not yet.' This proposal is typical of an out-of-touch guy like Dayton. He is as skewed to the left as Pawlenty was to the right. Why can't they stop spending significantly while increasing taxes moderately? Increasing taxes will just allow the politicians to spend more money. Maybe if they allowed us to ear mark our tax increase I would be more supportive. But giving the money to these career politicians is absurd." - Micheal, St. Paul ($250,000)
"Minnesota has built an excellent set of lifestyles based on education and progressive income taxes. Our social policy has prevented us from having so much poverty and misery that everybody's quality of life is diminished. I don't want to live in a low tax state full of a few rich and many desperate. Minnesota needs to get back on track in developing and maintaining appealing lifestyles supported by opportunity and fairness. In any case, the question isn't whether to live in Minnesota or another state, it is whether to live in Minnesota or Bangladesh. The states aren't that different, it's the cheap labor of other countries that cause businesses to seek competitive advantages in the global market. If businesses can't understand the benefits of contributing to Minnesota's social good, they should move their entire corporate staff to one of these lovely places so they can keep a close watch on their operations. " - Richard, Mendota Heights ($233,000)
"No. My business isn't something you can uproot. My employees are the reason for our success and we're not a commodity business." - Jason, Minneapolis ($400,000)
"So far, just threats. I know of one family that was looking to make the opposite move (Hudson to Eagan) that would certainly NOT do this should a tax hike anywhere near this magnitude go into effect. I know of a second professional that is considering whether to relocate to MN for a job offer and he asked me about this proposal. The approach taken by WI vs that by MN is extraordinary. Where do you think the marginal (private sector) job gets created?" - Jim, Eagan
"At our income level, we should be paying a lot more in taxes than we currently do. I could pay no income tax in Texas. I invite anyone who finds the taxes here unbearable to move there. I'll stick with the great amenities in Minnesota that are our common heritage - great education, great parks and outdoor recreation opportunities, and the many other services our state government provides. Secondly, I believe in community and solidarity. I strongly support Minnesota Care and believe we should be expanding this program. St. John Chrysostom said that if you have two cloaks, then the one in your closet is stolen from the beggar up the street. St. Anselm referred to personal property as original sin. My community and my life are diminished when those around me do not have basic needs fully met. "No man is an island, entire of itself; every man is a piece of the continent, a part of the main. If a clod be washed away by the sea, Europe is the less, as well as if promontory were, as well as if a manor of thy friend's or of thine own were. Any man's death diminishes me, because I am involved in mankind; and therefore never send to know for whom the bell tolls; it tolls for thee." John Donne, Meditation XVII. In spite of knowing that the public school teachers in Minnesota are among the best in the nation, our children attend private school because the public school teachers are given too many students and not enough resources to do their jobs. My family ends up spending far more on private education than we would in increased taxes if everyone shared the cost of adequately funded public education." - Robert, St. Paul ($230,000)
"The idea that 'job creators' leave MN because of taxes is absurd. People set up businesses here because of the productivity of the workforce and the high quality of life. Rich people and business owners don't "create jobs" out of the goodness of their hearts; they start businesses here to make money because this is a good place to do that. If a business owner with a palace on Lake Minnetonka threatens to leave the state because of high taxes, I dare them to move to Aberdeen, SD." - Paul, St. Louis Park ($175,000)
"Higher taxes mean less capital available for hiring and business creation. I am planning to start another business this year and if the tax rates climb I am able to establish the business in another state with lower rates. The world of fiber optic cable and the internet make business moves very doable. " - Andy, Brainerd ($140,000)
(h/t: Molly Bloom)
any idea how many families would fall in the new 'highest' level?
Love it. I'm on the bubble and likely to make more money in the future that would place me in one of the dreaded tax breaks and there is no way I'd move. That said, as another commenter mentioned, I'd certainly like some assurances that the extra money raised wouldn't go right to extra spending thus leaving us in the same situation.
I don't think any of the above posters would suffer from a 1-2,000 tax increase. 80-160 or so per month? Isn't that approx what is proposed? That's one less nice dinner out. I suppose if they all quit going to the same restaurant on the same night at the same time it would kill some jobs...but I don't really think most "wealthy" Minnesotans are "job creators" in the first place. I have yet to see a good analysis of who "they" are.
I have to chuckle at the whole "job creator" thing. When the pols have to resort to repackaging the word "employer" to "job creator." (In case you are wondering, it is because a public entity like the state or a county is also an employer. These guys are desperately wanting to distinguish themselves from "that.")
Denny Hecker and Tom Petters were large-scale "job creators" by your standards. How did that one turn out guys?
To Bob's 'job creator' comment: I'm still confused about this question. Would someone please explain? If someone making enough to fall into the proposed bracket was truly a job creator and truly concerned about paying too much in taxes, couldn't they use the excess to hire someone else, thus creating another job and lowering their tax burden? Aren't they making so much because they are actually taking the money out of the business and NOT using it to create jobs?
Does anyone have an idea of the percentage of people in this bracket who actually own businesses that employ other people? Does this 'job creator' claim actually include many people in the proposed tax bracket?
In the majority of the cited comments, it is inspiring to read the wisdom of these financially wealthy individuals. They prioritize value over price.
The "job creator" epithet, however, places them on the pantheon of demigods, merely on the basis of owning a business that needs other human beings in order to function. We must not underestimate the power of words.
Both my husband and I came to Minnesota to attend one of the great private colleges that make Minnesota their home (and add to the quality of life). When we graduated and decided to stay here to start our family together, many of our family and friends from our home states (Nebraska and Illinois) asked us why we would stay in such a "high-tax state" (in 1990). We answered that, although the taxes were high, you also received things for them. There were good roads, good education, good parks, good businesses, public investment in arts AND sports, and a community spirit of supporting everyone to be and do better. And we would make our home here. The better question to ask is not how many people will move if their taxes go up, but how many people will move if their taxes DON'T go up to support all the things that made us move here in the first place. If Minnesota continues its race to the bottom, there becomes less and less of an incentive to stay here. I didn't move to Mississippi, or Missouri. I moved to Minnesota for a reason. Let's keep it. And yes, we'll be impacted by Dayton's proposed tax increase, thankfully.
Bravo for those among the well-off respondents who understand and welcome their responsibility to pay their fair share. Bob Collins, did you ask these folks if they'd agree to go a s a group to testify at the legislature?
YOU BETCHA I'LL GO! With my property taxes going up 16% this year, this latest tax hike on us "wealthy" small business owners is adding insult to injury as we are already being forced to make up the difference in Minneapolis retirement programs for the unions to whom some idiot politician promised a guaranteed annual return on investment back before I was even out of high school. YES, I'M THINKING OF LEAVING AND TAKING MY BUSINESS WITH ME! When my brother started his second tech business a number of years ago, he moved to FL, a low tax and more business friendly state. I am thinking of doing the same with my business. Technology makes that a lot easier, but I guess most of you won't make the connection when you are wondering 15 years from now why MN is so behind in technology? You will just pass a new tax to support government investment in technology.
Don't worry, I'll leave you all my shovel!
You know, MaybeNotaMinnesotanAnymore, I don't care if you leave. In fact, please do leave. If you make that much money and you're too selfish to pay YOUR FAIR SHARE to maintain our quality of life, then I don't want you here! Why DO you make that much money? Why haven't you hired a couple people to work in your business with some of it? Unless you have 15 kids or an expensive health problem or something, you could live quite comfortably on much less than 350 thousand. How much of it do you contribute to charities to help our vulnerable citizens?
If you and your brother want to move to Florida, please do. I wouldn't want to live there if somebody paid me to do so.
@Jamie - but it's just so hard to live on $350k per year. Amassing bronzed statues of yourself is surprisingly expensive.
[In all seriousness, count me as another who is impressed with most of the wealthy people who have perspective. I don't want to hire people who are poorly educated and have no sense of moral responsibility. One of my biggest fears here is that we're becoming more like Florida and less like the exceptional state that I've known for most of my life.]