Column: Head 'em up, round 'em up, move 'em out
ST. PAUL - Four months ago - when the legislative session began - no one knew what to expect. It would be the first time in more than 20 years that the Democrats controlled both the House and the Senate as well as the governor's office.
Now, with just three weeks before the scheduled adjournment of the 2013 legislative session, the intent of the DFL lawmakers actions are clear. They are doing everything imaginable in their power to drive entrepreneurs and job creators out of Minnesota.
Just like a bunch of young cowboys driving a herd of cattle, the message these cowboys are sending to Minnesota's small business community is "head 'em up, round 'em up, move 'em out!"
If you examine the long list of anti-business proposals introduced during the last four months, it is staggering. They have proposed everything from the unionization of private child care businesses to a $3-per-hour hike in the minimum wage. They are also moving to place new fees on an array of things from the insurance policy for your home to the water you drink. In addition to a blizzard of new regulations and fees, these young cowboys are determined to round up everyone with earnings above the median income level and brand them with higher taxes. Their multi-billion dollar increase in taxes includes an income tax increase for those making more than $80,000, a sales tax on clothing, taxing Internet sales, a $1.60 per pack increase on cigarettes, and higher taxes on beer and wine.
They have even proposed to make Minnesota the highest-taxed state in the nation for those with incomes more than $500,000. No one should think they can escape these cowboys in their tax roundup. Everyone will pay more, whether it is your cigarettes, a beer, a haircut or even your new blue jeans.
In the Democrat "roundup" to drive entrepreneurs out of the state, Gov. Mark Dayton also included a provision to impose an income tax on anyone who lived outside the state for more than 60 days, just to make sure you're taxed even if you try to leave.
If you think for a moment that the current actions of DFL lawmakers won't drive business owners and upper income wage earners out of Minnesota, you only need to read three recent reports.
First is the Tax Foundation's 2013 report on "State Business Tax Climate Index." The report ranks all 50 states on how their states' tax system compares to others. In their report Minnesota currently ranks 45th -- and this is before the massive DFL tax increase hammer comes down on Minnesota's small businesses. Don't forget that 90 percent of small business owners report their business earnings on their individual income filing.
The second report to consider is the Kauffman Foundation's annual index of entrepreneurial activity. This recently released report shows Minnesota dead last for new business starts in 2012. Yes, Minnesota had fewer new business start-ups than economic powerhouses like Wyoming and West Virginia. Reflect for a moment that a high tax state like New York is advertising that they are cutting taxes in order to attract business to the "New, New York." Meanwhile, here in Minnesota, we are placing higher taxes on anyone who has a job.
The third report that highlights trouble ahead for Minnesota's business development is a new report by the Center of the American Experiment. The report is entitled "Minnesotans on the Move to Lower Tax States." The report shows that Minnesota loses thousands of people and their income to lower tax states every year. It states that "Minnesota's tax policies directly impact economic growth and opportunity in the state."
These three studies show an alarming trend in Minnesota. They illustrate a decline in innovation and job creation that will have a devastating impact on Minnesota's long-term economic growth. Some legislators think that by providing millions of taxpayer dollars to large corporations like the Mayo Clinic or the Mall of America, it will sustain Minnesota's economic long-term growth. What they forget is the 70 percent of Minnesota jobs are provided by employers with less than 100 employees.
Small business is the economic engine that drives Minnesota's economy. If Gov. Dayton and Democrat legislators succeed in driving up taxes and increasing the regulatory burden on small business, the consequence will be to "head up, round up and move out" hundreds of entrepreneurs and small business owners from across the state. Today the only sound emanating from the Capitol hallways is "yeehaw" as DFL lawmakers continue their drive to force business owners out of Minnesota.
Phil Krinkie is a former state representative and currently president of the Taxpayers League of Minnesota.