Eric Wieffering has covered Minnesota's economy and business community for more than two decades. His column appears two to three times a week, including Sunday.

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Taxes and jobs: an age old debate.

Posted by: Eric Wieffering under Business trends, The economy Updated: June 1, 2011 - 11:17 AM

Today's column revisits the jobs/taxes debate from a historical perspective, courtesy of a big assist from Marvin Taylor, a doctoral candidate in geography at the University of Minnesota.

Obviously, the world is much changed from 1954, when combined state and local spending totaled $649 million.

What's different? The size and role of state government, for one thing. It's unlikely that Minnesota was the larget employer in the mid-1950 - so that's a cost that wasn't much of a factor in 1954. Also, spending on "health, hospitals and welfare" consumed only 16 percent of all state and local spending in 1954. Today, health and human services eats up more than a third of the state budget alone.

Though a comparative economic laggard in the 1950s, intentionally or not Minnesota was over-investing in education relative to the rest of the nation. In 1954, the national average for state and local expenditures per capita was $189. In Minnesota, it was $207, and that difference of $18 per capita, according to the 1956 report, "was approximately equal to the differences in expenditures on education."

If the column or my headline left the impression that the study resolved, once and for all, the question about the role of taxes in job creation, rest assurred that it did not. The debate about Minnesota's business climate heated up again in the '60s and especially the '70s, when 3M cited a hostile climate as one of the determining factors in its decision to expand in Austin, Texas. Back then, the debate was as much about regulation as it was tax levels.

Finding a copy of the Report of the Governor's Tax Study Committee, 1956 is not easy. I viewed a copy at the Minnesota History Center library. The Minneapolis Public Library does not have a copy on hand, but I'm told the University of Minnesota does.

Not available on Kindle, near as I can tell.

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