“There are going to be some drastic changes for me, because I happen to be in that zone that has been targeted both federally and by the state and, you know, it doesn’t work for me right now.”
-Pro golfer Phil Mickelson on why California’s tax increases may prompt him to leave the state
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And you thought the rich didn’t pay taxes.
Then again, as the “revenue raisers” were quick to remind Mr. Mickelson, the fortunate few still have plenty left even after the taxman takes half their income. So quit complaining and just lie back and enjoy it, right?
Alas — no matter how much our covetous culture demonizes them, the working wealthy are apt to do just the opposite. And if you think that won’t make a difference to your state’s economy, consider this: According to economist Art Laffer, 62 percent of the 3 million net new jobs in the last decade came from just nine states without an income tax.
States such as California and Illinois — which seek to punish the well-to-do with higher levies on earned income — are not only digging out of deficits, but the state of their economies gives new meaning to the term “basket case.”
As I wrote on Dec. 9 (“To plug state jobs drain, try this plan”), if Minnesota wants to avoid becoming a cold California, it needs genuine, progrowth tax reform — not the $1.1 billion income tax hike Gov. Mark Dayton has proposed for 54,000 Minnesotans. Or even worse, the $2 billion worth of private earnings House DFLers plan to confiscate by adopting the second-highest income tax rate in the nation: 11 percent.
Why, there’s even a “snowbird” tax just for those who summer at the cabin (all the while paying sales, gas and property taxes) but whose permanent residence in another state affords them a lower income tax rate. Can’t have that, say the looters, especially if you’re planning on hiking Minnesota’s biennial budget another 8 percent.
The Democrats’ greedy hand assumes it’s “fair” to tax one set of Minnesotans and not others. But having different rules for different citizens is the antithesis of “fairness” and reeks of the arbitrariness of despotism.
Of course, there’s only so much money at the top, so the DFL-controlled Legislature already has a 9.5-cent-a-gallon gas tax hike waiting in the wings, along with a quadrupling of the metro sales tax.
It doesn’t have to be this way. In 37 states, as in Minnesota, one party controls the legislative and executive branch. However, the majority are moving in quite a different direction than St. Paul. So with apologies to Dickens, let’s take a quick look at a “tale of two states.”
North Carolina for the first time since Reconstruction has a Republican governor with a GOP statehouse. The first priority for lawmakers in Raleigh recovering from decades of Democratic rule is reducing the government’s burden on working families (even wealthy ones) by reforming the tax code.
In fact, the only question in the Tarheel State is whether to assess a flat 5 percent rate on all income and retail sales (sound familiar?) or to eliminate the North Carolina income tax altogether by broadening the tax base.
The contrasts, predictably, don’t stop there. While North Carolina is now embracing energy exploration, Minnesota’s environmental lobby clings to our disastrous California-style Renewable Portfolio Standards; while North Carolina’s newly elected Gov. Pat McCrory has announced he will not expand Medicaid enrollment, Dayton may be the nation’s most enthusiastic chief executive implementing Obamacare; and while Raleigh is promising cleaner elections through a new voter ID law, Democrats in St. Paul are attempting to pass even less stringent voting standards in Minnesota.
Dayton likes to mock the reformers who suggest it’s counterproductive to double down on big taxes here. “I’ve heard this for 30 years,” he says, “everybody’s going to leave the state …”
Funny, that’s exactly what they used to say in California.
Jason Lewis is a nationally syndicated talk-show host based in Minneapolis-St. Paul and is the author of “Power Divided is Power Checked: The Argument for States’ Rights” from Bascom Hill Publishing. He can be heard locally from 5 to 8 p.m. on NewsTalk Radio, 1130-AM, and on jasonlewisshow.com.