The “b” as in billion has gotten most of the attention generated by Center of the American Experiment’s new report [PDF] on Minnesotans moving to lower tax states at a net cost of nearly $1 billion in lost income.
Yet the report’s surprising findings also contradict commonly held assumptions about who’s leaving Minnesota, revealing cracks in our workforce and ramifications for the state budget that should unnerve policy makers in St. Paul.
The center’s analysis found that Minnesota’s economy on net lost $948 million in adjusted gross income between 2013 and 2014, based on the Internal Revenue Service’s most up to date data from tax filers who moved in and out of Minnesota.
That deficit represents the largest net income loss to other states ever reported for Minnesota, nearly double the $490 million outflow of three years ago.
While it will require more than one year of data to fully understand the dynamics, the sharp increase came in the first year of a huge tax hike levied on top earners by Gov. Mark Dayton and the then DFL-controlled Legislature.
Where are Minnesota households and income moving? With a few exceptions, Minnesota is losing income to lower tax states to the West and the South. Minnesota tends to gain income from higher tax states in the Midwest and Northeast.
For decades, Minnesotans have understood that many retirees with means head south for the winter, “snowbirds” drawn by the friendlier weather, as well as tax climate.
“Hopefully, this trend doesn’t continue or else all of our retired folks will establish residencies in other lower tax states and only come back for a few months in the summer to enjoy their lake cabins up north,” one Twin Cities resident emailed after reading the report.
Still in the workforce
But newly available IRS data reveal that active participants in the workforce, not snowbirds, comprise the majority of tax filers leaving our state for Washington, Colorado, Texas and other lower tax destinations.
People in their prime earning years, including many high wage earners, represent a large portion of the net loss of taxpayers and income. Fully 71 percent of the income loss quantified in the IRS data comes from people under 65 — people active in the workforce who had been contributing to our economy.
The breakdown shows individuals between the ages of 35 and 54 constitute nearly 40 percent of Minnesota’s net loss of tax filers. On top of that, another 23 percent of this net loss is from people who fall between the ages of 55 to 64, most of whom are still active in the workforce.
More unsettling facts emerge the deeper you drill into the data. For instance, Minnesota loses more college age kids than the state gets back, a finding that corroborates concerns over a potential brain drain previously flagged by the state demographer.
Tend to be high earners
In addition, people exiting the state on net tend to be higher earners, whose annual take-home income exceeds $100,000. High earners are often entrepreneurs and innovators who generate jobs and pay more taxes. But based on their movements as tracked in the IRS data, Minnesota has become mired near the bottom of the list of least attractive jurisdictions for high-wage earners, along with New Jersey, Illinois, Connecticut, Vermont and the District of Columbia.
At the same time, Minnesota serves as something of a magnet for lower income workers. Between 2011 and 2014, Minnesota gained more than 2,000 people who live in households earning less than $25,000. And those are just the people who file tax returns as IRS data do not track low-income movers who don’t file.
Bottom line: Minnesota is gaining individuals whose income levels often result in the need for public services, while losing high income earners whose taxes fund public services.
Clearly, the loss of income and individuals to other states identified in “Minnesotans on the Move to Lower Tax States 2016” will present significant challenges to the state budget, economy, workforce and quality of life.
It’s concerning to consider where we’d be without the vaunted quality of life and other amenities that prevent more Minnesotans from exiting the state.
“My wife and I would have long ago decamped for Florida or Texas, were it not for her Scandinavian heritage and family ties,” one individual wrote in response to our report.
While the decision to move to another state involves numerous considerations, these findings conclusively show Minnesota’s high taxes factor into the decision. The IRS data point to the necessity of revising Minnesota’s tax structure in order to reverse current trends and keep the caliber of worker needed to expand opportunity for all state citizens.
Tom Steward is a government oversight reporter at Center of the American Experiment.
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Taxes less relevant than other factors.
For people in the workforce, taxes are not a significant issue. Much more important are things such as: Access to markets, workforce, technology in the area, startup funding, and other factors that would cause people to move elsewhere. I know when I was looking at starting up a new venture, the business would not have been located in MN because there was minimal use of the product in MN. It would initially be all across the southern and western US, so being in that area made sense. The product had many applications in many industries, but being located near where it was used a lot was a rational business decision. We were offered NYC VC startup capital, but the amount offered was not adequate for our needs. So the business never got past that stage. As the patent has ended, anyone can now make the item. So there is no reason to try to begin that particular venture again.
The Center of the American Experiment…
…is an advocacy group that corrals facts that agree with its ideological predisposition and downplays or ignores facts that counter it.
The Center on Budget and Policy Priorities might be said to be its progressive/liberal carbon copy but for the fact that it can point to independent studies that support its ideological predisposition.
“The vast majority of academic research using sophisticated statistical techniques concludes that differences in state tax systems and levels do not have a significant impact on interstate migration”
http://www.cbpp.org/research/state-budget-and-tax/state-taxes-have-a-negligible-impact-on-americans-interstate-moves
Hmm
Gonna just infer that the CAE also assumes these folks to be members of their conservative base. Seems like a win to me. Plenty of us left willing to take on the onerous burden of increased wealth gained by filling the roles of those who aren’t.
It must be the weather….
At a recent local DFL legislative ” spin session” the representatives talked in glowing terms of Dayton taxing the rich, raising the minimum wage to $15, paid family leave, raising to gas tax on the poor and middle class, spending the surplus, and continuing the tax on social security recipients along with many more regulations on businesses.
In the next breath they wondered why MN is losing population and will probably lose a seat in the U. S. Congress?
Mr. Myron Frans, the Commissioner of Management and Budget could not even tell the public how much the MN budget was when Dayton took office and how it compares to what the budget is today.
Yes – many are voting with their feet.
Nonsense
This argument has been debunked repeatedly. Instead if trying to turn our successful state into a failure like North Dakota or Wisconsin, why doesn’t this guy just vote with his feet.
Good Question
The distinguished intellects at the Center for the American Experiment spend so much time kvetching about Minnesota that I have to wonder who is forcing them to stay here.
Seriously?
I moved here from California when I retired. Taxes notwithstanding, I was able to buy a very nice home and my retirement income goes a LOT further in this pleasant place. No way on earth was I going to move to a neo-hell like Wisconsin or Kansas.
So
You moved from a higher tax state to a lower tax state. Please read some of the other posts about people leaving the state for lower taxes after retiring, they seem rather mean. Thanks for demonstrating that people do indeed move from high tax states to lower tax sates, even without better weather!
A few flaws
The analysis presented here, though certainly sincere, has a few flaws:
1. The report identifies that most migrations to another state are of people in their prime earning years. However, the IRS notes that the data overemphasizes that population — the poor (which includes young college-age students) and the elderly who are not required to file tax returns because they did not earn enough money to need to file a tax return are not reported in the data. This may seem to be a minor issue, as those with low incomes don’t significantly impact the amount of income entering or leaving the state.
However, the data also does not include those who filed their returns in October or later in the year; a population that the IRS identifies as being comprised of taxpayers who filed extensions because they have large, complex returns, and thus are almost exclusively very wealthy taxpayers. A single million-dollar earning family moving into Minnesota each year during the Clinton administration would be enough to entirely negate the reported negative income outflow in this report for the entire reporting period.
2. Another flaw in the dataset would lead to exactly the result specified in the CAE report: since the dataset only compares the Social Security Number of the primary taxpayer on the report for its year-to-year comparisons, if a joint filing couple divorces and files separately in the following year, the data will look as though there was a net migration out of the state, as the former joint filer is not included in the following year data. The converse, two independent taxpayers that marry and file jointly in the following year, is not comparable, since, though the former independent taxpayer is no longer matched in the dataset, that taxpayer’s income is still included as part of the now-joint filing. As a result, a relatively balanced number of marriages and divorces will appear in the data as net migration out of a county, and an excess of divorces will appear to be an even larger migration out of the county. Based on the way the data is reported, it does not appear that the CAE can account for or adjust for this bias in the data.
Note that both of these limitations are plainly spelled out in the “U.S. Population Migration Data: Strengths and Limitations” document cited in the CAE report.
3. Even if we assume the errors in the dataset largely balance out and can thus be trusted in the aggregate, the data doesn’t directly support the conclusion that state income tax rates are the primary motivator for income migration out of the state. The CAE report contains a chart of net income migration of taxpayers earning more than $200,000, and suggests that the primary reason for this migration is the state’s tax policy. (“Relative to other states, Minnesota is losing these top-earning taxpayers and their income at
an alarming rate. Table 4 identifies and ranks each states’ net income migration rate for people
earning more than $200,000 for the 2011-12, 2012-13 and 2013-14 periods. Minnesota’s
rate dropped from -0.79 percent for 2011-12 to -1.42 percent for 2013-14 and the state’s ranking
dropped from 37th to 47th—ahead of only New Jersey, Illinois, Vermont and D.C. These data
show that Minnesota is one of the least attractive states to top earners in the country.”, p.15)
Yet the data itself doesn’t wholly support that conclusion. During the period covered (the three state fiscal years from 2011-2012 through 2013-2014), the state of Hawaii is in the top five ‘high earner migration’ states, despite Hawaii having a more progressive tax rate than Minnesota (data from the Tax Policy Center – http://www.taxpolicycenter.org/statistics/individual-state-income-tax-rates-2000-2015 – Hawaii’s top state income tax rate was 11% for earners earning over $200k, while Minnesota’s was just 9.85%). Likewise, though California has a tax rate higher than Minnesota, and has a negative net income migration over the three fiscal years at issue, its net outgoing migration is lower than that of Minnesota, and Figure 3 (a graph of the US showing net Adjusted Gross Income migration into and out of Minnesota by state) shows that California is in the top 5 destinations of taxpayers leaving Minnesota, despite its overall negative income migration overall. Looking at low-tax states with a weather climate more similar to Minnesota also shows that taxation is not as significant a factor as climate — Wisconsin’s tax rate on high-income earners is a full two percent lower than Minnesota’s, yet Wisconsin also shows a net negative migration in all three fiscal years (and actually shows greater outgoing migration than Minnesota in one of the three years). Similarly, Alaska has no state income tax, yet its outgoing migration is negative in all three years and is greater than Minnesota’s in two of the three fiscal years studied. If differences in state income tax rate where the primary driver of the reported net migration out of Minnesota, we would expect Wisconsin and Alaska to do much better
Ultimately, if the CAE’s conclusion is correct, and Minnesota has suffered billions of dollars of income migration without compensatory incoming income, including nearly a billion just in the two years following Governor Dayton’s enhanced high-tax bracket coming into effect in 2013, one would expect to see that in the state’s income tax receipts. We do not, in fact, see this effect — state income tax receipts increased by over a billion dollars in 2013 over 2012, and continued to increase in 2014 and 2015. Anyone paying attention to the news, and the various arguments over how to spend and/or invest the state’s budget surplus during this period will be unsurprised by this information. (Data from the MN Department of Revenue – http://www.revenue.state.mn.us/research_stats/Pages/State_Tax_Collections_by_Type_of_Tax.aspx – specifically Table 1: Dollars of Collection by Type of Tax)
For these reasons, I find the Center for the American Experiment’s argument that high tax rates are driving a migration of high income Minnesotans to other states to be unpersuasive, and I would recommend that others review the data and come to their own conclusions.
—
David Wintheiser
Thanks for this
I almost wish MinnPost had a “like” button. This was a very useful and insightful response–thank you.
I agree with Ms. Mack
Thank you for the thoughtful comment, Mr. Wintheiser. It was a compliment to the discussion rather than a rant. That is much appreciated.
Thank you.
I look forward to Mr. Steward’s reply.
Offsetting factors
in your second to last paragraph that needs to be considered – because the change in the unemployment rate and the increase in minimum wages certainly added compensatory incoming income. The unemployment rate decreased by nearly 1¼ % and the minimum wage increases most certainly resulted in more income tax collected in the last 2 years than in the years prior to Dayton’s income tax increase. If one then adds the additional tax increases being collected by those who stayed (like me), one would expect that the amount of income tax revenue received in 2014 and 2015 would certainly be much higher than the previous years – even if some higher income people relocated.
The more important discussion is the “opportunity cost” of those leaving. I am not going to say its a billion dollars nor am I going to say it is a primary factor. But I know several small businessman who have factored the income tax rates (and the high estate tax rate MN has) into their decisions to buy retirement homes elsewhere and start the “relocation” process earlier than they might normally consider.
But again, is that loss revenue significant vs the amount gained by the tax increase? Not sure. But I have not really seen anyone be able to quantify it either.
This is really about snowbirds
Know what? This is also true for low-tax South Dakota. The study tries to pin migration of wealthy people on taxes, when its blindingly obvious most wealthy people move to Florida/AZ/TX because of the weather. Its just the normal life cycle of a very good economic landscape: young people move here because of the jobs, make a lot of money, and retire to the South.
Brief notes
“My wife and I would have long ago decamped for Florida or Texas, were it not for her Scandinavian heritage and family ties,” one individual wrote in response to our report”
No mention of taxes
If $948 million moved out of Minnesota in 2014 we would be seeing tangible effects by now.
I note the author needs 3 years of data to get 2,000 more poor people but only uses 1year for everything else.
Who funds the Center for the American Experiment ?
Well at least suburban Minneapolis is a nice working environment for Peter J. Nelson and Tom Steward ! Thanks Koch Brothers !
Good lord…
…we have an economy that’s buzzing along just fine without these folks. Imagine the number of people Wisconsin must be losing, that number must huge.
Far more persuasive than Mr. Steward’s faux-hand-wringing over Minnesota’s loss of wealthy citizens, as if we couldn’t survive without a sufficient number of millionaires and billionaires, is Mr. Wintheiser’s quite reasonable explanation – one that, in general, has been fairly widely reported in the ‘Strib, MinnPost, the PiPress, and other media outlets:
“…if the CAE’s conclusion is correct, and Minnesota has suffered billions of dollars of income migration without compensatory incoming income, including nearly a billion just in the two years following Governor Dayton’s enhanced high-tax bracket coming into effect in 2013, one would expect to see that in the state’s income tax receipts. We do not, in fact, see this effect — state income tax receipts increased by over a billion dollars in 2013 over 2012, and continued to increase in 2014 and 2015. Anyone paying attention to the news, and the various arguments over how to spend and/or invest the state’s budget surplus during this period will be unsurprised by this information. (Data from the MN Department of Revenue – http://www.revenue.state.mn.us/research_stats/Pages/State_Tax_Collection… – specifically Table 1: Dollars of Collection by Type of Tax)”
If the state was losing hundreds of millions of dollars of income and associated taxes, without any compensatory increase, it would show up in state, county and municipal budgets, and there would be no mention, much less discussion, of what to do with the current billion-dollar state budgetary surplus. Mr. Steward is pushing the CAE’s ideological crusade. He may even believe what he writes. That doesn’t automatically make his conclusions correct ones.
Correlation <> causation
The author claims “these findings conclusively show Minnesota’s high taxes factor into the decision,” but cited no actual evidence. To prove what is claimed, we need a study identifying why people leave. Without that it’s just ideological spin.
Well, we certainly know from this article why poor people are “migrating” to Minnesota: It’s the great yearly $20,000 wages they can earn! I mean, our lousy minimum wage is a real magnet, according to this guy.
When I read that we have gained several thousand poor people through immigration–in the context of the author’s claim that we are losing wealthy people–I actually started to laugh out loud. At best, we have more extremely low wage people because the business world is increasing the number of minimum-wage and temporary and part-time jobs for people already here. I.e., more Minnesotans are being paid worse than before.
One major contradiction in this article that even lay people can perceive immediately is that the author claims we’re losing wealthy retirees, then cites figures about how most of the out-migrants are people who have taken well-paying jobs in other states, people of working age rather than retirees.
It’s these kinds of plain nonsensical statements that show ideological bias and intention.
Assumptons
Republicans highly value money and hate taxes (at least the ones they have to pay), so if people move in an out of Minnesota, obviously it is due to the universal explanation: “high taxes.”
If you actually listen to people, the most universal complaint about Minnesota is “winter is too cold and too long” – and if you don’t think Minnesota’s act on their feelings, just visit the airport and observe people fleeing the cold. As people get older, their children disperse (often not returning to Minnesota if they go to school out of state), it is very easy to downsize and move to a place like Florida, at least until the terrible healthcare you get there (expensive and of poor quality) results in people moving back to Minnesota, a place that takes care of people in need.
As for moving to North Dakota, only a village idiot doesn’t know what caused that to happen. Oil. A person with limited job prospects here could go to the oil fields and make a lot of money. While some people uprooted their families, others didn’t. With the boom turning into a bust, they are stuck in a remote location without a lot of other job opportunities – where they can muddle through, or move back to a place with a wider range of opportunities.
Another thing is going to happen. Minnesota is sitting pretty in the middle of the rise of global temperatures. Unlike,Florida, we are not going to see our lovely beachfront property submerged, and in 100 years, with current trends, half of the state under water. Nor are we in a position like those who live in Arizona where the desert is going to get hotter and drier, with the aquifer depleted. We have plenty of water, a highly educated work force, low unemployment, plenty of people in the “inventor class” – despite the cold.
For people who have great wealth and hate paying taxes, Florida or Arizona might seem like a great solution, particularly if you can spend 3 to 5 months and 29 days on a Minnesota lake – ideally Minnetonka, and avoid paying state income despite essentially living here a quarter to a half the time. If you made your money here and think you don’t need to show your appreciation by happily paying your taxes, well then, go someplace where your “values” are shared..
Nothing better than to listen liberals howl when someone points out that folks would like to keep more of their OWN money by moving to a state where taxes are lower. How does that affect you? If a person wants to move to warmer climate with less taxes isn’t that his or her right? Sounds like this article struck a nerve with some.
I am one of those folks who moved to a warmer climate and no longer am a resident of the state of MN. I don’t feel bad at all about spending 5 months at my cabin in N Minn, which I pay the state thousands of dollars in property taxes. I also buy a vehicle from local dealer which I leave here, pay for license and tabs, pay state/county taxes on 640 acres of hunting land, buy 4×4’s, boats, jet ski’s also license them along with trailers here in MN and am happy to visit many restaurants, shops and service centers here. I paid taxes here for nearly 40 years and don’t feel I owe the state any more money.
So Mr. Stegner, I did move to a place where folks do share my values, after a lifetime of paying $100,000 of thousands in taxes in the state in which I was born in.
40 years?
How could you take it? I hope it wasn’t because you were making more money in Minnesota? I would’ve been gone to one of those low tax paradises like North or South Dakota about 39 years ago.
Sometimes you have to wonder about those who stay in a place for 40 years even though they can’t stand it.
Hey, Joe, Where You Goin’ with that Money in Your Hand?
If you’re actually paying the state “thousands” of dollars in taxes,…
then it’s not a “cabin,” is it?
If taxes are the concern
they must all be moving to Alaska, which has no income or sales tax and which has a real property tax rate of just over 1% on a median value home. Or, perhaps New Hampshire, with neither income nor sales tax, but among the highest property tax rates at 1.86%. But then, they also have high costs of living (price parity): Alaska 140-160, New Hampshire 120-140. Minnesota? 81-101.
A Glaring Error
This report asses those of a working age leaving the state and taking with them all their taxes. BUT it fails to realize that Minnesota does not have a dearth of open executive positions – those who leave are often replaced. One would assume that those in these new positions would earn a similar wage and pay similar taxes. This is why state revenues have gone up and Minnesota has the enviable task of handling a budget surplus. If we had really lost nearly a billion in revenues we’d know about it.
Regardless of this so called economic study, ultimately we’re discussing a choice. You believe higher taxes create a better place to live or you don’t. These affluent (let’s admit it, white) people don’t. They believe in trickle-down economics and think the market will provide for all. That’s why they moved to these low-tax states. I personally think there is a moral and economic imperative to invest in the common good through taxes, so I’ll stay here. We’ll see who wins out in the couple of decades shall we?
Taxation
If we turned ourselves into Florida without the ocean, would people be flocking to Minneapolis?
Interesting Point
With global warming, Florida could soon lose its climactic edge, so you never know.
More out-migration? Nonsense !
Out migration 1930’s to 2012—steady at 27 to 29%. That’s a pretty stable figure over 80 years.
http://www.nytimes.com/interactive/2014/08/13/upshot/where-people-in-each-state-were-born.html#Minnesota
I would bet that similar organizations as the AEI have written the same article regarding intolerable taxes driving decent people from the state for that same 80 years.
Complainers gonna complain.
Why is the State of New York so heavily advertising its tax reductions and tax free opportunities?
Politicians don’t understand economics but they do understand perception, and the political benefits of propagating conventional wisdom. Republicans for years now have pushed forward the idea that low taxes are beneficial to business and the economy. But the truth is a lot more complicated than that. To look at it superficially, we find that business and the economy can thrive during high tax periods and struggle during low tax periods. The American economy boomed after WW II, when some marginal tax rates were incredibly high. The economy thrived during the high tax Clinton years, and struggled and ultimately came very close to collapse during the low tax George W. Bush years.
New York politicians have lowered taxes, but what they can’t do is make New York an easy place to do business and live, and the reasons for that can be determinative when businesses are making relocation decisions.
Why Do We Think All Those with Resources are Alike?
I have no doubt that there are people who, having made an excellent fortune in Minnesota,…
due to a combination of ingenuity, luck, hard work, and the blessings provided by God,…
but equally due to the quality of all the infrastructures and the quality of life Minnesota provides,…
and due, as well, to the work ethic of their fellow citizens,…
believe they should get a free ride after they retire.
Of course it’s not that they lack the money to pay their taxes after they’ve retired,…
just that they think they, being retired, should now be allowed to ride on the backs of all those who are still working.
When such people leave the state of Minnesota for other places where they can get such a free ride,…
they do us all a gigantic FAVOR,…
because they’re EXACTLY the people with a lot of time and resources on their hands,…
who are perfectly willing (and dysfunctional enough),…
to use that time and those resources fighting AGAINST keeping strong,…
all the infrastructures and quality of life features of Minnesota that enabled their success in the first place,…
exactly the people who will scream about local property taxes,…
while being the first ones to call up the local highway department if a crack or pot hole appears in the street near their house.
We don’t need such people in Minnesota.
In their retirement, they are a fiscal, intellectual, emotional and spiritual drain on every place they live.
They do their best to create societal blight,…
all the while complaining when their efforts cause it to happen.
They do us a favor when they leave.
We all know who they are in our communities and we’re only to happy to see them depart.
There are far MORE people with resources who stick around,…
and in their retirement, willingly pay their taxes so that the NEXT generations can benefit from the same state, county and local systems which enabled their own successes,…
who seek to enhance and enrich the communities, churches, and society which surrounds them.
These are the ones who stay.
They bless us all with their continuing presence and we’re happy to help them in any ways we can as they grow older.
People DO move….
Age-cohorts, taxes and weather are all reasons that people choose to move….I am in Naples FL where, we are boomers who work in consulting biz (clients are on east coast, and always have been.)
In MN we were unable to deduct our MN income taxes from our 1040 due to AMT…. That tax was essentially a non-deductable fee to claim residency in MN…. When Dayton raised the top rate at the same time that the Federal Gov raised the income tax: ….well, it became too annoying to ignore….
Our property tax on MN property went up 32% last year alone, and whle we plan to keep it for now, there is a limit….. As the boomers continue to transcend from contributors into becoming a cost, the genX and Millennial generations are going to feel the load… MN government keeps adding programs that will never die, and the yearly nut just grows and grows…..This is all true on the federal level too, and federal taxes will have raise, and the states that impose income-taxes are going to have less options to incease revenues without driving more residents out….
While in Naples, (only last 18 months) we have encounterd many many new residents that hailed from high-tax northern states (basically, everyone we meet).
Our MN income taxes alone represented a potential substantial mortgatge payment,…. So, we sought out a primary residence in FL and moved consulting biz south to income-tax free state, and then we come north in the summer…..
Another loss for high tax states: these boomers are also taking their ‘shopping’ with them (setting up households, buying cars, etc.) and the impact of that is never mentioned. I am talking about the top 20% of earners (who, BTW, pay 84% of Federal Income-taxes). A certain percentage of them are seaping south DAILY…….. and that is reflected in this almost billion dollar decline in MN’s revenue cited in article.
Naples is exploding with affluent new arrivals from IL,CT,MN,NJ etc….. They are driven by taxes, weather and the community of like minded humans…. This boomer trend is just beginning and 10,000 Americans turn 65 every single DAY…… We personally have met many……and have only lived in our new dwelling for one year…..
There is truth to this article and it is using data two years old….the future data (representing present time) will back up this trend as far as this migration goes.
There may be more promise with those who choose to move into MN: where there is a great quality of life and should attract younger well educated people. MN should be careful not to smother the goose……..
Yep
And then you’ll all pass into the great beyond, and life will go on as always. What you’re describing is a demographic trend, not an economic one. The folks who are “like minded” in my age cohort have no problem carrying our weight, and value investment in societal infrastructure more than increasing their personal net worth. Another 20 years time and this will be a moot debate as your side of the argument will have no one left to carry it.
Agree, and well put….
Agree….. A trend indeed….and really, it is not our problem to solve (although we ARE mostly responsible for creating it….and guilty leaving it behind)….
Furthermore, the times ahead and beyond could be better than anyone now alive can fathom… In the interim, we boomers leave the next generations with epic debt and a pension-less mass and many other social challenges to which we all hope you rise to meet…. It feels like we Americans are at an inflection point where what is ahead will be quite different than what we (boomers) anticipated (and many of us planned ahead for) ………and we are now witnessing the beginning of grand pivot….
A 32 percent increase in property taxes? Wow, the value of your house must have risen quite a bit. One would think you would be happy about that.
Upon Sale
Value only matters when you go to sell it. Whereas taxes hit one every year. 🙂
True
But an increase in value is still a good thing and is indicative that people want to live here.
Full disclosure up front, please
This article had some surprises for me that had nothing to do with economics and demographics. I was surprised that Tom Steward isn’t a TV reporter anymore. I was surprised a right wing think tank like the Center for the American Experiment has “reporters.” And I was surprised MinnPost would present an article by a reporter from a right wing think tank and not say that up front. Or call it opinion.
Joe annd Charles
Hi Guys,
I agree that you made a very rational decision… I am pretty sure everyone here would make a financially sound decision to move to a low tax state when they can work it into their life. My parents changed their residence to SD 10 years ago or so, and they spend the Winters near Miami. (for the concerned folks here, as farmers / landlords they still pay a boat load of MN property taxes)
I am curious who would willingly pay 10+% to the government and pay a state estate taxes when they really don’t need to. I mean who would say “I want to pay $10,000+ per year in taxes rather than save it for my children or help them with their bills…
I know it is hard for some Liberals to understand, however people with good money management skills (aka rich), take many things into account before making big decisions. And $10,000+ / year in unnecessary expenses will make the list.
After paying 100’s of thousands of dollars in MN taxes during my working career, I will have no problem changing my state of residence when it works for my family,,,
Rauses hand
I would rather put out my own eyes with rusty farm implements than contribute 1 red cent to the economies of backwater Southern “insert noun of your choosing”. I could really care less if I lose a few bucks to give my kids as I will teach them to value society as I do, and really, if they are put out by it after I die, it’s not like I will know. I really don’t think they will be though as I expect their generation will be even more attuned to the glaring inequalities created by the flaws of capitalism, and will be even more likely to make them a feature of long past history.
Unfortunate
It is unfortunate that you think so poorly of the folks in other states who see the world differently than you do. And for people with a million dollar net worth at the time of their retirement and much of it taxable, we are not talking “a few dollars”… We are talking 10s of thousands of dollars. I think I will give it to charity or my children rather than the bureaucrats.
http://www.kiplinger.com/tool/retirement/T055-S001-state-by-state-guide-to-taxes-on-retirees/img/retiree_tax_map.png
About as unfortunate
As those folks, and too many around these parts, regarding anyone not of their mindset as slothful, free loading, “takers”. Folks whose lives would only have value were they to come around to the conservative mindset, follow the proscribed conservervative “steps to success”, and become productive cogs in transferring wealth to their betters. Thanks, but I’ll stick to the farm implements.
The Open Question
Below are related thoughts and a question.
https://www.minnpost.com/eric-black-ink/2016/04/things-are-getting-better-slowly-because-government
Like all organizations of people, our country will only maximize the “Life, Liberty, and the Pursuit of Happiness” promise if everyone is a productive and responsible citizen. Meaning that everyone helps to row the boat.
Unfortunately though our society provides welfare for many and free K-12 education for all. Many of our young citizens are failing to become academically proficient and seriously employable. In a large part because of their parental role models and because the public education system rewards tenure over results.
Ironically as I have said before… The 10% will make money whether the American workers succeed or not. They and our consumers just invest in the countries and companies where the government and citizens support excellence, effectiveness and efficiency. And the countries and citizens who don’t will continue to struggle.
My point is that society and tax payers are investing between $130,000 to $260,000 into each and every child in America. (more in some cases) Much of which goes into the pockets of Teachers and Administrators. Unfortunately millions of students each year can not achieve basic academic proficiency.
And after the Parents, Teachers and Students have failed to make good use of this huge investment, the folks on the Left demand that we continue to send more money to these folks… I am curious about the rationale?
What does it mean to be a responsible citizen from your perspective? I like Kennedy’s view.
“My fellow Americans, ask not what your country can do for you, ask what you can do for your country.” – John F. Kennedy
CAE Study
I ready the full report, and the op-ed piece in the Strib and MinnPost. One of the states that was high on the list was California…but neither op-ed mentioned that. Also high was Washington state, which may have no state income tax; but they have a much higher cost of living. Housing in the Seattle area is extremely expensive, and a bottle of Vodka that you can buy at one of the big box liquor stores in the Twin Cities for $13 will cost you $35 in Seattle…they tax everything but income. I lived in one of those no income tax states in the south for 30 years, retired and moved back to Mn. My overall cost of living didn’t change, in spite of income taxes. Property taxes are lower for much more house, utility bills are far less…and I can swim in a lake with no snakes or tree stumps….no regrets.
The grass is always greener and the water sweeter:
on the other side of the state line, doesn’t necessarily mean the cost of living, is less as well:
Cost of: same worse, better?
Electricity (Air con 8 out of 12 months)
Sewer and water (Water and quality of water availability)
Food bill
Education
City & State services (Police, fire, parks, recreational, etc)
Fresh vs. Salt water
There is a very long list of “other” besides taxes that should be on the list.
We made a decision 35+ years ago to relocate from the other side of the Mississippi, really haven’t looked back, politics may be a little more left here, but also a lot more pragmatic and open minded, a big plus, perhaps we paid more in taxes, but we have also done well, we don’t look at +/- a couple $K a year as a deal breaker, quality of life, friends, inclusive attitudes, availability of open space, culture, social fabric, etc. etc.
New editors at Minnpost?
I don’t know what the deal is but others have already pointed out the methodological problems with THIS alleged study. Fact is almost everything the Center for the American Experiment does is riddled with flaws whether their talking about Voter ID, “Family” policy, education, or economics. I’ve noticed they’ve been getting a lot of space on Community Voices lately and it’s disappointing because “balance” isn’t about adding misinformation to the discourse. Basic credibility HAS to be a criteria for publication or broadcast if we’re to have productive conversations about public policy.
On the other hand . . . . . .
MinnPost can only post if they get submissions. I wonder how many other authors representing viewpoints that fall elsewhere on the continuum have been actively making submissions for publication into the “Community Voices” section?
My choice
I spend 10 months of the year traveling outside of Minnesota. I gladly pay taxes because I want a nice place to come back to.
What’s with the regular CAE “articles” here, lately? Quite frankly, if the CAE is going to be a regular section in MinnPost, it should be fact checked and put past an editor before publishing instead of being simply spewed onto the site on such a regular basis. Seriously, MinnPost, do you really need more Community Voices contributors??
Community Voices
It looks like this section is meant for opinion pieces, not sure what Paul and your rationale is for being concerned?
“Community Voices features opinion pieces from a wide variety of authors and perspectives. MinnPost welcomes submissions on current topics of broad interest in Minnesota. We suggest that they be limited to 800 words.”
I understand
what Community Voices is. I just don’t understand why CAE articles are so regularly published here if they’re not going to be their own section. If the goal is the huge number of comments generated by the horse pucky CAE affiliates include in their articles, then I guess I can see why MinnPost would love them. However, if it’s a matter of not getting anything better, then maybe MinnPost should appeal to its readers to contribute. For what it’s worth, considering the frequency that David Schultz also shows up in Community Voices, maybe he should also have his own section on economics. At least his stuff isn’t horse pucky.
Just Opinion
It’s my understanding that anyone can submit a “Community Voices” piece, and that they aren’t edited/endorsed by MinnPost. Consider the source of articles when you read them.
If you’ve read any CAE posts in the past, you should know that facts or accuracy are not part of the deal.
Often
There are many articles and comments at MP that seem to be more opinion than fact. It is interesting how some folks seem very sensitive to this one.
Of course I am always puzzled how folks can think a State can arbitrarily raise their taxes relative to other states without incurring negative consequences. It seems they believe the private businesses and citizens are trapped here.
The reality is that everything is a trade off. Raise the rates to a point and you will get more revenues… Go beyond that point and you will get less revenues… The question is where is that sweet spot where revenues are maximized.
More Often than Not
Yes, people seem very sensitive to this post. One would think that, by now, people would understand that the CAE is pretty much irrelevant and not to be taken seriously,
Reality is, I think, even more complex than you make it out. Taxes are only one reason for locating in a particular state. For example, I wouldn’t expect much new business from a law that gave tax exemptions to cotton gins in Minnesota.
I agree that there are many factors, however as companies struggle with higher costs and lower prices in an increasingly competitive world. I think that MN state taxes become a bigger factor every time they are raised relative to other states.
Personally I think most groups including CAE are relevant and their thoughts should be considered. Too often people here get so immersed in their beliefs that they forget that half of the other Americans see our country very differently from themselves.
How is one to truly evaluate reality while wearing blinders that only let them see things that they agree with?
Comments are better than the original article
I read MinnPost for a couple of reasons. The first is the thoughtful and in depth articles that often appear. The second is the thoughtful and in depth comments from readers that follow the article. I seldom read the comment section in any other newspaper as they quickly result in disparaging remarks about everyone involved, then comes name calling, and eventually it becomes just plain nonsense.
I would complement MinnPost comment writers in general. I often learn more about the topic in the comment section than I do from the original article. I like hearing from “Community Voices” as the writers actually represent the diversity of the community we live in. I also suspect that the regular MinnPost readers know well the direction a writer from the Center of the American Experiment will take.
As I read through all of these comments, my simple thought is this – I would prefer to live in the state that most of these writers do – and not live in the state with those writers who have left.
I also just heard a comment from Prince on one of the many recent video tributes being aired – he said something to the effect that he lived in Minnesota because it has a way of keeping the bad people out.