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Despite tax increase more 'top earners' filed in Minnesota

REUTERS

What? So they didn’t all move to South Dakota? MPR’s Tom Scheck reports, “The number of top Minnesota earners who filed 2013 tax returns was higher than initially projected, a sign that Gov. Mark Dayton's push to raise taxes on the state's wealthiest earners has not caused many to flee. … During the debate over the plan, some Republicans, warned it would chase Minnesota's top earners from the state. ‘It's been said that money talks, but money walks also,’ state Rep. Mark Uglem, R-Champlin said at the time. ‘The job creators, the big corporations, the small corporations, they will leave. It's all dollars and sense to them.’ But according to the Minnesota Department of Revenue, that has not come to pass. Revenue Commissioner Cynthia Bauerly says 6,230 more Minnesotans filed in the top income tax bracket than expected in 2013.” That’s just crazy. The next thing you’ll be telling me is that tax cuts for job creators doesn’t create jobs.

Also in money, the AP says, “Final figures from the 2014 campaign were published Tuesday. They show Democratic Gov. Mark Dayton spent about $3 million last year toward his re-election. Republican nominee Jeff Johnson clocked in at $2.4 million. Three other Republican hopefuls combined to spend about $2 million. Still, those figures pale with candidate spending in 2010's governor race, when the Democratic and Republican nominees spent $7.5 million and a third-party candidate added another $1.3 million.”

I wonder how many they nailed in Seattle? Tim Harlow at the Strib says, “The Super Bowl is one of the most celebrated events of the year, and according to the Minnesota Department of Public Safety it's also one top days for drunken driving arrests. On Sunday, as the New England Patriots beat the Seattle Seahawks in dramatic fashion, law enforcement across Minnesota arrested 65 drivers for DWI from Sunday into Monday morning. That number was a dramatic drop from the previous five years when an average of 190 drivers were stopped on the day of NFL's most-watched game.”

Today in moose. MPR’s climate change series says, “Species like moose that love cold climates are disappearing. Northeastern Minnesota has lost half its moose population in less than 10 years. Researchers don't know exactly why, but they believe climate change is likely part of the reason. The Minnesota DNR is half-way through a landmark study trying to tease out what exactly is causing the collapse.”

With vaccination back in the news, albeit mostly in anther science-avoidance political context, Tom Lyden at KMSP-TV files a piece with a local anti-vaxxer. “But Minnesota is one of 22 states that allows 'conscientious objector' parents to skip vaccinations for non-medical reasons. Christine Abel of Vaccine Awareness Minnesota says, ‘Yes, on occasion someone gets measles and dies. But you can't base your life on a few people.’ ‘You have to ask what's wrong with them,’ she continues. ‘Why did they die when most people don't die.’ "

Interesting piece from Frank Jossi at Midwest Energy News. “A recent national report places Minnesota among leading states in moving utilities toward a future with more distributed energy resources and greater consumer choices. … [Ben] Paulos spoke with Midwest Energy News about his report.

Midwest Energy News: Where does Minnesota fit in with the other states?

Paulos: Minnesota regulates utilities pretty heavily and sees energy as a state-regulated monopoly. Massachusetts and New York are competitive deregulated markets. Hawaii is fully regulated and California is a mix of both regulatory environments.

How do you see Minnesota in the mix of these states?

We included Minnesota because it is where the utilities and regulators are more proactive and more progressive than other states about the role of utilities in a landscape where customers are creating energy. It’s not like Wisconsin, where We Energies is not into change along these lines and the regulations it sought and won were a preemptive action. There’s not even a lot of solar in Wisconsin.”

What? Al Edenloff of the Forum News Service has a story on what looks like a new bullying incident. “An alleged bullying incident at Osakis High School in mid-January remains under investigation by the school district and the county attorney's office. The incident happened in an industrial technology class at the central Minnesota school near Alexandria. A photo, allegedly taken by a student and posted on Snapchat, shows another student sitting on the floor, hands bound behind his back with a hoodie tied tightly over his head.”

And good riddance. In his story on the Brian Fitch guilty verdict, Marino Eccher of the PiPress says, “The defense asked the judge to let the jury weigh lesser alternatives to the attempted murder charges: three counts of assault and one of discharging a firearm. He was convicted of those as well, though the sentence for the murder effectively renders all other penalties moot. When the verdicts were read, Fitch shook his head and rubbed his temple. One by one, the stone-faced jurors confirmed their votes. He launched into his outburst as the judge wrapped up the proceedings, calling her obscenities and railing against her rulings during the trial. She did not stop addressing the jury, keeping her voice level and calmly ordering him removed from the courtroom. ‘Take me out. I don't care,’ he said … .”

Only in … Wisconsin … or Florida. The AP says, “A Beaver Dam police officer says he's quite certain he's never responded to a call like the one he handled recently at a McDonald's restaurant. Officer Rich Dahl responded to an anonymous complaint about a woman who brought a kangaroo into McDonald's. … Dahl says when he confronted the woman she explained the kangaroo was a service animal to help her cope with emotional distress and she produced a letter from a doctor.”  I’m getting me a hippo.

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Comments (10)

Progressive taxation should not mystify us.

'MPR’s Tom Scheck reports, “The number of top Minnesota earners who filed 2013 tax returns was higher than initially projected, a sign that Gov. Mark Dayton's push to raise taxes on the state's wealthiest earners has not caused many to flee. […] Revenue Commissioner Cynthia Bauerly says 6,230 more Minnesotans filed in the top income tax bracket than expected in 2013.” That’s just crazy. The next thing you’ll be telling me is that tax cuts for job creators doesn’t create jobs.'

When a healthy understanding of economics finally replaces the pernicious propaganda of greatest ad man who ever portrayed the US President, Ronald Reagan, reports like this will no longer surprise us.

Indeed, even the Republican Party once recognized the wisdom and the justice of progressive taxation. This practice does not, in fact, cause the rich and the poor to change places. It merely brings the income classes a little closer together. It also serves to remind us that we are none of us so great that we alone created our own economic fortunes, nor so wretched that we alone created our own economic misfortunes.

Moreover, if we want to stimulate the economy, we need to put more money in the hands of people who will immediately spend it on Main Street, not in the hands of those who will invest it on Wall Street, or if possible, somewhere overseas, far from any social responsibility. Progressive taxation is the way every responsible democratic state has paid for itself since Athens, and it goes hand in hand with the commonsensical awareness that wealth comes from work, not the other way around. Therefore, we should tax wealth, reward work, and in the process improve our ability to care for human needs. In this regard, it is heartening to see that the Syriza Party is reviving this ancient tradition in its Greek homeland.

I don't see how one can draw

I don't see how one can draw any conclusion about the numbers of high earners leaving the state because of high taxes. The number of people in that category obviously went up, but that is most likely due to an improving economy. Whose to say that the actual number is much higher but that large numbers did leave?

I seriously doubt many working people left the state to avoid high taxes, but I do know many people that already have left, or intend to leave, to a more tax friendly state when they retire. Minnesota is very unfriendly to retirees and the weather is better elsewhere, too.

Tax Results

People who leave the state due to income taxes aren't cognizant of all the costs. States with no personal income tax still have to pay for government services and often that's done through fees for anything and everything under the sun. Government isn't free no matter what your tax policy is. The problem with fees is they're a disproportionate burden on people who are poor and have fixed income--namely the retired.

A wealthy person, on the other hand, doesn't mind paying a fee as it's a trivial expense to them. So your friends may be leaving for a tax-friendly state, but they may be making up the difference because the place isn't fee-friendly.

As far as weather goes, I'm right there with ya! Unless global warming kicks in here, I'll be hitting the road once retirement comes. No more slipping on icy sidewalks for this old guy!

Not cognizant of the costs?

Not cognizant of the costs? Sure they are. People put a lot and thought into researching these things when they retire and make major life moves. States like Florida and Texas have no income tax and both states freeze property taxes at age 65 which are accrued and paid later when the house is sold. For many retires, the only way to make ends meet is to move.

My next door neighbors have lived in their home for over thirty years and it's for sale because as retirees they can no longer afford the property taxes. They're moving to a smaller home in a cheap suburb. I'm close to retirement myself and it looks to me like my biggest expense will be property taxes and income tax on my IRA and SS withdrawals. Living in a state where my property taxes weren't going up, with no state income tax, and no tax on my SS benefits could make a big difference. MN, by the way is one of only seven states that tax SS benefits.

Those VERY FEW Among MInnesota's Wealthiest Citizens

who did leave as the result of our most recent tax increases,...

are precisely the kinds of people our state does not need in residence,...

as are those who believe them to be justified in their decision to depart.

Such people are a drain on our society; morally, spiritually, politically, socially, and economically.

They drag us ALL down,...

all the while projecting the suppressed awareness of that fact onto those who struggle far more than they EVER have,...

and work far harder than they ever WOULD.

May each and everyone of them find their way to a shared "Galt Gulch" where they can spend the rest of their lives arguing with each other over why NONE of them should be responsible for the expense of public safety, fire protection, street and highway maintenance, etc.

I would hope they would soon discover than you can't get the same something for nothing that they were so used to having when they lived in other places,...

when everyone around you is trying to do exactly the same thing,...

but I fear they're incapable of learning that lesson,...

which is why they made such disgruntled and irresponsible citizens when they lived here.

And that's why we really SHOULD help them...

Every time I read or hear the warnings of wealthy people leaving the state if their taxes are raised I think of a comment you made on the subject sometime last year, I think:

"Good. We'll help them pack."

I always think of that and I always laugh.

And by the way, the radio just told me that the republican response to today's "more wealthy tax filers" report is that there would have been even MORE wealthy tax filers IF their taxes had not been raised.

No doubt that kind of conservative logic is part of the New and Improved conservative political message of "Opportunity Economics" we'll all be hearing about repeatedly over the next couple years. "Economic Opportunity for All!" (especially middle and working class voters) via smaller government, lower taxes, spending cuts, and deregulation, of course.

Well, the weather IS better…

“…I do know many people that already have left, or intend to leave, to a more tax friendly state when they retire. Minnesota is very unfriendly to retirees and the weather is better elsewhere, too.”

My experience as a retiree has been quite different from what Richard Callahan suggests. I moved here, as a retiree on a fixed income, from Colorado. My property taxes are 50% higher here, and my income taxes are 3 times what they were in Colorado.

I'm not complaining – at least not much – because my standard of living in Minnesota is equal to, or perhaps slightly better than, my standard of living in Colorado. Economically, I've found Minnesota to be quite friendly, despite the higher taxes. Yes, Minnesota has higher taxes on income and property than I paid in Colorado. It also has much lower housing costs, lower food costs, lower gasoline prices, though that may change if Governor Dayton has his way, and an economy not nearly so dependent upon tourism as is Colorado's.

There are reasons for that, of course. Colorado's weather IS better – WAY better – than Minnesota's, in every season. The sun actually comes out in the winter. They have 50° days in January on a fairly regular and annual basis. Subzero temperatures do not hang around for days and weeks at a ttime. There are very few bugs because there's not much humidity (or water), and while Minnesota certainly has some scenic attraction(s), they don't come very close to matching Colorado's natural environment. If my grandchildren were in Colorado, I would never have moved here, especially at age 65, when falls on the ice become statistically significant as a cause of serious injury and hospitalization.

I'm inclined toward Todd Hintz. Government services have to be paid for in some fashion, much to the dismay of Governors Brownback in Kansas, and Walker in Wisconsin, so if the revenue stream from taxes is significantly smaller, the amount of revenue from other sources – fees, sales taxes, transaction (i.e., real estate) taxes, and assorted others – has to compensate.

The reverse of Ray's move

I recently made the reverse of Ray's move, leaving Minnesota after 21 good years for a home in Colorado. We knew that Minnesota's taxes were relatively high, but that had absolutely nothing to do with our decision. In our case, unlike Ray's, we had family in Colorado and none in Minnesota.

There is no free lunch. I could see what our taxes provided in a higher public quality of life than in lower tax places where I had lived earlier in life. I never regretted paying Minnesota taxes.

I'll admit that the weather was the second factor that influenced us. It is definitely better in Colorado, and Ray's description is on the mark. Yes, it snows, but then warmer weather is not far off and the intense sun clears what shovels and plows may have missed on the trails and walks. There is hardly a day when I don't feel comfortable walking or riding my bike without fear of slipping. I'm learning to really like Colorado. There is a lot I miss about Minnesota, but that does not include winters and mosquitos.

As long as we keep gaining people

MinnPost recently reported that while the state has in fact had more people leave the state than our surrounding neighbor states, our population continues to rise due to the number of persons immigrating here. Let's conduct a study to compare the incomes of the people leaving the state (good riddance) to the incomes of those people immigrating here (for a better life). I'm sure that the state is a net gainer in tax revenue!

Where to start with this

The headline is flat wrong, the number of hypothetical 4th tier filers decreased between 2012 and 2013. The more troubling issues is the estimate was materially incorrect, 6,230 returns more than estimated, with no explanation. What's a 10% variance between friends...four months after the last return was filed, unless it's politically expedient. Maybe the S&P 500 being up north of 30% played some factor in deviation. Maybe Brian can ask the revenue commissioner why the estimate wasn't updated?

http://www.scribd.com/mobile/doc/254513249