The Warehouse tax is going to cause all sorts of damage – and some GOP legislators want to do something about it:

Reps. Tim Kelly of Red Wing and Pat Garofalo of Farmington said lawmakers must act soon because the looming sales tax on warehousing services is already prompting businesses to delay planned warehouse expansions.

But the DFL could scarcely care less:

But a spokesman for the Democratic-Farmer-Labor governor dismissed the request as “a stunt, not a solution.

“The Legislature is coming back more than a month before this tax would take effect, which is more than enough time, if revenues permit, to review and possibly revise this tax,” Bob Hume, Dayton’s deputy chief of staff, said in a statement.

Hume is speaking like a bureaucrat and party stooge who thinks the private sector is the same of a hip club in Northeast Minneapolis.

The tax is already killing jobs!

Kelly said two large Red Wing businesses are delaying expansions because of the tax, and the prospect of losing those new jobs calls for quick action.

Stephen Lawrence, president and CEO of Lawrence Transportation Services in Red Wing, said a 6.5 percent sales tax on his company’s services would put them at a competitive disadvantage with firms in neighboring states, none of which has a warehousing tax. He said his business is considering building facilities in Wisconsin.

Governor Dayton was apparently waiting for Alida Messinger to tell Carrie Lucking what he was supposed to say about this.

Joe Doakes from Como Park emails:

USDA buys food products from eligible vendors, then gives them away to schools and eligible poor people.

The purpose of the program: “The Agricultural Marketing Service’s Commodity Procurement Staff purchase a variety of food products in support of the National School Lunch Program and other food assistance programs. These purchases also help to stabilize prices* in agricultural commodity markets by balancing supply and demand.

*Euphemism for price supports, aka subsidy to food producers.

Lots of foods are available including raisins. Raisins? We need to create an artificial shortage to support higher prices for grape growers? Yes, except one of the growers is pissed the government forces him to hand over his crop and brought a Takings claim. The case went to the Supreme Court which ruled he didn’t have to pay the fine for failing to turn over his crop before he could bring a Constitutional challenge to the law requiring him to turn over his crop or pay a fine. The government didn’t pay for raisins, they took them, to feed the poor. Barak “Raisin Robin Hood” Obama.

The whole system is insane. We buy food and store it in warehouses to make food artificially expensive and therefore more profitable to producers, but then poor people can’t afford food so we truck it around the country and give it to them for free. Stop The Madness! Don’t buy the food, let the market decide how many producers can produce food and still be profitable, let Cub and Rainbow warehouse and ship it, let prices slip so poor people can afford it. The market will take care of everything if we just get the hell out of the way!

Why is that so hard to understand?

Joe Doakes

If you leave out the forced labor (so far) and use of food as a terror weapon, the similarity to the Soviet agriculture plans of the 1930s will make you pound your head on the desk.

It was the humblest and most obscure among the DFL’s orgy of tax pushes this past session. 

And it may be the one that has the broadest impact fastest

The DFL imposed a tax on warehouse services this past session; basically, if it goes into a warehouse, you pay for it.  And pay.  And pay. 

And Minnesota businesses are not amused:

With a warehousing services tax looming next spring, Rochester businessman Eric Lawrence is rethinking the company’s expansion plans.

That means “not hiring any more people”.  Back to McDonalds, proles – and remember, it’s for A Better Minnesota!

The president and CEO of Red Wing-basedLawrence Transportation Company had been looking to build a new warehouse facility in Winona but tapped the brakes on the plan. While the warehousing tax isn’t the sole reason for delaying construction, he said it is a major factor.

“I want to grow this business. I want to offer the services and have the space to do it, but it’s not worth the risk,” he said.

With Hudson, Prescott and La Crosse just across the river and sharing the same (or better) transportation links that Red Wing has?  

The DFL-led Legislature approved extending Minnesota’s sales tax to commercial warehousing services last month. The proposal is expected to generate nearly $100 million for the state per year once it takes effect April 1, 2014.

It won’t, of course.   Ripping 6.75% plus out of the bottom line of the warehousers – which is not an especially high-margin business to begin with – makes it a no-brainer for any company.  

Senate Majority Leader Tom Bakk, DFL-Cook, said during a recent visit to Rochester that the warehouse tax enabled lawmakers to repeal a requirement cities and counties pay state sales taxes — a cost that got passed on to property taxpayers. It also helped fund an upfront refund for business capital equipment purchases.

“We thought (the warehousing tax) was a business-to-business service that wouldn’t harm economic growth, but we put it in effect in April so we could assess what potential issues that are with it because we’ve never had it before, and if there are some ramifications, there will be time to make some corrections to it,” Bakk said. “But right now, today, I don’t see it having a hindrance on economic output.”

“I don’t see it having an impact”. 

This is from the leader of a party that thinks “supply chain” is something you pay $20 extra for at Deja Vu. 

Critics disagree. They argue the tax will encourage Minnesota companies to warehouse their products in other states…Among the businesses concerned about the tax is Red Wing Shoes. The company declined to provide comment for this article. But in an interview with the Star Tribune’s Neal St. Anthony, Red Wing Shoes President Dave Murphy said the company has decided to delay plans for a new $20 million distribution center in Red Wing as a result of the tax.

I know of one major company in Greater Minnesota with a very large warehouse component that has been quietly renting up all the warehouses it can find in a neighboring lower-tax state (with better transportation connections and easier building permitting to boot); if that company leaves, it will gut the job market in its neighborhood.

It’s not just the warehouse tax that’s got them shopping.  But every little bit hurts, when you’re trying to be competitive with surrounding states thatjust plain get it – they understand competition, having spent the past forty years competing with their fat ‘n happy neighbor at the top of the Mississippi River. 

So when your warehouse gig moves off to Superior or Grand Forks or La Crosse, just remember – it’s For A Better Minnesota!

Desperate to keep the stadium finance “plan”…er, afloat, the state is making another big push to try to sell “E-Pulltabs”:

In Duluth on Tuesday night, about 35 charities and bar owners showed up for a chance to test-drive all the electronic pulltab and bingo games now available in Minnesota. They got tips from charitable gambling leaders and bars along the North Shore who use them. They received the latest data from state officials on Minnesota’s most popular e-gambling counties, the effect on charity collections and more.

“I’ve seen the machines before, but I’ve never tried them,” said Duluth bar owner Mike Ronning, checking out the electronic pulltabs. “It’s fun. I just don’t know if it’s right for my place.”

The upshot:  people are still keeping them at arms length.

One wonders if we might have saved a whole lot of trouble doing thisbeforethey made them the key revenue-generator in the state’s Viking stadium jamdown.

 When the DFL-controlled legislature started jacking up taxes, we tried to warn ’em.  “North Dakota’s gonna eat Northwest Minnesota’s lunch”. 

But did they listen?

Pffft.  They know what “A Better Minnesota” means, peasant!

Oh, the left trotted out its talking heads.  “It’s really fairly marginal”, said the heads, snug in their academic offices in the Twin Cities.

One of the Marginal Ones up in Moorhead has had enough:

When service station owner Brady Olson decided politicians weren’t listening to him, he took to the airwaves to protest higher taxes that he said were cutting into his profits.

 

“Hi, I’m Brady from Brady’s Service,” he said in a 30-second radio spot. “Minnesota has quietly been turning my business in to a tax collection business.”…Olson and other business owners in northwest Minnesota say those higher taxes make it difficult for them to compete with businesses in North Dakota, where the booming economy has allowed legislators to cut taxes.

To a talking head in the Twin Cities – who, likely, has never run a business or made a payroll – it’s just nickels here, dimes there. 

But nickels and dimes add up:

 With Minnesota legislators recently deciding to increase cigarette taxes by $1.60 a pack, Olson said, “Now they’re in the well again.”

 

Olson was particularly critical of the higher cigarette tax, which on July 1 will be $2.83 a pack. North Dakota’s cigarette tax is 44 cents a pack.

 

As a result, Olson expects to lose a few customers. He said people who buy cigarettes in Fargo will likely buy gas there.

And the bottom line?: 

Olson said every tax increase makes it tougher for his family-owned business to compete with convenience stores a mile or two away in Fargo. He pointed to gasoline as a key example of taxes that make his profit margin smaller than that of a North Dakota business.

I did mention the academics, didn’t I? 

As Minnesota lawmakers struggle to pay for essential services while allowing companies to remain competitive with those in nearby low-tax states, a big question is whether such tax disparities can kill a business.

 

There’s not much evidence to support that, said David Flynn, an economist at the University of North Dakota.

 

“When it makes a difference, they move or they change their business tactic,” said Flynn, who has studied the border business climate. “When it doesn’t make a difference they complain, but we don’t see a noticeable change, a business shuttering the windows or anything of that sort.”

 

Flynn said taxes are generally not the key factor in where business locates. As an example, he cited Minnesota’s lack of a sales tax on clothing. Although North Dakota taxes clothing purchases, there are more clothing stores on the North Dakota side of the border.

And there’s the point that everyone (on the left) misses, always.

There’s more of everything on the North Dakota side.  Moorhead, Breckenridge and East Grand Forks are pale, wan little bedroom towns across the river from Fargo, Wahpeton and Grand Forks (respectively) that are booming, and have always far outstripped their Minnesota neighbors in employment, in business growth, in everything. 

In short, the point isn’t that the border doesn’t reflect the disparities today over taxes discussed last month; it reflects decades of different approaches to taxes and regulation, which the current session will exacerbate.

Read the whole thing – it’s from MPR’s Moorhead correspondent, and it does a decent job of stringing together the story, including the non-sequiturs from the apologists for the Minnesota system.

One of the DFL and media’s (ptr) hoariest chanting points is the idea that “Republicans raised property taxes!”, and that the DFL – due to its tender regard for the middle class – is hotly engaged in cutting them.

This is a classic low-information voter play, of course; the state doesn’t set property taxes.  City and county governments do.

All the state does is send money, in the form of Local Government Aid (LGA) and Market Value Homestead Credit (MVHC) to cities and counties to subsidize their activities…

…and then, theoretically, those lower levels of government use that money to lower their citizens; since they’re getting money from the state in the form of tax dollars redistributed from the rest of the state, they can tax their own citizens less.

Right?

Well, no.  Usually not.  If you’ve read this blog, you already know more than most Democrat voters; that when LGA was “cut” over the past decade, cities and counties raised vastly more in tax hikes than they’d actually gotten from LGA in the first place.  Such is the addiction of government at all levels to spending.

And now that the DFL has cranked open the spigot again, what’s going to happen?

A PiPress editorial last week notes that “government will cut property taxes about the time I’m caught by paparazzi leaving a Los Angeles club with Amy Adams” is the proper answer to that.  I’ll add emphasis:

A Pioneer Press report this week on 31 metro suburbs cheering the restoration of funding they receive from the state included this note of caution: “There’s no guarantee cities won’t spend all the new state money on services, salaries or public works projects.”

Reporter Bill Salisbury cited findings in a 1990 analysis by the Office of Legislative Auditor that “state aid may boost city spending more than it provides local property tax relief.”

It said cities had used 82 percent of their additional aid to pay for increased spending and only 18 percent to reduce property taxes. Citizens should be prepared to hold their local lawmakers accountable.

But the DFL – and, for the most part, the media – have done their best to diffuse this accountability, to couch this “aid” in terms of “Free money borne down from the sky by unicorns”, rather than money taken from the parts of this state that work – the Twin Cities exurbs and some prosperous outstate communities – and redistributed to smaller towns with lower tax bases (the original intent of LGA) and the Twin Cities and Duluth (which was not, but which became the primary focus of LGA over the past 20 years).

But the editorial is right.  The DFL spent most of the past decade trying to make the case that hiking LGA was a matter of cutting property taxes.

It’s not, and has never been.  It’s been a money transfer, mostly from the parts of the state that are run responsibly, mostly to the parts of the state that are not.  And the smart people already know that this new money is going to overwhelmingly pay for new spending, especially new union-dues-paying government labor.

And as this last election cycle showed us, it’s not enough just to win the smart people.

Joe Doakes from Como Park emails:

Student loan fraud has nearly doubled since 2009. Something about 2009 sounds familiar. What happened in 2009?

Oh yeah, that was the last year private lenders made student loans. After 2009, the federal government took it over as part of Obamacare, so the interest paid by students would offset health care costs for poor people.

Either this is a government-run program that’s twice as corrupt as a private-run program, or half as competent. Who could have seen that coming?

joe doakes

Who could have seen it coming?

Less than 47% of the people, unfortunately.

Dems must smell their own blood in the water for next year; they’re frantically trying to attack the notion that tax cuts help create jobs…

…in the minds of those who don’t check the facts.

This one’s been popping up on Twitter lately:

State-Level Tax Cuts Don’t Boost Job Growth Study Says bit.ly/X1m24L #wiunion #wiright #p2b #inunion #nhpolitics #stribpol #topprog

— America United (@Progress2day) May 31, 2013

So I looked at the link.  It’s from “Think” Progress, which is always a good sign that you’re about to descend into the fever swamp.

And it says…:

The five states that implemented deep tax cuts during the 1990s experienced slower job growth over the next economic cycle than states that did not, and none of those states experienced income growth that exceeded inflation, CBPP found:

And what states were those?

The post doesn’t mention ’em.  You have to look at the fine print on the handy graph they included:

Colorado, Connecticut, Delaware, Massachusetts and New York?

Five states that were pretty much boom economies throughout the 2000s before the crash (perhaps because of the tax cuts in the 90s)?   States that in most cases had very little room for job growth – before the crash (at which point the “study” conks out), anyway?

This is sort of like the Dems’ slur against Romney – the Massachusetts economy grew slower when he was Governor (because it was already pretty much steaming along at full bore)!

Distrust, but verify.  Then, almost invariably, distrust some more.

Let’s say, hypothetically, that you live in a city.

And in that city there are 19 big companies.   They have everything that makes up a big enterprise – a CEO, executives, management, stores, labs, manufacturing plants – in your city.

And then the economy picks up.  And the 19 big companies hire more people, because a good economy means good sales, which means you gotta develop, build and sell all of those 19 sets of products!

So what’s the measure of the good economy?  “19”?  The number of big companies in your town?

We’ll come back to that.

Then, driven by high wages and the need to be competitive, the 19 companies outsource their manufacturing to the Philippines.  All the people in your town that earned a living from building things for those 19 companies are out of work.

How’s the economy measure?  Still a “19?”

And then the price of R and D rises, and the companies relocated their R&D labs to India and Singapore and Slovenia.  All your researchers are out of work.

Is your city still a “19?”

And then the economy tanks.  Stores scale back and lay people off, managers get RIFFed, the work force plunges.  Your town’s unemployment lines are getting longer and longer…

…but there are still 19 CEOs and corporate boards in town.  They administer companies that do their R&D and manufacturing elsewhere, and sell to whomever can afford the products through stores that are ever dingier and more understaffed.

But those 19 CEOs are still in your town.  So the town’s economy is healthy.  Right?

If you said “what, are you kidding?”, you might be a conservative.

If you didn’t, you probably think this piece by Dave Mindeman at MnpAct makes perfect sense.

North Dakota and Wisconsin taunt our borders with new signs that say – Our State Is OPEN For Business!

Everybody seems to be overlooking the basics here.

Sure taxes have some effect on business decisions….so do a lot of other things. Let’s look how Minnesota compares.

Now, let me make sure I reiterate; Mindeman is one of that tiny minority of Twin Cities leftybloggers that don’t need to be under police surveillance.

But when he says “let’s look how Minnesota compares”, what he really means is “let’s cherry-pick some non-sequiturs as absurd as the fictional list of company CEOs in my example above”.

No, literally:

The Facts: Minnesota has 19 Fortune 500 companies. Five are in the top 100. Fourteen in the top 300. United Health ranks the highest at #22. Minnesota ranks 17th in the nation for total GDP. We rank #14 in GDP per capita. Our current unemployment rate is 5.3%. Our high school graduation rate is 91.6% (National average is 85.4%) Persons with at least a Bachelor’s Degree – 31.8% (National Average – 28.2%) Median Housing Value – $201,400 (National Average – $186,200)

Let’s leave aside for a moment the factors that have nothing to do with measuring economic health (graduation rates are nice, and might – maybe – predict the future, economically.  Or they might not.  But if 100% of your town has masters degrees, but they’re all in Women’s Studies so the unemployment rate is 100%, what’s the real (hypothetical) measurement?);

We’ve got 19 Fortune 500 companies.  Bully.

Now – are those companies creating jobs in Minnesota?   Is 3M building new plants in Minnesota?   In fact, they literally exported one plant, with hundreds of jobs that used to be on the East Side of Saint Paul, to South Carolina.  And do you remember when they used to do R&D in the Twin Cities?  Welcome to Austin!

Medtronic?  Aren’t they contracting?  Well, here they are.  In Tennessee?  Not so much.

Boston Scientific?  Well, they’re not expanding anywhere – but it’s here in MN that they’re contracting fastest.

When was the last time Ecolab built a plant in Minnesota?  (Trick question; it was the seventies).

It’s not just big Fortune 500s, of course; Red Wing Shoes is eyeing a move.  Jostens is shifting jobs from Owatonna to Texas, the first of what will likely be many moves to lower-tax states.  We talked about the iron mill that’ll be built in North Dakota rather than the Range last week.

But we have 19 headquarters here.  Right?

Well, doy.  Of course we do.  If you’re a Fortune 500 CEO, where would you rather live – around Lake Minnetonka, the Guthrie, the Ordway, with Cathedral Hill restaurants and Galleria shoppping, or up in some holler in Mississippi, sweating through your underwear? It’s a no-brainer.  And that creates jobs – for management, for MBAs and upper management, sure – and their administrators and financial planners, and bartenders and caddies and nannies and gardeners, too.

But where are you going to build the plant, and create the jobs, especially for the people who aren’t management?  Who  don’t have the MBA and the BMW and the career spent networking among the corporate elite and the decades of experience in a field?

You did see the paragraph about all the “Minnesota” companies building plants elsewhere, right?

Mindeman:

So, how do we compare with our neighbors?

Vs. North Dakota: Sure North Dakota has a very low unemployment rate. A big surplus. And most of all an oil boom. But North Dakota doesn’t have a single company in the state on the Fortune 500 list.  Not one single business.

Remember that next time you run into an unemployed Ford Plant worker; “hey, you’ve got no job, but at least we’ve got lots of headquarters here!”.

Of course Minnesota has the Fortune 500s.  Minnesota benefitted from what mattered to people, and companies, when population patterns were largely set, back in the 1800s and early 1900s;  proximity to resources, plus water, rail and eventually road communication, which led to an urban center; this center became the center the upper-midwest region, the part of the country west of Chicago and north of Omaha and Saint Louis and east of Denver.   The era when the big Fortune 500s we currently have were largely formed.  An  era that, according to some thinkers on the subject, is on its tail end, and will be over someday soon.

In total GDP, North Dakota ranks 50th out of 51 US economies – and although they do better in per capita rank (20th); of what value is a low GDP with a total population that would fit into Hennepin County?

Leaving aside that Mindeman brushes aside an amazing statistical anomaly – a state that was poor, with a low, agriculture-related GDP fifteen years ago, that is now batting thirty spaces above its weight, in league with the big, inflation-adjusted coastal economies – like it’s no big thing, he gets the real question backwards.

What could Hennepin County – whose unemployment and crime lead the state, whose schools are among the worst in the state, whose achievement gap is a state disgrace, and whose major city is rapidly fulfilling Joel Kotkin’s predictions of the obsolescence of the big central city – do if they used their resources, their inherent dynamism and their talents as wisely as North Dakota has?

North Dakota may be having an economic “boom”, [Why the scare quotes, Dave?  It’s a boom.  No bones about it!] but why would any business consider a major move to a state that has a total market of about 800,000 people and a GDP that is about 1/8 of Minnesota’s? Really?

So many problems with that statement.  So many confirmations that DFLers just don’t get economics.  Where to start?

Mindeman is reliably imprecise when has asks “why would any business” move to North Dakota.

Any business?

Best Buy?  3M?  Starkey Hearing?  They’re not going to move to North Dakota.  What’d be the point?

You want to start a trucking company?  You’ll be making money hand over fist.  A machine shop in Minot?  You’ll be working three shifts seven days a week the moment you open your doors.  A house-cleaning service?  Accounting firm?  Security company?  Contract law firm?  Gas station?  Hotel?  You’ll have more business than you can handle.

Mindeman runs through all the neighboring states – focusing especially on the relative dearth of Fortune 500s in Iowa and the Dakotas – and asks:

Again, is that the type of market that can attract major business?

Why the obsession with “major” businesses?

The “Fortune 500” is an arbitrary set of companies (or was – it hasn’t actually been published in ten years), set by the editorial staff of a magazine.  It focuses, by definition, on the 500 biggest companies, in terms of sales, profits, assets, market value, and employees.

Not growth.  Not innovation.  Just sheer size.

Are these companies the major sources of American economic dynamism?  Of innovation, strength, or even new hiring?  No.  They are not.  Small business is.

Sure there are plenty of people moving out of Minnesota and heading south, but that has been a weather trend that has been going on for decades. Our population is holding better than any of the states that border us.

Another factoid that Mindeman sails past like a mile marker on 94 headed west for good.

Why have people been leaving for decades?  Why is Minnesota on the cusp of losing a Congressional seat?

If you think it’s the weather – the Dakotas are growing.

Let’s put the question this way; if you’re a financial researcher with an MBA, your best shot at a job is in one of the big metro areas, with a big company.  Ditto if you work in political non-profits – you go where the politics are.  Big cities.

But if you’re a person with a high school education, maybe with a child to support and some bills to pay, which state would you rather be in right now – North Dakota or Minnesota?

Republican talking points are only so much hot air.

Minnesota’s quality of life is thriving and we are the Midwest model for business.

That’s what the facts say.

And maybe in a future post Mindeman will explain exactly why, in terms other than “CEOs per acre”.

Maybe.

Joe Doakes from Como Park emails:

In response to the legislature’s anticipated 600% tax increase on beer, I’m starting an express delivery service running between Hudson, Wisconsin and St. Paul. Please post this Want Ad on Shot In The Dark:

“Wanted, young, daring fellows, must be over 18 and expert driver, willing to risk death daily. Orphans preferred.”

Joe Doakes

Como Park

Might just solve that teenage unemployment problem.

The Star Tribune Editorial board, in a piece that reads like Lori Sturdevant, holds forth on the DFL budget proposal, such as it is – and illustrates the Strib’s deep institutional hypocrisy along the way.

The editorial is stupid, hypocritical, and awash in institutional self-interest disguised – like all of Sturdevant’s work – as populist dooo-goodism:

No sales tax on clothing or haircuts. No alcohol tax hike. No income tax increase for 98 percent of filers. On Sunday, after four months of launching a flotilla of tax ideas, the Legislature’s DFL majorities and Gov. Mark Dayton unveiled a final 2014-15 state budget outline that, on the revenue side of the ledger, is more notable for its omissions than its contents.

Well, no.  It’s notable for about two billion of its contents.  Nowhere in the Strib’s editorial does the number “$38,000,000,000” occur.

The Strib doesn’t want to give its few readers who actually follow numbers a nasty sticker shock.

There’s plenty to like on the spending side of their balance sheet. The DFL plan pumps an additional $725 million into public education from preschool through graduate school. That’s enough to reverse the deep higher-education cuts of the past two years; ease the squeeze that has some of the state’s public schools operating only four days a week; pay for all-day kindergarten, and offer preschool scholarships to low-income families.

Read:  It’s a big kickback to Education Minnesota; they paid good money for that Governor and Legislature, it’s time for them to get their piece of the action.  

The plan also includes measures to close a nagging $627 million budget gap, the residue not only of the Great Recession but also of a dozen years of legislative failure to balance the budget in a lasting way.

Further proof that  Lori Sturdevant wrote this.  Remember 2010?

A Six Billion Dollar Deficit?  

The Strib editorial board is rewriting history for the benefit of the smug and the stupid.

But remember – they have their own self-interest at heart:

But the plan’s tax features are a disappointment. They raise revenue in a way that puts Minnesota’s economic competitiveness at risk.

Particularly worrisome is a new marginal tax bracket that will apply to the state’s top 2 percent of incomes. The rate attached to that bracket remains to be set by a House-Senate conference committee, but it is almost certain to be among the nation’s highest, especially after an anticipated temporary surcharge for top earners “blinks on” to get state aid payments to schools back to their normal schedule…While that decision is true to Dayton’s 2010 campaign promises, it comes at an economic price. Making Minnesota an income tax outlier among the states won’t be helpful in attracting and sustaining private-sector investment.

Especially the next round of investors the Strib will need to stave off bankruptcy.

Right?

It gets worse:

In addition, like a bad penny, a bad tax policy idea that disappeared two months ago turned up again Sunday. Applying the state sales tax to some currently untaxed business-to-business purchases will be part of the plan, Senate Majority Leader Tom Bakk announced. He was not specific about which items or services would become taxable, nor about how the revenue thus raised would be used, other than for “significant economic development.”

Oh, well, then.  Good enough for me!

The Strib is worried that taxing business to business purchases – which could include advertising, as well as pretty much anything in the supply chain – is going to hit their bottom line.  It’s a legitimate worry; businesses of all size, from the Strib all the way down to lil’ ol’ me, are going to see some arbitrary percentage come out of our revenues; we can pass it along and hope that our goods and services continue to get purchased, or we can eat a percentage – 5.5%?  6%? – lopped out of our revenues and try to ride it out.

Or move.

Regardless of how the money would be used, taxing business inputs is not sound policy. It layers hidden taxes into the cost of goods and services and takes a toll on wages and job creation in the affected industries. Those costs will affect low- and middle-class Minnesotans as surely as a clothing sales tax would. But the spurned clothing tax would have had the virtue of transparency, and could have been offset for low-income earners by a refundable tax credit, as the Senate tax bill provided.

Waaaah.

In for a bad penny, in for a poo-streaked pound, Strib.  This is the government that you wanted.  You did whatever it took to get this government; you served as an adjunct PR firm for the DFL, you covered up their transgressions, you whinged about “ALEC” while laughing over cocktails with “Alliance for a Better Minnesota”, you did whatever it took to get them into power, and you do your best to cover up the train wreck that is Mark Dayton.

To be sure, businesses will benefit from some of the property tax relief measures that total a hefty $400 million over two years in the DFL plan. But low- and middle-income homeowners and renters ought to be favored as the tax conference committee allocates that sizable sum.

This is Minnesota’s source of information.  Good lord.

Where does the Strib think that “relief” comes from?

It’s money that’s redistributed from the parts of the state whose votes the DFL doesn’t need, to the parts whose votes they need to protect.

Who do you suppose that is, Strib?

Republicans have offered no alternative budget plan this session, evidently preferring to stand aside and criticize DFL decisions.

Further proof it’s Sturdevant.

The DFL offered no alternative budget in 2011.  The Strib editorial board had not a word to say about it.

They should know that if they scuttle a bonding bill, they will deserve to be seen by this session’s critics as part of the problem.

And the Strib will do its’ level best to make sure they do.

I can not wait for the Strib to go bankrupt again.

The new Vikings stadium has been unveiled.

About a year after $500 million in public money was approved by the Minnesota Legislature for a new Vikings stadium, the curtain was pulled back Monday, May 13, to let the public see what the $975 million facility will look like.

The new design was unveiled at a 90-minute event Monday evening at the Guthrie Theater in Minneapolis.

The building will be asymmetrical and multisided. The roof will slope to ensure snow doesn’t pile up atop it.

It looks like a microwave that fell out of a truck on the freeway.

But at least it’s being paid for by electronic pull tabs oops.  It’s going to be paid for out of your taxes.

The least the Strib, WCCO, KFAN and KSTP could do is give away some free tickets, since this is our “present” to them and their long-term viability.

In Scandinavian society – including the parts of it that transplanted themselves to Minnesota, the Dakotas and the U.P. – there’s an aggressive modesty about people; they don’t talk much about their accomplishments; they don’t set themselves out from the crowd much; they take some pains to conceal any gains they’ve had.

Scandinavian writers christened this idea Janteloven – “Jante’s Law“.  There are really ten parts to Janteloven:

1. Don’t think that you are special.
2. Don’t think that you are of the same standing as us.
3. Don’t think that you are smarter than us.
4. Don’t fancy yourself as being better than us.
5. Don’t think that you know more than us.
6. Don’t think that you are more important than us.
7. Don’t think that you are good at anything.
8. Don’t laugh at us.
9. Don’t think that anyone cares about you.
10. Don’t think that you can teach us anything.

It’s really 1 through 4 that you seem in small scandinavian towns around the region.  When I was a kid, people that you just knew had made it big – the town’s dentist, real estate agent, whatever – took great pains to live in modest houses and drive the same kinds of cars as everyone else.  The ones that didn’t – like one of the car dealers, as memory serves?  Well, there was gossip.

Which is why Garrison Keillor’s description of Lake Wobegon – a place where all the men are strong, the women are good looking, and the children are above average – is so subtly hilarious.  Of course all of them are strong, good looking and blow the curve up – because to single anyone out, or God forbid for anyone to do it themselves, would unleash a torrent of passive-aggressive retribution.  It’s easier just to say everyone is the same.

The side effect, of course, is that all “pride” gets displaced to the community.

Kim Crockett of the Center of the American Experiment (which I traditionally abbreviate as “CAX”, but Kim reminds me they prefer “CAE”, which I think is a huge mistake, but whatever) writes (and I’ll add emphasis):

Though we find it more than counterintuitive, there is a serious conversation out there that taxes and regulations do not matter — or that Minnesota does not spend enough on education and health care. I call it the “Lake Wobegon” argument; we are so special that people will keep paying more just to be here.

I’m not sure if anyone at the DFL, with all its Chicago-y ways, ever sat down and said “let’s exploit this state’s dominant culture’s passive-aggressive communitarianism to basically browbeat and shame people into thinking “the community” is always worth whatever it demands”…

…but if they didn’t, I’m not sure what’d be different if they had.

Kim echoes something I say myself:

I think there is something to that—that Minnesota is a special place and that we have more to offer than the average state but we’ve stretched that argument past the breaking point.

I like Minnesota.  Two of my grandparents were born here (Park Rapids and Middle River).  I’ve lived more than half my life here.  Saint Paul is a wonderful place, in a lot of ways.

But…

We demonstrated that the state spends much more on K-12 education, health care and higher education than its peer states in our report “Minnesota Spending 101: Smart Budgeting for an Era of Limits” . This will be accelerated, of course, as we feel the full effects of an Obamacare exchange and expanded Medicare spending—not to mention the massive tax hikes and spending increases headed for the governor’s desk.

…the state is acting like an alcoholic relative; demanding that you cave in to its demands or maybe you never really loved it at all.

And yes, I know, I’m switching pathologies, from peer pressure to addiction.

But they both apply, really; the DFL is like a pushy alcoholic brother in law from Joliet who pushes your scandihoovian buttons to get you to cave in.

“Don’t you love our schools anymore?  Or are you more important than the kids are?”

“It’s a beautiful state.  Do you think your retirement is worth more than our state parks?”

“We’ve always been progressive, bitch.  Don’t get uppity”.

Addiction? Janteloven?  It gets hard to keep abusive codependent pathologies straight, after a while.

A groundbreaking new report by the Center of the American Experiment (henceforth CAX) shows what a lot of us are seeing in our own lives, social circles and workplaces: Minnesota sucks, and people are leaving.

Courtesy of the Center of the American Experiment

Says the CAX:

There’s no question that Minnesota’s tax policies directly impact economic growth and opportunity in the state. There is, however, great debate over whether Minnesota’s current tax policy and the proposals being considered in St. Paul promote or harm economic growth. Those who favor a higher tax rate argue Minnesota needs more revenue to fund the education and infrastructure necessary to sustain economic growth. Advocates for lower taxes argue Minnesota needs low rates to make Minnesota an attractive place to invest, work and grow a business.

Like most economic questions, making the direct connection between state tax policy and economic growth is difficult. As William McBride—chief economist at the Tax Foundation—admits, “the economy is sufficiently complex that virtually any theory can find some support in the data.”

And there will, no doubt, be controversy about this report (which you should read). But it’s conclusion (of sorts, with emphasis added):

Though data can deliver mixed messages, data from the Internal Revenue Service (IRS) point to one clear and worrisome fact: Minnesotans and their wealth are moving to Southern and Western states. Between 1995 and 2010, an average of $340 million in income—based on 2010 dollars—moved each year from Minnesota to other states—a movement totaling more than $5 billion over 15 years. The states that on net receive the most Minnesota income tend to be low tax states such as Arizona, Colorado, Florida, Georgia, Nevada, South Dakota, Texas, and Washington.

“But wait!”, someone might interject. “Of course people leave. They retire to someplace warmer!”

But there are five – count ’em, five (5) – reasons this doesn’t seem to be the case.

Working Stiffs: For starters – would retirees move to Sioux Falls?

First, many of the leading destination cities are economic centers, not retirement centers. Retirees certainly account for a large portion of the people and income leaving Minnesota. Some of the places receiving the largest portion of people and income from Minnesota include retirement destinations like Naples, Fort Meyers, and Scottsdale. But there are a large number of economic centers in the South and the West that are clearly attracting many more workers than retirees. Cities like Atlanta, Seattle, Dallas, Austin, Sioux Falls, and Denver have all gained substantial numbers of people and income from Minnesota…if Florida and Arizona were removed from the list, the income from receiving states would still far outweigh the contributing states.

Working people have joined the retirees, in other words.

You Have To Retire To Be A Retiree: The Great Recession slowed retirement migration nationwide, as people either couldn’t afford to retire, or couldn’t afford to move anywhere warm:

Second, as migration and retirement slowed during the Great Recession, Minnesota continued to lose substantial income to low-tax states in the South and the West that are not the locus of retirement.

The net movement of income to Florida dropped from $149 million in 2008 to $77 million in 2009, the first time Minnesota lost less than $100 million to Florida since 1996. The movement of income to Arizona also dropped substantially. Despite these drops, most of the other top states receiving income from Minnesota showed either no change or a bump in the income received from Minnesota.

Both Texas and Georgia gained more income inboth 2009 and 2010, while states like Colorado, Washington, South Dakota and North Carolina remained in a normal range.

All The Cool Working Kids In Liberal Hellholes Are Doing It: Minnesota isn’t the only high-tax “progressive” cesspool experiencing this problem:

analyses of the movement of income to and from other states show similar patterns of movement from high tax states and to low tax states.

In his book How Money Walks, after analyzing the same IRS data set for the entire country, Travis Brown concludes: “When you look at the mapped data over this period of time an unmistakable pattern emerges: income moved from high-tax states to states with no personal income taxes or lower per capita taxes.”11 In addition, a recent Manhattan Institute report documents the “exodus” from California

http://www.shotinthedark.info/wp/wp-admin/media-upload.php?post_id=36025&TB_iframe=1&width=640&height=607 using the data.12 The authors found, “as a general rule, Californians have tended to flee high taxes for low ones.” Thus, California, a state with a similar tax climate to Minnesota but very different weather, is experiencing similar migration patterns.

Big question there: is Minnesota becoming a cold California, or is Cali becoming a cold Minnesota?

It’s Everywhere: It’s on page 11 of the report (I said go read it, dammit), but I’ll show it to you here:

Courtesy the Center of the American Experiment.

Look at all of your high-tax “progressive” cesspools – New England, New York, Jersey, California? Warm, cold, old and stodgy or young and full of “creative class” hypstrz – they’re all hemorraging people.

It’s The Young Workers, Stupid: The fifth conclusion? Younger workers in their prime earning years are not moving to Minnesota:

The people considering a move tend to be younger and looking for better jobs and economic opportunities. Table 1 [on page 3 of the report]shows a steady decline in the average size of the households moving to Minnesota, dropping from households with 1.94 exemptions per return in 1996 to 1.75 in 2010. This drop suggests that fewer families are choosing to make Minnesota their home.

We’re getting an influx of college students and lonely drifters. Families in their peak earning years? Not so much.

The conclusion? The CAX puts it diplomatically:

The data reviewed in this report show first and foremost that Minnesota is consistently losing the battle to attract people and income to the state. Year after year the state on net loses thousands of people and undreds of millions of dollars. Regardless of how large the loss is, it is a loss which demonstrates Minnesota is not competing well with the rest of the country. That’s a fact that should be worrisome to every Minnesotan.

I don’t need to be diplomatic; the data show us that tough economies and high taxes didn’t even mix in the 2000s, when we had a government that was split between bobbleheaded spendthrift DFLers and responsible Republicans, and we held onto sanity by our fingernails.

Today? Anecdotally?

I can’t tell you the number of middle-class, hard-working, tax-paying people I know who’ve told me to pencil them in for anything happening more than 6-12 months out; they’re looking to move someplace where they aren’t forced to be happy to pay their hard-earned income for a Minnesota that just gets worse and worse.

No news here; the Sequester, like every “school layoff” in every city that isn’t Detroit, is basically the same as everyone’s old alcoholic significant other threatening to kill themselves; an abusive, co-dependent way of browbeating and bullying people into giving in.   The “cuts” – really a whiz-in-the-wind reduction of an increase – are designed to gull the gullible and intimidate the weak and dependent.

The FAA Controller furloughs were a great example; the furloughs will save a fraction of the FAA’s consulting budget, or travel budget, or any number of other expendables that don’t directly affect the agency’s mission.

But squeezing the flying public shows the peasants who’s boss.

Joe Doakes from Como Park emails:

Local community celebrations suffer from Obama Administration tax-hike hostage-taking: “Give us the money or the fly-boys get it.”

Note this quote: “Maj. Darrick Lee, spokesman for the Thunderbirds, said a typical season averages about $9.75 million and the Air Force needs to focus its resources now on its mission in Afghanistan.”

Seriously? We’re cutting back airshows all the sudden because we need a lousy $10 million to fight the war in Afghanistan? Dude, we spend that every hour over there and there’s no end in sight.

An entire season of Air Force goodwill (and recruitment advertising) that also directly boosts local economies costs about the same as two Obama vacations; a grant to redesign Southwest Canyon Road in Beaverton, Oregon; or the missing first payment on bankrupt car maker Fisker’s federal Green Energy subsidy loan.

I could understand cutting airshows if the federal government suddenly got Libertarian Fever and cut airshows IN ADDITION to these other boondoggles . . . but the administration shows no sign of fiscal prudence, only political punishment. Longer lines at airport security, laying off air traffic controllers, grounding military flying teams: these are directly aimed at making life miserable for ordinary taxpayers who haven’t demanded higher taxes quickly enough, so they must be punished for it.

Hostage-taking used to be a gangster tactic, now it’s Democrat standard operating procedure. That should tell us something.

Joe Doakes

Spare the rod, spoil the taxpayers.

Remember when Democrats claimed to be for the little guy and against big institutional businesses?

Obama supports the “Marketplace Fairness Act”, which would tax online purchases:

Senators advanced the bill in 74-20 procedural vote on Monday evening, just one vote short of the backing it received in a test vote last month. Twenty-six Republicans joined Democrats in moving forward with the bill.

(Or when Republicans claimed to be pro-business?)

Oh, yeah – both A-Klo and Stuart Smalley voted for the bill.

Major retailers are putting all their lobbying muscle behind the legislation, arguing it would close an unfair loophole that benefits online merchants over brick-and-mortar stores. The National Retail Federation, which represents chains such as Best Buy, Macy’s and J.C. Penney, and the Retail Industry Leaders Association (RILA), which counts Target and others among its membership, announced it would score lawmakers’ votes.

The bill would also make it possible for states to tax financial transactions – trades for your IRA, moving money around in your 401K and the like.

But signs of trouble for the bill also emerged as Wall Street groups urged the Senate to slow down and eBay began marshalling its users in a massive campaign to kill it.

The Securities Industry and Financial Markets Association and the Financial Services Roundtable said the measure could pave the way for financial transaction taxes on the state level, an idea that Wall Street and its supporters fiercely oppose.

“A transaction tax on financial services products will hurt retail investors, retired Americans, and small businesses, effectively making it more expensive for them to invest and plan for the long-term. Without hearings, these implications and others will not be properly addressed” [said Scott Talbott, senior VP of public policy at the Securities Industry and Financial Markets Association and the Financial Services Roundtable]

Democrats (and some Republicans); dragging the parts of the economy that work down into the same pit of suck that the rest of the economy is in.

It’s like Easter for Democrats.

Joe Doakes from Como Park writes:

From the March 19, 2013 Pioneer Press article on Democrats’ e-bingo gamble,

“As of late February, budget planners were forecasting about $1.8 million in tax revenue from charitable gambling in fiscal year 2013 for use on the stadium. Estimates last fall had been about $15 million higher, Massman said.”

Democrats planned to bring in $15 million to pay for the Vikings stadium, but we’re bringing in less than $2 million? What a blunder!

Who could have foreseen it?

Joe Doakes

Como Park

Oh, don’t be silly.  Blogs don’t cover news.

I got this via email today from a regular correspondent who works for a state agency; I’ll add emphasis to the key parts:

 “A friend of mine at [another state agency] told me about the hype and reality of his situation.”

“The national association to which the state agency is affiliated with has sent out a series of communications intended to raise anxiety about sequestration. The national association declares that almost 1 million vulnerable Americans will lose their health care services due to sequestration. The actual effect on my friend’s local agency is that their federal financial allocation will drop by 4%. This drop is after increases totaling almost one third more in 2013 compared to 2008. The actual amount of the sequestration cut can be absorbed by cutting the local agency’s travel budget by about 40%. The largest cuts at the national level will be to reduce the expansion of the program, not cuts to existing clients.”

Guesstimating the net effect in federal dollars on this state agency; a 4% reduction in aid that’s risen 33-odd% in four years takes the agency back to, er, August of 2012.

Once upon a time P. J. O’Rourke said that this sort of budgeting – “Baseline Budgeting”, where all increases and decreases are relative to the previous budget – allows both sides to look at a budget that reduces an increase, claim simultaneously that the budget increases spending and cuts spending, and both be telling the truth and lying.

Anyone who “survived” the 2011 “government shutdown” recognizes this sort of ofay alarmism.

Hopefully a majority of the rest of the country does, too.

If someone as dense as Maxine Waters were a Republican…:

…oh, why bother. For every example of a dumb Republican hounded from office by the Democrats’ “Praetorian Guard” media, there are several Democrats who are worse, and rule on in splendid invincible density, forever and ever, amen.

…that raising taxes in a recession isn’t face-palmingly stupid:

“In case you haven’t seen a sales report these days, February (month-to-date) sales are a total disaster,” wrote Murray in a February 12 email to executives. “The worst start to a month I have seen in my (about) 7 years with the company.”

The recent hike in payroll taxes is dragging down sales for discount retailers like Wal-Mart. With less disposable cash in their wallets, lower-income shoppers have less to spend.

The bad news comes on the heels of a lackluster January for the major retailer.

“Have you ever had one of those weeks where your best-prepared plans weren’t good enough to accomplish everything you set out to do?” wrote Walmart Vice President for U.S. Replenishment Cameron Geiger in a February 1 email to Walmart executives. “Well, we just had one of those weeks here at Walmart U.S. Where are all the customers? And where’s their money?”

If we – the “middle class” – have 5% less money between payroll taxes and Obamacare, then that’s 5% less to spend at Walmart.  Or Patagonia, or MPR’s pledge drive, or what have you.

Most of us know this.

Democrats in DC and Saint Paul, it seems, do not.

Even some DFLers – the thin film of them that actually have to manage things in the private sector – are figuring it out.

This piece has made the rounds; it’s from the San Fran Chronicle, in a piece that gurgitates a whooooole lotta Minnesota myths:

“We’re screwed,” [Printing company owner Dik] Bolger said, if the tax goes through. His 79-year-old company competes nationwide and overseas for work with major brands like Chanel. “If you’re bidding for a $100,000 job on a national basis and tax expenses push you a couple of percent higher, then I’m not competitive.”

And I’m hearing this from businesspeople – some political, some not, and mostly off the record – all over the place.

For generations, Minnesotans lived out the progressive argument that high taxes and high services were what gave the state its fabled quality of life.

One thing Minnesota Democrats never, ever get; the “Minnesota Miracle” – creating a high-tax, “high-service” system that actually prospers – depends on several factors:

• Being the uncontested biggest economy…
• …within a national economy that has no serious competition (as the USA did not, between 1945 and the mid-seventies)…
• …allowing near-unbridled prosperity…
• …which supports boundless government spending.

…to paraphrase Albert Einstein, is to keep trying to use taxes to engineer society even when you know it doesn’t work.

Last month, we talked about Governor Messinger’s Dayton’s plan to jack up cigarette taxes by a buck a pack.  Raising cigarette taxes never works; revenues plummet because people avoid the taxes the best they can, and if taxes get high enough they switch to the inevitable black market, and even the purported health benefits tend to stall once the casual smokers get priced out of the market.  And, for all the DFL’s palaver about progressivism, cigarette taxes are the most regressive tax there is.

So what could be better than Governor Messinger’s Dayton’s $.94/pack hike?

Ann Lenczewski’s proposed $2.83 per pack – up $1.60 from the current $1.23 in total state taxes – is like Messinger’s Dayton’s proposed hike, only more so.

Kim Crockett from the Center of the American Experiment, quoted in the left-leaning Daily Planet:

But the taxes are seen as regressive — meaning they affect a larger share from those least able to pay, and, according Kim Crockett, chief operating officer for the Center of the American Experiment, the goals of decreasing smoking and increasing revenue can sometimes conflict.

She cautioned against raising the price of cigarettes to the point where there are unintended consequences. She said the state could expect to see more smuggling of the product — casual smuggling by those who cross state lines to purchase the product if it is cheaper, but also commercial smuggling by large-scale operators bringing the product to the state for sale.

“This undermines both the revenue goals and the health goals of higher cigarette taxes,” she said. Additionally, she questioned the anticipated revenue projections.

The DFL are acting like spoiled teenagers who got the car taken away from them for misbehaving with it – and finally got it back, and are acting like now they’re really gonna stick it to Mom and Dad.

First things first: Charlie Quimby of “Growth and Justice” and Dave Mindeman of MnpACT are two of a small, select set of Minnesota liberal bloggers who needn’t be under police surveillance or at the very least restraining orders.  I’m just giving credit where it’s due (although the idea that a group can be named “Growth and Justice” yet still stand for neither is just a tad bemusing).

But over this past week, both of them assailed Rep. Pat Garofalo’s statement on this past week’s “TPT Almanac” program; the Lakeville Republican claimed, in what struck me as a bit of hyperbole, that the broadening of the state’s sales tax to cover clothing will “destroy” border communities like Moorhead.

Always on the lookout for hyperbole to dissect, Mindeman and Quimby were on the job pronto.

Quimby was – as is his unfortunate wont – dismissive, in a post subtitled “Do We Believe Our Lying Eyes?”

Back in 2007 when Growth & Justice was presenting its Invest for Real Prosperity tax proposals to the legislature, I recall a member waxing nostalgically about his parents hauling the family across the North Dakota border to buy untaxed clothing in Minnesota.

The point of his anecdote was that if Minnesota lowered its sales tax and broadened its tax base—as economists recommend—this lucrative cross-border school clothing traffic would dry up, with terrible consequences for Minnesota’s border city retailers.

We’re hearing a version of the same tale…This week, Rep. Pat Garofalo objected on TPT’s Almanac: At the Capitol. He reported that a North Dakota Democrat was proposing eliminating the state’s tax on clothing as a form of tax relief.

“Retail businesses in border communities like Moorhead will be destroyed,” Garofalo said, attracting blogger Dave Mindeman’s skeptical response:

Mindeman interspersed some facts with the snark (which is to his style what dismissal is to Quimby’s) in his piece, noting – correctly – that North Dakota has a 5% sales tax, onto which Grand Forks and Fargo lard 2% in city sales taxes.

Oh my God….how would Minnesota compete?…Garofalo loves that flaming rhetoric doesn’t he?

Fact: North Dakota sales tax is currently 5.0%. Fargo, ND which is the booming ND metropolis across the river from Moorhead adds a 2% city tax. So here is the facts. Under Dayton’s tax proposal, Moorhead (which adds no city tax) would be 5.5%. Fargo would charge 7.0% Clothing may be exempt in the future, but Moorhead will still have clothing under $100 exempt as well.

And like most DFLers, Mindeman, like Quimby, can’t resist taking a homer shot at the Dakotas:

But let’s suppose North Dakota finally drops its state clothing tax just when the gap with Minnesota is closing.

Then what? Will Minnesota border towns really suffer? Were North Dakota retailers in the thriving cities of Fargo and Grand Forks suffering in silence all these years?

To which Quimby assents – with, to be fair, an actual study with real numbers:

As the Minnesota legislator said in that 2007 hearing, should I believe you or my lying eyes?…Looking at the literature studying economic activity in response to sales tax rates, I found research that supports the following points:

Response to differences in the sales tax depends on proximity of border communities. In other words, the farther you have to drive to avoid the tax, the less likely you are to do so.

How much does distance matter? A 2010 Utah study of local option sales taxes PDF* that investigated distance as a variable found increasing the tax rate lowers taxable sales (all else held equal) when there is a jurisdiction with a lower tax rate within 5 km, or about three miles. The effect disappears altogether within about 40 miles. This is to be expected for low-cost goods and everyday commodities. But it also appears to hold for expensive major purchases such as new or used automobiles.

All of that may be true.

But the effects of an individual tax like the Sales Tax, and its nuts ‘n bolts comparison with other sales taxes, while potentially interesting and certainly economics-class-fodder, are the trees that help you miss the forest.

For the real comparison between the states’ tax burdens – not just sales taxes, mind you, but taxes across the board – you need to ask yourself a key question:

“What did I see last time I went to the Moorhead/Fargo area?”  Or you could fill in the “East Grand Forks / Grand Forks area”, or the “Breckenridge / Wahpeton” area, or for that matter the “Worthington/Sioux Falls” metro area?

For starters, you’d know they’re called “Fargo/Moorhead”, and “Grand Forks/East Grand Forks”, “Wahpeton/Breckenridge” and “Sioux Falls”.  Because in every case, the North/South Dakota side is where the action is.

And it’s not just force of habit; it’s not even close.  The Minnesota sides of each of these metro areas (or clusters, in the case of Wop/Breck) are sleepy, moribund and dismal out of all proportion to their North Dakota neighbors.  They’re not competitors in any meaningful way.  They are all sleepy little bedroom communities with highway exits; whatever commerce, dynamism and action is happening in the area is happening west of the Red (or the Bois de Sioux, or County 17, as the case may be).

Forty years of wide tax disparity – Minnesota has the #7 overall tax burden in the US, while North and South Dakota are 35 and 49, respectively) has left a clear choice to all of those places; move west, and keep more of what you have.  The choice was more nuanced, of course, 40 years ago – when North Dakota was a sleepy agrarian backwater.  Today, with my home state an economic dynamo in both energy and technology, things are a little clearer-cut.  And at any rate – as noted by Quimby and Mindeman – fluctuations in the sales tax, or any individual tax, are background noise to the larger effect of decades of disparity; the Dakotas have better business climates; while the western 3/4 of both states are limited by their sparse populations (which is why working on the rigs out in the Bakken pays so very very well), but Fargo, Sioux Falls and Grand Forks are all well-developed cities with young, highly-educated populations and, at least in North Dakota, K-12 schools that are as good as or better than those in Minnesota.

So once you take a step back and stop the pointillistic crabbling about this remark or that individual tax rate, you see that the real issue is the long-term effects overall tax burdens have.  As the Dakotas prosper more generally and gain more people and – as seems to be their goal – turn more of that prosperity into tax relief, that disparity is only going to get starker.

Put briefly – the reforms of the sales tax won’t destroy Moorhead, because tax policies took care of that forty years ago.  There’s really not that much to destroy.  It’d be like harming business in Saint Anthony compared to Minneapolis; who’d know?

So here’s another question:  Up until 2 years ago, Wisconsin was addled by governments more dementedly “progressive”, as a rule, than ours.  That changed in 2010, right about the time Minnesota seemed to have some hope of shucking off some more of the dross of DFL legislative control.  Now, as NPR noted last week – in a report I’ll be going over later this week – Minnesota’s economy is stronger as a whole than Wisconsin’s.  But the improvement in Wisconsin since 2008 is dramatic;it’s improving fast, bouncing back from decades of neo-socialist perfidy.  What’s going to happen in Minnesota?

What do you think?  We’re raising taxes in the middle of a recession!  What happened in California, Illinois and France?

That said – we won’t know what’s going to happen until things tamp down for a while.  Will Minnesota’s government remain the shiny toy of Alida Messinger’s band of plutocrat dabblers and union fixers?  Will Republicans retain control in Wisconsin?  If so, give it a few years.  Then we’ll check back.

As to Fargo versus Moorhead?  That train left the station decades ago.  Changing the sales tax one way or another is just bouncing the rubble, as it were.

Minnesota newspapers, largely, supported Governor Messinger Dayton and the DFL.  They largely not only bought the “Alliance For A Better Minnesota’s” bill of goods hook line and sinker, but most of them worked tirelessly to propagate it, and to squelch dissent from it.

They studiously avoided, almost completely, any reporting that would have impeded the DFL’s rise to power.

The Minnesota media, at large, were among the DFL’s most valuable players this past two electoral cycles.  At the highest levels – the Strib, the PiPress, and at least the programming arm of MPR – they serve as the DFL’s Praetorian Guard.

But now?  Now that the governor is tacking 5.5% sales taxes (for starters) onto print services, advertising and retail newspaper sales?

Not so much:

Business groups and retailers complain that the proposal would cost jobs. As he spoke to the Minnesota Newspaper Association, several editors and newspaper owners complained that a sales tax on newspapers would hurt their industry.

Tom West, the managing editor of the Morrison County Record in Little Falls, spoke about his concerns during a question and answer session.

“We are the ones who cover local government and state government, and we are wondering why you would think it would be a good idea to have less information about government and what government is up to,” West said.

(Cynical answer: “Because you’ve served your purpose”.  See also The Minnesota Independent).

(Slightly less cynical answer: “While your contributions to DFL hegemony were vital, you don’t have the same political clout as AFSCME, the SEIU or MPR).

(Cynical and partisan but realistic answer: “How about not just “covering local government”, but turnin a critical eye on the DFL?  For once?”)

Others said that expanding the sales tax to newspaper ink, paper and advertising would result in job losses. Dayton said he understood the concern but did not back away from his plan.

Job losses only matter if they’re union.

Small papers aren’t union.

Big papers are – and we’ll see what happens there.

As to the rest of you newspapers?  You got the government you mostly worked for, largely shilled for, and for the most part operated as in-the-bag PR agents for.  Most of your editorial stances praised Dayton and the DFL’s return to power.

So now you’re saying you’re not Happy To Pay For A Better Minnesota?

Suck it.

BONUS QUESTION FOR DFLers: What do you think happens when you tack 5.5% onto the price of something?

All other things being equal, people buy 5.5% less of it.

Ponder losing 5.5% of your business overnight.  Ponder hard.