Shot in the Dark

Dodging The Point

Ever since Governor Dayton passed one of the highest taxes in the nation on people earning over about $150,000 a year, conservatives have been predicting an exodus of the productive class.

DaytonDustbowl

The Minnesota left is doing cartwheels over “data” showing it’s not happened…

…sort of.  I add emphasis:

The ranks of the very rich are growing in Minnesota, despite a controversial tax increase that singles out the biggest earners to pay more.

Critics predicted that the ultra-affluent would flee after Gov. Mark Dayton secured 2013 passage of a new income tax tier of 9.85 percent on individuals who make more than $156,000 a year. But the latest data show that the number of people who filed tax returns with over $1 million in income grew by 15.3 percent in the year after the tax passed, while the new top tier of taxpayers grew by 6 percent.

So many holes in this “story”:

People making over a million a year – the “ultrarich” – can live anywhere they want;  the Twin Cities are a great place to be rich; good quality of life with lots of bigger-city amenities, and your dollar, after taxes, still goes a ways.   That’s why so many big corporations have their headquarters in the Twin Cities, even though they haven’t hired a non-service blue-collar worker in Minnesota in decades; it’s a great place to be a CEO.

As to the number of people in the >$156K tax bracket rising?  So what?  As the value of the dollar drops, and inflation creeps in, more real estate agents, dentists, software architects, insurance salespeople and the like find their incomes creeping upward from $145K to $156K.

But you have to then ask:

  • How many of them hit that $156K mark, stew on it for a year or so, and decide to move to Hudson or Fargo or Superior?
  • How many more would have reached that threshold if it weren’t for the tax hike?

The answers, by the way are “anecdotally, many” and “the Strib, being Tina Flint-Smith’s waterboys, sure aren’t going to tell us”.

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Mitch Berg

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20 responses to “Dodging The Point”

  1. Dog Gone Avatar
    Dog Gone

    Aw, come on Mitch. The reality is that taxes are not the big driver in where people live. Also not the big driver in where business locates, compared to more important factors like the quality of infrastructure and the educational level of the labor force.

    That is why states like Wisconsin or Kansas that give out tons of tax welfare to business and the rich end up having shitty economies. THAT doesn’t work.

    There is no evidence for rich people leaving. There is a lot of evidence that rich people are in fact prospering under our tax system, and that Minnesota is consistently ranked as a highly desirable place to live.

    Looking recently at a map of what each state is best at — and I share this in hopes you get a chuckle out of it, not in any mean or insulting way — NoDak land of toxic waste and oil boom gone bust was ranked as having the largest penis size. I share this as funny because there is no way that there could be a standardized method of quantifying that aspect of human beings reliably, and it was funny that someone tried.
    http://www.prweb.com/releases/biggest-penises-by-state/state-penis-size/prweb11377257.htm
    Maybe all those gun toters who are compensating for other inadequacies should move to NoDak in the hopes of sharing in the large-est.

    It would make as much sense as your defective criticism here of MN tax policy.

  2. Mitch Berg Avatar
    Mitch Berg

    DG – before I answer:

    1. Please just leave a quick “hi” to indicate you actually read the threads after you comment.

    2. Please read this post.

    Thanks.

  3. bikebubba Avatar
    bikebubba

    No evidence for high taxes leading to people leaving states? Tell that to residents of Nevada, Colorado, Arizona, Utah, and Texas, who are up to their eyeballs in Californians.

    For now, Minnesota is doing OK. Not great, but OK. But as Swiftee is quick to tell us, the new projects are by and large going to Texas and South Carolina, where the only thing lacking is Tim Horton’s. And we’re lacking in that department, too.

  4. kel Avatar
    kel

    You’re right Mitch, DG is not only using your blog as her blog away from home but her actions indicate she sincerely believes that you won’t do anything about it.
    As a means of reducing the signal to noise ratio why not give her (and us) a 90 day hiatus until after both the Democrat and Republican conventions are over.

  5. Bento Guzman Avatar
    Bento Guzman

    Check the graphic that goes with the story:
    http://www.startribune.com/millionaires-on-the-increase/378435231/
    The number of million-dollar filers has increased by 85% in Wisconsin since 2005. In Minnesota the number has only increased by 30%. This means that WI has outperformed MN in million dollar earners by 55%.
    In economics they usually add the phrase ‘all things being equal’ to any formulation or principle, e.g. ‘people will flee high tax economies, all things being equal.’
    The trick is that all things are never equal.
    It is a mistake to treat the Minnesota and Wisconsin economies as though they are the same; they aren’t. Wisconsin has more in common with Michigan than with Minnesota.

  6. justplainangry Avatar
    justplainangry

    BG, facts are for little people. We do most of our shopping online, and I tell you, we have to pay a lot of sales tax now compared to when we lived in TC since quite a few online sales stores are based in TX. I wonder why?

  7. justplainangry Avatar
    justplainangry

    Mitch, better yet, how about limiting DG’s screeds to one line? And no more than one consecutive one line post at a time.

  8. swiftee Avatar
    swiftee

    Combined, my wife and I are in Dayton’s “ultra-rich” “gimme” category. We left, and we ain’t ever coming back.

    And dg has a point. While the tax advantages were important to us, we also left because Minnesota is infested with an especially virulent strain of leftist cockroach, of which dg is a perfect example. For 4 months it’s also cold as a lesbians heart and is dark as a Kenyan traitor’s agenda; rusts cars, mentally abuses public school kids.

    So yeah, the taxes are bad, but there’s plenty of bad left to consider.

  9. Ian in Iowa Avatar
    Ian in Iowa

    “If they don’t like our tax, they have a right to do so, but they shouldn’t be coming back here for six months a year to take advantage of Minnesota state services that other Minnesota taxpayers pay for,” Dayton said.

    Not that Branstad’s all that great, but I’m glad Mark Dayton isn’t my governor. I’m trying to determine if he really believes that, or is just reading the cue cards.

    I seem to recall a sales tax increase in Hennepin County that pays/paid for a new stadium? My move to Iowa from Minnesota took time, during which I was purchasing gas, meals, etc. whenever I was up in the Cities. Those purchases were taxed, and that money went to the state, county, and municipalities.

    There were also the property taxes from my house in Brooklyn Park that funded Minnesota schools even after I established residency in Des Moines.

    Typical leftist mindset: If you’re not paying income taxes, you’re not paying taxes to support the leftists’ utopian dream.

  10. bosshoss429 Avatar
    bosshoss429

    Well, I’m sure that, like Governor Mumbles, they park their big stashes of investments, savings, etc; in South Dakota.

    Ever notice all of the over 65 set driving around with Florida plates? Talk to a couple some time and they will tell you that retirees get taxed to death here in DemonRAT controlled Uzbekisota, so they live in Florida long enough each year that they are not considered a state resident.

  11. Joe Doakes Avatar
    Joe Doakes

    Infrastructure and educational level of the workforce? That’s why Ford is moving 2,800 jobs to a new plant in Mexico? Why gun maker DPMS moved from St. Cloud to Alabama?

  12. Emery Incognito Avatar
    Emery Incognito

    There are some people who leave Minnesota for the taxes, and you’ll find those people in low tax states like South Carolina or Texas. People leave expensive states to cut costs, but taxes are only one of those costs. The problem isn’t so much that people don’t want to live in high tax states, it’s that people starting businesses don’t like to be in high tax states. So you find a disproportionate amount of the job creation happening in the low tax states. And if you want to leave wherever, your choices are pretty much restricted to where there is a job waiting for you. High tech sets up in Austin rather than Silicon Valley because the taxes and cost of living are lower. An awful lot go where it’s cheap to start a business. Low minimum wage + light regulation + low cost of living = job creation

  13. Bento Guzman Avatar
    Bento Guzman

    Kona has a lot of retired California state employees. The taxes in Kona are high, and the cost of living is high, but you can sell your suburban home in CA for a half million and buy its equivalent in Kona for maybe $400k. You are not gonna starve on a Calpers pension.

  14. swiftee Avatar
    swiftee

    ” An awful lot go where it’s cheap to start a business. Low minimum wage + light regulation + low cost of living = job creation”

    And yet Emery, you vote for Democrats, thus you are an ignorant dickhead that is responsible for the decline of America. Q.E.D.

  15. Emery Incognito Avatar
    Emery Incognito

    Oh bless your heart. You keep hanging in there.

  16. kel Avatar
    kel

    “Kona has a lot of retired California state employees.”

    My impression of the residents/non-tourists in Paia, Maui was that they were mostly refugees from Sausalito and Venice Beach who were looking for the cost structure equivalent of the late 70s combined with the political sensibilities of of current day CA. It seemed like there were a lot of dead VW Beetles that doubled as guest houses.

  17. bosshoss429 Avatar
    bosshoss429

    JD;

    You are correct about DPMS.

    The founder, Randy Luth, is a friend of mine. I remember when he started the company out of his garage under the Osseo water tower.

    When he expanded his manufacturing from machined parts to guns, he moved his operations to Becker. The city was always up in his grill with various rules and regulations that he felt, targeted businesses, so he moved to St. Cloud, where he also purchased the gun club with its shooting range and built his shop right next door. Smart move, as it allowed him to test fire protypes and finished products there.

    When he sold the company to Freedom Group, he knew that they planned to move the operations to Alabama mostly for tax related issues. Many of his employees had the opportunity to join FG and move to Alabama and were apparently offered nice packages to do so. At any rate, Randy took care of all of his employees because he knew that they would be losing their jobs. They got nice checks, based on longevity, too. He then took the rest of his money and moved to Arizona. He is still part of the DPMS competition shooting team.

  18. Bill C Avatar
    Bill C

    As yet one more singular anecdote, there is a road on the eastern part of Lake Minnetonka; Bushaway Rd (also known as MN 101). Tucked back in the trees, facing Wayzata, is an absolutely HUGE mansion http://i.imgur.com/HPHuEpI.jpg. Since MN property tax records are online and publicly available, I decided to look it up a few years ago. It was valued at something like $17M, with about $250K/yr property taxes, registered to an owner with a Florida address. I used to drive along that road about once per week and sure enough, I saw more than one car with Florida plates pulling up to the gate and going inside, in the summer. I’m sure there’s just a skeleton crew of caretakers during the winter.

  19. nerdbert Avatar
    nerdbert

    Minor point Mitch: moving to Hudson won’t help you evade the Dayton tax if your work address is still in Minnesota. I know that first hand. And yes, I’ve been tempted more than a few times to change my address to the Carolinas to get a pay raise and better weather. All bets on my staying in the frozen Nord are off after the kids get out of school.

  20. Scott Hughes Avatar
    Scott Hughes

    Bill C, It wouldn’t surprise me if the parents or children of the owner of the property on Lake Minnetonka claim residency and homestead tax credit for the property. The owner could claim residency in FL to avoid MN income taxes. I have a number of friends who do just that.

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