Congratulations to the Center of the American Experiment for its stunning tax study.

Minnesotans on the Move to Lower Tax States 2016 by Peter J. Nelson

Wow! Was this a bombshell! Minnesota continues to lose taxpayers and for the year 2013 to 2014, Minnesota lost a net $999 million dollars AGI to other states.

Let’s repeat that. Minnesota taxpayers that paid Minnesota income tax in 2013, but left the state and took with them a net $999 million dollars of Adjusted Gross Income (AGI) for the 2014 tax year to their new state of residency. Minnesota didn’t collect sales or income taxes on most of that money. Our Minnesota charities probably took a hit, too.

How valid are these figures? Credit the IRS for tracking federal taxpayers. Once you pay federal income taxes, your movements for each filing year are compiled and that becomes a huge database where researchers can go and ply the numbers. These data are generally accepted as the best available. What happened to Minnesota in the past few years is mind-blowing and Peter Nelson lays it all out for you. We’re over-taxing and thousands of our (former) citizen taxpayers have left the state. We used to guesstimate (based on aggregate, gross AGI data) that a lot of seniors were heading out to warmer states with small or no tax bites. Now, with the new, more specific IRS data, we find that the younger age groups are leaving.

We would suggest that you obtain a print copy of the 20 page booklet from the Center and peruse it carefully. See www.AmericanExperiment.org

We at the Gopher State Politics Institute are going to examine the Nelson report from every angle possible. Our immediate study of the report leads us to a preliminary conclusion that Minnesota is in deep trouble and steps need to be taken in the current 2016 session to curb damages to our jobs economy. The 2013 Minnesota legislative session proved disastrous to our jobs and business climate. The warehouse tax was so bad on business and job creation that the next session had to repeal it. We see the 2013 Edina Tax 25% increase to 9.85% in the personal income tax as a counterpart to the warehouse tax. This increase doesn’t aim directly at business but instead nails individual taxpayers. With our already high income tax rates, this may well have been the straw to drive Minnesota taxpayers to lower tax states.

Couple the Edina tax with the estate tax gift tax three year claw-back and you have a formula for decimating wealth in Minnesota. We haven’t lost huge numbers of seniors but those that have left have taken an awful lot of taxable AGI with them. That’s money we need spent here, that will generate sales taxes and be a basis for jobs.

Our recommendation: (1) Repeal the 9.85% Edina personal income tax bracket; (2) Repeal the estate and gift tax. Both need to happen in THIS session.

Bob Smith 3rd
Gopher State Politics Institute
www.GopherStaePolitics.com