Economics

It would seem that Governor Dayton's relentless hunt for “the rich to pay their fair share” will cost the state of Minnesota more than it will take in by raising the tax rate.

Coolidge. The title is as spare and direct as the subject. Building on her previous book, The Forgotten Man, Amity Shlaes might have added “The Forgotten President.” Then again, perhaps she realized that Calvin Coolidge’s problem is less that he has been forgotten than that he has been “misremembered,” as the unforgettable Roger Clemens might have put it. Such “misremembering” has had its minuses and at least one plus. On the negative side, it’s contributed to the reviling and ridiculing of Mr. Coolidge. On the plus side, it’s also contributed to his having been generally underestimated.

A new Center of the American Experiment report investigates an important question: Does state tax policy motivate people to leave or avoid Minnesota? Analysis of IRS income migration data reveal clear patterns of movement from Minnesota to lower tax states,which strongly suggest that taxes make a difference in where people and their incomes are moving. The implications for proposals to raise Minnesota tax rates is clear: Higher taxes will likely lead to even more wealth moving to other states.

How many times have you heard the argument that Republicans are wrong to focus so much on the effect of high taxes on the business environment? High taxes, liberals argue, are just not that large a factor in business location decisions. Government instead should focus on providing high-quality services, an educated workforce and a high quality of life. If Minnesota is a great place to live, high tax rates are simply the price we pay for a better Minnesota.