Minnesota’s Economic News — W/E 7/1/22
State and local taxes and spending CBS News: Scott Jensen seeks tax cuts to help Minnesotans cope with inflation Willmar Radio: Jensen wants to eliminate state income tax Voice of…
In George Orwell’s classic Nineteen Eighty-Four, the novel’s protagonist, Winston Smith, scrawls in his diary: “Freedom is the freedom to say that two plus two make four. If that is granted, all else follows.” This is a revolutionary act in the totalitarian dictatorship of Oceania, where truth and facts are not functions of objective reality, but of what the ruling party, Ingsoc – short for English Socialism – says they are.
I was reminded of this yesterday. An op ed of mine titled ‘Migration out of Minnesota is on the rise‘ appeared in the Star Tribune. It isn’t a particularly thrilling read I’ll admit, based, as it is, on data from the Census Bureau on net flows of domestic migration into and out of Minnesota, data from the Internal Revenue Service on the incomes and ages of people who are moving into and out of Minnesota, and, finally, a recent summary of the large and growing body of research on the effects of taxation on migration which found that “there is growing evidence that taxes can affect the geographic location of people both within and across countries.” If we want to make smart policy for our state, looking at the data is not a bad place to start.
So I was somewhat surprised to see this response from Bob Collins, formerly of MPR’s NewsCut blog:
Here is exactly what I wrote about ‘low-income’ folks:
The IRS database has just been updated with the addition of two more years of statistics on the movement of taxpayers across state lines, covering the years 2016-17 and 2017-18. Unfortunately, these new data show that the trend that existed as of 2016 continues: Minnesota gains low-income residents from other states, but loses middle- and upper-income residents, generally to lower-tax states.
In Minnesota, we often hear talk about whether our high tax rates drive away “the rich.” Unfortunately, that is only one of our problems. The IRS database shows that Minnesota was a net loser of residents in every income category from $50,000 up in 2017-18. Out-migration is very much a middle-class issue. By contrast, the state attracted a net inflow of domestic migrants with incomes of $25,000 or less. [Emphasis added]
That’s it. As you’ll see, I said nothing at all about anyone’s ethnicity because A) that isn’t in the data and B) it isn’t remotely relevant. Even so, Bob Collins broke out the Klan robes.
The trouble is that, just as Winston Smith could only see four fingers when O’Brien held four fingers up and told him there were five, when the IRS data showed me a net inflow of lower income residents I could only see a net inflow of lower income residents. If you don’t believe me, you can download the data and have a look for yourself. What was I supposed to say? Was I supposed to say that, in fact, I had seen a net outflow, just as Winston Smith eventually tells O’Brien he sees five fingers? That would be factually incorrect and a bad basis for public policy. Was I supposed not to say anything at all? A cynic may say that that is exactly the intention.
If you have a substantive criticism, I’m all ears. But if you don’t, screaming ‘racism’ is not only a poor substitute, it shows with how little seriousness you take the actual important issue of racism. For the sake of public debate, do better.
John Phelan is an economist at the Center of the American Experiment.