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Governor Dayton Will Regret Vetoing Tax Cuts After Seeing U.S. Growth Numbers

This morning, the Bureau of Economic Analysis announced that GDP grew by 4.1% in Q2 (April-June) this year. Disposable personal income increased by 4.5% and is on pace to grow over 5% in 2018. This is great news for all Americans, as a strong economy means more opportunities for everyone. A large factor in our strong economy is the Tax Cuts and Jobs Act, which cut taxes and simplified the tax system. Low taxes, especially low income taxes, stimulate the economy by attracting investment and increasing incentives to work and produce. While Minnesota will benefit from the national tax bill, the economic...

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In the late 1990s, Minnesota cut its top rate of income tax. What happened to income tax revenues?

Between 1998 and 2000, Minnesota's top rate of income tax was cut from 8.5% to 7.85%. The effects? In 2017 dollars, income tax revenues in the nine years before 1998, when the top rate of income tax was at least 8.5%, averaged $5.8 billion. In the nine years after 2000, when the top rate of income tax was 7.85%, they averaged $7.8 billion. As a share of state GDP, in the nine years before 1998, Minnesota’s income tax revenues had averaged 2.8% of state GDP. In the nine years after 2000, our state's income tax revenues averaged 2.7% of state GDP....

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Rep. Erik Paulsen’s bid to end Obamacare Medical Device Tax is expected to be signed into law this year

The 2.3 percent tax, which became effective in 2013, already took in $5 billion in three years, before getting suspended. The concern is that the tax will hurt small companies and suppress innovation and startups, with the attendant loss of jobs and economic growth. It is expected to be repealed by the end of 2018. DFL Senators who voted for Obamacare are in favor of repeal....

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In the 1980s, Minnesota cut its top rate of income tax by 8 percentage points. What happened to income tax revenues?

State income tax receipts were higher both in dollar terms and as a share of Minnesota's GDP when the top rate of income tax was 9% than when it was 17%. On this evidence, reducing tax rates will neither 'starve the beast', as some on the political right hope, nor lead us back to a Dickensian dark age, as some on the political left fear. ...

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Public Pools to Robotic Mowers: The Minnesota Bonding Bill

Minnesota's current bonding bill allocates $825 million, derived from the issuance of state bonds. Eventually, these bonds must be payed back with interest, making this funding scheme expensive for the taxpayer in the long run. However even knowing this, St. Paul approved some strange spending. ...

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What does the Supreme Court’s Wayfair decision mean?

Last week, the Supreme Court handed down its much anticipated decision in the case of South Dakota v. Wayfair. It might sound dull, but it will have a big impact in Minnesota. Online shopping will probably become more expensive. It could lead to a $150 million windfall for the state government. So, what is it all about? Joseph Bishop-Henchman of the Tax Foundation provides a good explanation. ...

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