DFLers push pointless, extreme corporate tax bill

Pointless

A helpful way to begin assessing proposed legislation is to ask two questions: What problem does this bill address? How will this bill address that problem? A good example is a bill proposed by Reps. Greenman (DFL), Gomez (DFL), Howard (DFL), and Agbaje (DFL), HF 4513, “that would make a corporation’s state tax returns available on a state website.”

What problem does this bill address? In a report, the Minnesota Reformer notes that:

A Pew Research study last year found that 60% of Americans said the feeling that corporations don’t pay their fair share “bothers them a lot.” [Emphasis added]

Citing the very same poll, an op-ed in the Minnesota Reformer — unsurprisingly — in favor of the bill notes that:

Americans don’t agree on much these days, but 80% of us agree that corporations do not pay their fair share of taxes, according to a recent Pew poll. On Monday, Minnesota Rep. Emma Greenman, DFL-Minneapolis, introduced a bill that could do something about it. [Emphasis added]

But, assuming this represents a problem, how does this bill address it?

It doesn’t. Trying to answer this question, Rep. Greenman strikes a disappointingly vague note:

“This is a piece of information, just disclosure,” Greenman said. “It puts no more burdens on these corporations, and I think it’ll be useful for policy-making, to the public and for creating a fairer economy.”

She doesn’t explain how.

The op ed is titled “We should know what large corporations pay in state taxes” but, again, fails to explain how this will solve any perceived problem. Instead, it offers a series of reheated, barely connected talking points mostly cribbed from a new paper from the Roosevelt Institute.

We are told that “When measured as a share of the economy, U.S. corporate profits are near an all-time high, while corporate tax collections are near a historic low.” This may be true, but this bill does nothing to change that.

We are told that “The unsurprising result is a greater burden on workers and families,” but this simply isn’t true. Research finds that the incidence of corporate taxation — who actually bears the burden — falls on either workers in the form of lower wages or consumers in the form of higher prices. Increasing corporate tax, in other words, increases tax on individuals, as Minnesota’s own Department of Revenue has previously found.

The author simply lists a number of supposed fiscal maladies, not a single one of which will be remedied by this bill. Indeed, he admits that “Greater transparency in state taxes won’t solve all of these issues…” It won’t solve any of them. It is pointless.

Extreme

But it is more than that. The Minnesota Reformer also reports that:

…the state’s business lobby and trade organization are against the proposed bill (HF4513).

Kurt Zellers, CEO of the Minnesota Business Partnership — which lobbies for the state’s biggest companies like 3M and Cargill — questioned the legislators’ intent , saying it would make corporations’ tax information available to competitors “or worse, nefarious dictator-led countries.”

“Why would any lawmaker want to punish homegrown Minnesota businesses and put them at a competitive disadvantage? There’s a reason no other state in the nation has passed a law like this,” Zellers said in a written statement to the Reformer. “Our lawmakers should never jeopardize our companies and their employees.”

The Minnesota Chamber of Commerce questioned the legality of the bill.

“This bill violates the long-standing principles of taxpayer confidentiality, likely runs afoul of federal law that prohibits states from releasing tax return information and undermines Minnesota’s competitiveness as other states do not require similar public disclosure of confidential tax return information,” said Beth Kadoun, vice president of fiscal and tax policy with the Minnesota Chamber, in a statement. [Emphasis added]

“[N]o other state in the nation has passed a bill like this” and no other state has a top rate of corporate tax as high as ours. Once again, Minnesota is the laboratory for extreme policy: what you might call “the Minnesotan Experiment.”