The return of the ‘Misery Index’
The United States is currently experiencing its fastest rate of inflation, year over year, since mid-1982. Those of you who are old enough to remember that might also remember the…
On Friday, the Department of Minnesota Management and Budget reported revenue that was $489 million higher in April than had been projected. As the Star Tribune reported,
Personal and corporate income tax receipts drove the April windfall, with individual income taxes $388 million above forecast. Corporate taxes were up $133 million.
“We advise against making long-term policy decisions based on one month of receipts,” counseled MMB Commissioner Myron Frans. Sensible, but April is when most income tax payments are made, so this update is more important than others. And, for the year, tax receipts are now $573 million higher than anticipated, or 3.1%.
House Speaker Melissa Hortman also counseled caution, saying “There’s very troubling signs on the horizon. Minnesota’s economy is very dependent on agriculture commodities. And they have no certainty in their future because of the trade tensions.” But if she really is so skittish about prospects for the economy, why does she want to enact a $12 billion tax hike?
With near record high tax revenues already and a forecast surplus of $1 billion in the coming biennium, the case for hiking taxes on hard-pressed Minnesotans, which was already weak to begin with, just got a whole lot weaker.
John Phelan is an economist at the Center of the American Experiment.