High tax rates ≠ high revenues
Lower tax rates incentivize economic activity and therefore expand the tax base. High tax rates do the opposite
All politics is local, as they say. The truth of that was on display again last night as Minnesota’s Senate approved a record $1.9 billion infrastructure package. The Star Tribune reports:
The Minnesota Legislature cleared the largest public works infrastructure package in state history Thursday, overwhelmingly passing a long-delayed bill authorizing nearly $1.9 billion in public borrowing to pay for roads, wastewater treatment and a slew of major construction projects.
And almost everybody gets their cut:
Senators backing the measure noted that the funding is split roughly equally between rural areas and the metro area. Lawmakers also sought to distribute the money fairly equally between DFL and GOP districts.
“This bonding bill will touch every Minnesotan in this great state,” said Sen. Sandy Pappas, a St. Paul Democrat who serves as vice-chair of the capital investment committee.
As the state readies itself for this tidal wave of cash, its politicians are shouting themselves hoarse claiming credit. The Duluth News Tribune reports: ‘$1.87 billion bonding bill to help shore up Duluth’s failing seawalls‘, a story subheaded: ‘District 7B Rep. Liz Olson, DFL-Duluth, is looking to the funding to provide jobs and help jump-start Minnesota’s economy.’ Any similar boost to her electoral chances is, of course, entirely coincidental.
This is not a partisan dunk. Senator Paul Anderson (R-Plymouth) released a statement informing his constituents that:
The bonding bill has a couple of local projects, including $5 million in funding for the Plymouth Creek Center expansion project, and $4 million for the Wayzata Boardwalk-Lake Effect project.
Those unfamiliar with the Plymouth Creek Center expansion project might be interested to learn that their money will be funding:
The overall project includes renovating the 30,000 sq. ft. existing building and expanding to have a total of 111,410 total sq. ft. The building will have three wings:
- Event – ballroom and meeting rooms
- Education – active adults, youth, arts, music and stem rooms
- Active – walking track, gym, fitness rooms and indoor playground
Auxiliary spaces will include green rooms, sensory room, parents rooms, party rooms, lounge areas and art gallery.
But the most gluttonous guzzler of pork – certainly the most shameless – has to be District 58 Rep. Matt Little (DFL), who triumphantly tweeted:
My opponent criticized me for voting no on the previous bonding bill. I voted no as it only had ~$200K for my district. Today, I voted yes: $260K-Lakeville water, $1.75M-Northfield transit, $6M-Lake Byllesby Dam, & $13M -Randolph wastewater treatment. Never take the first offer! pic.twitter.com/7eupspERWI
— Matt Little (@LittleSenator) October 15, 2020
Remember, what Rep. Little is being offered is your money, or, more accurately perhaps, your kids’ money. What Rep. Little is celebrating here is his skill – election season is no time for modesty – in taking money from you and your kids and giving it back to you with his name stamped all over it. This is modern party politics in a nutshell.
John Phelan is an economist at the Center of the American Experiment.