Minnesotans are leaving the state in droves because of high taxes -- or, at least, that's what a conservative think tank would have you believe.
The Freedom Foundation of Minnesota issued a report on Tuesday that proffers that thousands of Minnesotans are moving to states with more competitive tax rates, costing Minnesota state and local governments hundreds of millions of lost tax revenues at a time of historic budget deficits. Between 2002-09, Minnesota lost an estimated 54,113 residents to other states, states the report, people who also took their incomes with them. Between 1995 and 2005, the total amount of income leaving the state was at least $3.7 billion, on which state and local governments would have collected $423.3 million in additional taxes. Compounding over the 13 years of the study, Minnesota lost $22.7 billion in net income and $2.55 billion in state and local tax revenue.
"The data shows that people with higher-than-average incomes are leaving Minnesota for states where taxes are lower (especially income taxes), union membership is lower, population density is higher, cost of living is lower, and the weather is warmer," states the report. It also states the obvious that lawmakers can do little about the weather, but that "Minnesota should work toward reducing the tax burden via reductions in the income tax which would encourage both people and their incomes to stay in Minnesota or move into the state."
Both Florida, with no income tax, and Arizona have lower tax burdens, it states.
Now wait a minute. Do we have another case of finding statistics to make any point? Are people really leaving the state because of high taxes? We think not. Perhaps the largest reason is what the report barely mentioned - the weather. Baby boomers are getting ready to retire and want to seek warmer climes, Florida and Arizona included. And the overall class of baby boomers is wealthier than any other generation before them, and are able to trek to warmer climes for extended periods.
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And even the issue of higher taxes is a bogus argument. Minnesota's Price of Government, the take of state and local taxes from income, has declined over the last 10 years, not increased. And Minnesota enacted huge tax cuts in 1999 and 2000, and haven't raised income taxes since, thanks to a governor with a no-new-taxes pledge.
In fact, the uptick in out-migration started with the Gov. Tim Pawlenty administration and has continued each year since, so higher taxes can't be the reason.
It seems as though we have a premise looking for facts to prove it. Anyone have a grain of salt?
