Posted: 04/11/16 12:04
by Dave Mindeman
I want to discuss a study done by the Republican think tank - The Center For The American Experiment. They take IRS data and use that to form some conclusions. I question the conclusions.
First, here is the premise:
Data from the Internal Revenue Service (IRS) point to one clear and worrisome fact: People vote with their feet and Minnesota is losing
population and income to lower tax states.
And what states would they be?
Arizona, Colorado, Florida, Georgia, Nevada, South Dakota, Texas and Washington.
At least that is the states they chose to list. They left off 2 other states in the top 10 in this regrard. California (#4) and North Carolina (#8). Obviously, for their purposes, using California in a "low tax" migration is not the right narrative.
But look at these 10 states. With the exception of South Dakota and Washington, what do these states have in common?
South Dakota and (oddly) Wisconsin are net negatives for MN migration. They are border states and the back and forth population flow is somewhat explainable. We get positive net migration from North Dakota, Iowa, Illinois, and Michigan. A sampling of Midwest ebb and flow.
But the vast majority of MN migration heads south and to the west coast. Is that a tax issue or a weather issue? Yes, a number of southern states are low tax, but what about California (#4) or Oregon (#12) or Wisconsin (#11)? Hardly low tax states. (The study explains Wisconsin as a Twin City expansion, since most of the migration is to the western Wisconsin counties - probably a valid argument.)
The study even mentions the geography, but still wraps it into a tax conclusion, rather than climate.
Then there is the point about "who" is moving. And again the Center points out that higher income earners are the ones leaving our state. The older the person, the more likely that the age group has a net loss in population.
So, again, is that a surprise? Older people have been heading south from Minnesota for a generation. People with higher, stable incomes may consider taxes as one variable, but, likely, the more important aspect is dealing with the elements.
And frankly, tax reasons for the higher income movement is pretty questionable. After all, when your income is based on retirement money, dividends, or bond income....your taxes are controllable in an accounting sense; no matter where you live.
In the age group, 26-34, Minnesota has a net positive migration. The study classifies them as "low income" earners. Almost as if they are a drag on the state economy. The truth could also include the fact that young people just starting out, choose Minnesota to establish roots....and they have a number of earning years ahead of them.
One troubling note is that young college graduates who leave the state, do not often come back. That is the "brain drain" in our attractive education training ground.
This study uses the IRS data to draw its own conclusions. Those conclusions are not supported by actual facts, just their own logic. Here is one of their conclusions:
IRS data show that Minnesotans tend to move to low tax states. A review of the tax policies of the top ten states receiving income from Minnesota with the top ten states contributing income to Minnesota shows Minnesota tends to lose income to low tax states and gain income from high tax states.
The same paragraph could state that "Minnesotans tend to move to less harsh climates and the migration that comes to Minnesota tends to be coming from other Midwestern states as economies ebb and flow."
Nobody disputes the data. But the idea that it must have a tax correlation has been an Republican talking point for decades.
The CFAE think tank does less thinking and more slanting.