Despite propaganda, Minnesota’s ‘high tax’ economy is crushing Wisconsin, Iowa

It turns out that our high-tax, commerce-strangling economy is something of a myth.

It turns out that our high-tax, commerce-strangling economy is something of a myth. Don Graham

Dark and perilous times are coming to Minnesota. Or so a group of wealthy, anonymous men would have you believe.

They’re the secret money behind the Center of the American Experiment, a Golden Valley “think tank” that does “research” on stuff it considers scary, like light rail, teachers, windmills, Edina schools, and the bane of all that is good and just, corporate taxes.

The center produces studies that could only pass a peer review at Schmitty’s Bar in St. Cloud – if the center was buying. But scientific rigor isn’t the point. All that’s needed is a patina of legitimacy to generate news stories, guest columns, and bullets for the holsters of state reps from Alexandria, who believe trickle-down economics is one of the 10 Commandments.

Minnesota’s newspapers and TV stations lap it up. So it was no surprise when the center issued a new report.

Summary: Minnesota’s economy is like a really mean witch who’s coming to eat your offspring.

Conclusion: Witches can only be stopped by cutting taxes.

It’s a message peddled by corporate groups every year as the Minnesota Legislature is about to convene. High taxes and regulation are driving us to ruin. Etc. Etc.

Yet the debunking began almost immediately with news that the Twin Cities now has the lowest unemployment rate of any major metro area in the country.

This was followed by the state’s announcement that it’s expecting a budget surplus of $1.5 billion next year.

Joe Atkins has been hearing this argument for years. He’s a former school board member, mayor, and state rep from Inver Grove Heights, who now sits on the Dakota County Board of Commissioners.

He recalls 2011, when Wisconsin’s new governor, Scott Walker, was about to launch a scorched-earth plan of hacking taxes and regulations, while slashing spending on everything from education to the environment. At the time, Minnesota had just elected Gov. Mark Dayton, who was charting a polar course.

Walker “made some comment like, ‘I dare you to compare Minnesota and Wisconsin,’” says Atkins. “So I decided to check.”

Atkins isn’t an economist either. But he is responsible for the well-being of his constituents. So every year, he looks at indicators that best reflect the health of regular people, then compares them to our conservative neighbors, Wisconsin and Iowa.

It turns out that our high-tax, commerce-strangling economy is something of a myth. In fact, Minnesota appears to be crushing it:

Taxes for a family with a median annual income of $55,754:
Minnesota: $6,453
Wisconsin: $7,202
Iowa: $7,593

Property taxes on a median value $184,700 home:
Minnesota: $2,155
Iowa: $2,762
Wisconsin: $3,602

Average household income:
Minnesota: $63,488
Wisconsin: $55,638
Iowa: $54,736

Job growth since 2010:
Minnesota: 10.1%
Wisconsin: 8.7%
Iowa: 3.9%

CNBC’s rankings of best states for business:
Minnesota: 6th
Wisconsin: 17th
Iowa: 18th

Number of Fortune 500 companies:
Minnesota: 19
Wisconsin: 9
Iowa: 2

State government debt, per resident:
Iowa: $1,821
Minnesota: $2,768
Wisconsin: $4,278

State gas tax, per gallon:
Minnesota: 28.6 cents
Iowa: 30.5 cents
Wisconsin: 32.9 cents

USDA’s state ranking for farm production:
Iowa: 2
Minnesota: 5
Wisconsin: 9

CNBC’s state quality of life rankings:
Minnesota: 3rd
Iowa: 7th
Wisconsin: 24th

Of course, no single set of numbers truly reflects the totality of an economy. But Atkins’ findings whittle away at the notion that Minnesota liberalism poses an existential threat.

“We actually pay less and get more,” he says.

In fact, one could argue that trickle-down conservatism – like Wisconsin and Iowa practice – poses a greater hazard, since tax cuts by the state level tend to just push the burden down to cities. The need for money doesn’t go anywhere. But state lawmakers get to look pretty, while city officials take the blame for jacking property taxes.

“The Wisconsin marketing team deserves a heck of a raise,” says Atkins. “They certainly have done a good job of convincing people.”