Taxes and Education

Many Republicans like to talk about how our allegedly high taxes in this state cause businesses to look elsewhere to locate. People talk about how businesses are leaving Minnesota for South Dakota, North Dakota, Iowa, or other low-tax havens. Whether this is true or not is only part of the story, as an article in the Star Tribune points out today. Iowa, supposedly a destination for employers seeking lower taxes, is losing many of its college-educated citizens and is looking to desperate measure to retain them.

Reading that article shows that of all the states in the upper Midwest, only Minnesota is able to retain young college-educated people. All of the so-called tax haven states are losing them. Apparently, high-tax Minnesota is doing something right, despite the climate.

People who know their stuff realize that Minnesota's highly educated citizenry, not its tax rates, are what power the state's economy. If businesses do leave for other states, the jobs that disappear are typically lower-wage, less-skilled jobs, and higher-wage jobs in many cases take their place.

If Republicans get their way and cut taxes to the detriment of education, they will be in for a shock. Instead of helping the economy here generate more high-wage jobs, these jobs will disappear. Whatever jobs we create will be low-skill and low-wage. Total employment may increase, but it's hard to see how productivity or median wages will do so in these circumstances. If our leaders in the legislature don't realize that education and health care is what attracts workers and businesses to this state, we are going to become exactly like our neighbors.