No State Has EVER Taxed or Borrowed Its Way to Prosperity

Tax hero Rep. Mark Buesgens had a guest commentary in the Feb. 14 Shakopee Valley News (link currently unavailable) that will rock the world of all of you first principles conservatives.

This year, legislators will spend most of the session pondering which taxes to increase, debating how much money to charge the state’s credit card, and a countless variety of new laws, (i.e.: Is a sheltie more dangerous than a terrier?). However, if this legislature truly wants to make a long-term difference in people’s lives, we should devote the vast majority of our time to dealing with the economy.
It is easy to forget that a year ago we had a budget surplus that topped $2 billion. Liberal spending policies and misguided priorities burned through the entire surplus with little regard for what effect it would have on taxpayers or the economy as a whole. We will now have to deal with a $373 million budget deficit that in all likelihood will get even deeper once session begins.
As the deficit grows, the consequences of mismanaging the surplus are coming into sharper focus. We’re losing jobs, the economy is heading south and our wallets are squeezed even tighter.
So already we hear talk about more borrowing and alleged stimulus plans from state politicians who apparently cannot fathom that tax relief will stave off impeding economic doom. Perhaps if they had heeded our call for tax relief last year none of this would be necessary. Don’t count on borrowing for a solution either.
Our well-respected and nonpartisan state economist even said borrowing “provides no significant stimulus to an ailing economy.”
The facts are simple: No state has ever taxed, or borrowed, its way to prosperity. The surefire way to improve the economy can be summed up in one word: Growth.
Our economy grows when taxes are low for businesses that want to create jobs. We have to compete for jobs in a global economy, but we don’t even score well against neighboring states when it comes to a jobs-friendly tax climate. Chances are you’ve heard the radio commercials boasting about what a wonderful place South Dakota can be for a business. South Dakota doesn’t tax personal or corporate income; we tax both at some of the highest rates in the country, and for the most part higher than our neighbors. As a state we currently rank 37th in job growth. No wonder we are suffering more in this current economic climate than most around the country.
Here is another scary fact: In 1972 the top three job providers in the state of Minnesota were 3M, Honeywell and Dayton-Hudson; today three of the top five employers in the state are the State of Minnesota, the University of Minnesota and the federal government. Such a dramatic change offers up two points. The first illustrates that government sprawl has gone on unchecked for far too long. Second, look at the names of those economic titans. 3M is still here, but excessive regulation threatens to drive some of their best jobs over seas. Honeywell is long gone while Dayton-Hudson is more familiar to us now as Target. It should sound a clear warning when none of these economic titans, or other business both large and small, can keep up with expanding government payrolls and the taxes we impose to afford it.
Besides low taxes, the legislature should spend time reviewing all of the regulatory burdens placed on businesses using a thorough cost-benefit analysis. We need to realize that excessive regulations produce costs that result in stagnant wages and higher costs for consumers. Eventually, business growth is stifled and, ultimately, businesses will move to a friendlier environment.
If we want this legislative session to have a long lasting, positive impact on Minnesota’s future, we must first focus on nurturing a strong economy. Failing to do so will only extend and deepen our current downturn, putting into jeopardy all the necessities and niceties that we’ve come to take for granted.

Disclosure time. Rep. Buesgens is one of the fine House Representatives from my district - 35 (Mike Beard being his seat mate and my rep). However, even if he was not one of our fine representatives, I would be singing the praises of this op-ed. Rep. Buesgens covers, in one setting, all of the things that many of us here at True North have been saying needed to be changed.

1) Mixed up priorities. This can be said of the Democratic leadership in St. Paul AND DC. Instead of releasing the $200 million of federal emergency dollars, we are debating banning certain breeds of dogs. Instead of fixing our ailing infrastructure, the Legislature is spending money on bike paths and preferred parking for hybrid cars.

2) So-called stimulus packages. The federal government is going further into debt in order to send every person in America (everyone who does not earn over $100,000 a year that is) a check for $300.00. Rather than meaningless gestures, the government should (as Rep Buesgens suggests) look at the regulation and taxation that makes it harder and harder for businesses to do business in this state and country!

3) The fact that the number 1 (2 and 3) employer in the state of Minnesota is government! Government does not produce ANYTHING so the last thing that this state needs is for the government to employ more people!

The excessive taxation that will be required to sustain the type of growth in government that our friends in the DFL want will be an economy KILLER, not savior. We need more clear headed thinkers like Rep. Buesgens in the legislature to continue to drive home this point. Then maybe we will actually have a government that serves the people, rather than having a people who are in indentured servitude to the government.