Taxes

Corporate Tax Cuts Increase Income Inequality

North Star would like to thank Professor Louis Johnston of the College of Saint Benedict/Saint John’s University for critiquing earlier drafts of this article.   Conservatives typically argue that the benefit of corporate tax cuts will trickle down to workers in the form of higher wages. New research published this month indicate that workers do…

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Emergency School Aid Increase in Context

Governor Dayton recently proposed a one-time “emergency aid” increase of $138 million to Minnesota public schools in fiscal year (FY) 2019, in the form of a two percent increase in basic general education formula revenue and selected categorical aid programs. This aid increase would replace a portion of the real (i.e., inflation-adjusted) per pupil school…

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So Many Myths, So Little Time

The first installment in this series scratched the surface of the abundant supply of Minnesota economic and fiscal policy myths. This article scratches a little deeper, knocking off three additional myths. Some of these myths are not unique to Minnesota, but all are heard in Gopher State policy debates. And all are false. Myth #1:…

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Debunking Minnesota Economic and Fiscal Policy Myths

Minnesota is a land of 10,000 lakes and almost as many misconceptions about the size of government, growth in public revenue and expenditures, and performance of the state’s economy. Some of these mistaken beliefs are the result of an innocent misreading of the data, while others are the product of deliberate disinformation campaigns. The following…

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Tax Triggers: An Unnecessary Fiscal Autopilot

At least officially, Minnesota’s general fund is projected to have a budget surplus in the current and upcoming bienniums. Conservatives have proposed a “tax trigger” that would automatically reduce state individual and corporate income taxes whenever such a surplus occurs. Such proposals are unnecessary, regressive, fiscally irresponsible, and would skew fiscal policy outcomes away from…

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Budget Deficits on the Horizon

With an official projected state budget surplus of $329 million in the current fiscal year (FY) 2018-19 biennium and $580 million in the upcoming FY 2020-21 biennium, some state lawmakers are giddy about the prospects of more tax cuts during the 2018 legislative session. However, there are at least three good reasons why Minnesota policymakers…

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Minnesota Per Capita GDP Growth Surpasses U.S. Average

High per capita gross domestic product (GDP) states—such as Minnesota—tend to have lower rates of GDP growth over time, for reasons discussed in part 1 of this series. However, Minnesota has successfully bucked this trend during the current business cycle, with per capita GDP growth nearly double the U.S. average—a trend which stands at odds…

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The Federal Tax Act’s Minnesota Impact: Steeply Regressive

Corporate elites and wealthy Americans celebrated when Congressional conservatives and President Trump rolled out the so-called “Tax Cuts and Jobs Act” (TCJA) late last year—and with good reason. The TCJA was overwhelmingly regressive, sending a disproportionate share of tax relief to high-income households that have benefited from rising income inequality for decades. Analysis confirms this…

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