Several findings are showing that a “wealth exodus” is occurring in Minnesota. One finding by the Center of the American Experiment says in 2013 to 2014 alone, Minnesota lost out on roughly one billion dollars in net household income. Peter Nelson is the Director of Public Policy for the Center and says that IRS data shows that with few exceptions, Minnesota loses taxpaying families to lower-tax states, explaining, “When you look at the top ten states where Minnesota loses income, we are losing income…five of those top ten states impose zero income tax.”
But could this wealth exodus be explained by retirees flocking to warmer climates? Nelson says the data suggests otherwise, stating, “When you look in to the data, and you see who is moving by age and by income, you see that it’s middle age people who are moving. It’s middle age people in their prime earning years that are moving.”
Twin Cities Business also looked in to why so much money is migrating out of Minnesota. Their study shows that 1.5 billion dollars left Minnesota in the last two years, saying the findings directly point to tax policy in Minnesota as the catalyst.
Both studies considered if other factors could be contributing to the migration out of Minnesota, and concluded that taxes were repeatedly the number one reason for those leaving. In fact, Editor in Chief of Twin Cities Business Magainze, Dale Kurschner, says it comes up as the top three reasons, explaining, “Tax came up as the top three reasons… personal tax, estate tax, and the way the department of revenue goes after people, insinuating or accusing them of not paying as much as they should be.”
Kurschner says that Minnesota is not only losing out on income, but is losing out on the top-income earners themselves, explaining he found that most of the individuals leaving contributed greatly to their communities. Kurschner says those leaving were “on the school boards, they contributed to charities, they mentored other businesses, they started businesses, they helped others by investing in their businesses.”
At the Minnesota State Legislature both parties are arguing over how much of the 900 million dollar budget surplus should be directed towards tax breaks. Lawmakers have until May 23rd to find some middle ground. Be sure to subscribe to Alpha News to make sure you don’t miss out on all of our coverage of this legislative session.