Business forum: Shooting ourselves in the wallet

  • Article by: JIM ULLAND
  • Updated: February 3, 2013 - 3:35 PM

Tax changes mean higher-income Minnesotans could be packing themselves off to Florida in greater numbers.

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slericksFeb. 4, 13 7:09 AM

I am a 68 year old retiree. My wife and I have a home in both Northern Minnesota and SW Florida. We have paid taxes in MN. during our working years and our more recent retirement. Loyalty only goes so far and we are at the tripping point. Dayton's proposed "Snowbird Tax" and the 2% tax increase on top wage earners are showing the rest of the country that Minnesota is an unfriendly state for people that have been high achievers. Before you decide Dayton is on the right path ask yourself how many new auto plants have been built in Minnesota, while many have been built in tax friendly states. Are you concerned that Delta, Honeywell, Wells Fargo, The St Paul Companies to name a few have moved their headquarters out of Minnesota after recent mergers? With plans for a major increase in the commitment made by the Mayo Clinic in Rochester should we be making it more difficult for Mayo in recruiting our nation's top medical talent? We have been very fortunate to be the home of many of our nations great companies, which has helped us achieve a high quality of life. I can only hope that much of what our Governor is proposing will not prevail.

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annsypFeb. 4, 13 8:50 AM

I have a different opinion. The "snowbird tax" is a matter of simple fairness. Snowbirds are, by and large, at the higher end of the income scale. In most cases, they took advantage of the generous services of the state of Minnesota---the educational system, the transportation system, the generally responsive and uncorrupt government---to achieve their financial success. Having arrived at the point where they have significant ability to contribute to Minnesota's tax base, many of them begin spending six months and a day in low-tax states (like Florida), while maintaining homes here the rest of the year. All they give up is the Minnesota homestead exemption. In effect, they get to live here tax-free for half the year, using the parks and driving on the roads the rest of us pay for and generally getting all the benefits of Minnesota citizenship without contributing any income tax. Yes, they pay sales taxes but I doubt they cover the cost of providing them state services. Why is this fair? If the snowbird tax causes them to move permanently to Florida, Minnesota might well save money.

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sturdlyFeb. 4, 13 9:36 AM

...Finally, someone explains in very simple terms, how obvoiusly distructive Dayton's "fairness" attacks on the wealthy will be for the state of MN...and who will be left paying Dayton's bills as these well-healed shoppers migrate south .....Well, those who remain in MN will have to make up for the loss in revenue, or....the state can always REDUCE the spending (never happen) .... What this author failed to include: the "snowbird" tax and how that will drive a certain number of the most wealthy out altogether, and all of the above will send regular every-day spending (food, cars, entertainment, etc) by those with the biggest budgets, to other states....This last point is never mentioned.....The impact of wealthy people spending money will HURT the state.....GDP will take a hit....So Mark Dayton can IMPOSE fairness.....

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tsalonekFeb. 4, 1312:08 PM

Great article. The outcome seems pretty obvious... more taxes across less people. Well said.

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sturdlyFeb. 4, 13 4:41 PM

......."I see it differently"... That's just it, they are mostly already gone (most retired) ...Some are citizens (residents) of some other state and some are not... yet, but look out below...Many come up here part of the year (often up to five months) ....While they are here they are the population who make outsized contributions to the GNP in MN ..... (because many of them have lots more money than the average citizen)....So, send them packing, you say..... The snow-bird tax will surely peal off several multi-millionires, who will spend that money elsewhere...My wife sat next to two such fellows last week, one on the way to Naples, and another on the way back.... She was surprised at how passionate they were about what is happening....It will take 100's of middle-class taxpayers to just relplace what these TWO guys (and both are still MN residents, just now becoming residents of other tax-free states) pay the state of MN ..... There IS a tipping point, and these new ideas that are being floated have caused some to react....

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annsypFeb. 4, 13 5:29 PM

Sturdly, I have never seen a study of the impact of snowbirds' spending in Minnesota. You acknowledge that many of them already have out-of-state residence and avoid all income tax. Are they really spending so much money during the six months they're here that our state economy would suffer significantly without them? Most people of retirement age---and I'm almost there myself---are looking to jettison possessions and declutter, not buy lots of new stuff. I suppose they buy groceries, go to restaurants and buy theater and sports tickets but are they buying big-ticket items? I doubt it. I could be convinced by facts, but I haven't seen any. Meanwhile, I stand by my comment that there is a real fairness issue here. It's ironic that many of the well-heeled are forever railing at the people who make too little money to pay federal income tax, yet see nothing wrong with living half the year in a state income-tax-free, even though they have a clear ability to pay. The most fortunate in our society seem to feel chronically aggrieved at their sorry lot, at the same time as more and more income has gone to the very top tier. Why?

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duluth56Feb. 9, 13 2:39 AM

The 'Snowbird Tax' would raise $15 million per year. It is entirely possible that the lost sales tax from their choosing to spend summers in Hayward not Brainerd could cover that spread. ______________________________________________ Double check my ballpark math Ann: 7% sales tax (up to 12% in Canal Park, Duluth) Thus need $214,285,714.28 in sales to cover the $15m they claim it will raise. ______________________________________________ $214m/ 60k snowbirds (read that statistic from state gov site but if you visit Florida in the winter Minnesotans are everywhere haha so might be more like 200k) $3,571.42 per person each year. Here for 5.9 months (That was gov. dayton's quoted number)= $605.32 per month = $151.33 per week. _____________________________________________________________________________________________ Keep in mind a round of golf is about 35 per person and these Snowbirds are going to rent the golfcart too haha oh man I crack myself up. So there you have it a round of golf per week and grocery's. Not a single big ticket item purchased. For a bonus add: restaurants, theater & sports tickets. Boom. Easy math peeps.

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bradgrussMar. 2, 13 9:01 AM

Obama's plan is working so well for the nation that Dayton figured he would do it all over again in MN. Sorry, but it will backfire and at some point in time the root cause will have to be faced and that is simply; reducing govt spending.

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