Yes, state taxes do affect jobs
All through the last Minnesota legislative session, the minority Republicans warned the DFL leaders that the tax increases they were proposing would hurt the economy, stunt job growth and drive businesses out of state. The DFL went ahead and passed their budget, replete with a plethora of tax hikes on businesses. Now, some businesses are looking for better places to do business.
One such tax is the sales tax on warehousing services approved by the DFL-controlled Legislature and governor. Customers of warehouses would have to pay the state’s 6.875 percent sales tax on top of their warehouse fees. When this goes into effect next April, Minnesota will be the only state in the union with that kind of tax. Warehouse companies would be at an obvious disadvantage.
So, several warehouse companies are looking at moving some or all of their operations to neighboring states. Whatever revenue increase the state expects from this tax will be offset by the losses in corporate and income tax from the jobs that will head elsewhere.
Minnesota legislators have time to fix this fiasco when the session starts next year. DFL leaders are scratching their heads trying to figure out how to cover the $300 million hole that would appear in the budget if they repeal it.
Here’s an idea from across the aisle. Cut spending!