When it comes to tax policy, the road to prosperity is paved with low, flat rates, not gimmicky credits.
A recent editorial in the Star-Tribune appears to agree, criticizing a proposal for a two-year tax credit, and calling instead for some reforms.
The editorial, “GOP has a better business tax idea,” correctly, dings Gov. Dayton’s one-time tax credit proposal, saying that a $3,000 credit this year and a $1,500 credit next year (given only to businesses that hire new employees, and even then, only to employees from specified groups of people) isn’t a sound basis for such a consequential decision as hiring a new worker.
The general theme of a flatter, lower corporate tax rate is also a sound one that the governor and Legislature should work towards. As the editorial points out, the Foreign Operating Corporations credit could be a sticking point.
As a bonus, the Star-Tribune recognizes that at least some taxes on employers are in fact taxes on employees. It calls the statewide business property tax “a regressive tax — that is, one that is borne disproportionately by low- and middle-income Minnesotans, in the form of higher prices and lower wages.”