Minnesota Chamber of Commerce Priorities & Grassroots

"In this world only two things are certain: death and taxes.' ~ Benjamin Franklin

People love to complain about taxes, yet we all understand the need to fund essential programs and services such as schools, public health programs and roads. As Minnesotans, we only ask that the tax laws be written fairly and that our tax dollars are used efficiently. The Minnesota Chamber makes those same requests when we advocate on tax policies at the state legislature. Our goal is to keep Minnesota competitive as a place for businesses to create new jobs and fulfilling careers for individuals.

Why Business Taxes Matter to All Minnesotans
Business taxes cannot be viewed in a vacuum. Tax studies show that most businesses recoup higher taxesby charging customers more for their goods and services, limiting employee wages and benefits, orreducing returns to shareholders. Businesses are increasingly competing on national and global scales. High taxes reduce their profits and make them less competitive in the marketplace. As a result, business owners are forced to make difficult decisions such as reducing workforce or relocating operations.

Regardless of where we work, all Minnesotans are affected by business successes and failures. Jobs are the backbone of our economy. As a state, we should enact policies that encourage businesses to create good jobs and economic growth. Excessive state taxes only serve as a deterrent.

Where We Rank
Minnesota remains one of the highest taxed states for businesses. We rank among the highest states for the individual income tax (10th) and the corporate income tax (3rd). In 2008, the Minnesota Chamber blocked proposed increases in the statewide property tax and corporate income tax. These tax rates are not attractive for start-up businesses or employers looking to create jobs in our state.

The projected deficit for the next two-year budget cycle biennium could exceed $2 billion. The 2009 legislative session looms important, especially if the economic downtown continues and there is pressure to raise taxes to close the shortfall.

Minnesota’s high business taxes are driven by two factors:

1. Budgeting is Hard… Raising Taxes is Easy. To their credit, legislators want to solve problems. As a result, the state government provides a lot of services to a lot of people. Unfortunately, government solutions are often complicated and expensive, as is their method of budgeting. Instead of establishing the amount of tax revenue available and prioritizing spending within those limits, the government often creates a wish list of projects and programs and then looks for ways to pay for them – usually with increases in taxes or fees.
2. Businesses Don’t Vote. Not surprisingly, voters are not in favor of increasingly higher taxes. Lawmakers understand this. They also understand that businesses pay taxes but don’t vote. It is tempting, then, to fund programs by raising taxes on businesses. This may seem like a great idea in the short term but the long-term effects on job creation and economic development hurts all Minnesotans.

The Minnesota Chamber studies tax policies around the nation. We frequently weigh in on tax debates to ensure that public policy will make Minnesota more attractive for good jobs, greater economic development and provide a better quality of life for all Minnesotans.

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Frequently Asked Questions about Fiscal Policy
The questions you want answers for.

Tax Solutions
Learn more about what the Minnesota Chamber is doing in Tax policy. View the Chamber's Fiscal policies and backgrounds

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