Over the last few months, Gov. Dayton and now Attorney General Lori Swanson have made it clear: if you are a small business owner, a larger corporation or even a major philanthropist, you are not welcome in Minnesota.
The not welcome here parade started in January when Dayton released his “tax reform” plan. The governor’s tax reform plan proposed to add sales to all business-to-business transactions. His plan drew instant objection from businesses large and small across the state. Because no other state in the country imposes an across-the-board sales tax on business-to-business services, many companies started to consider the possibility of relocating to another state.
But it wasn’t just Dayton’s business-to-business tax that got people thinking about relocation. The governor has also proposed increasing taxes on people who reside outside of the state for more than six months. His so called “snowbird” tax would levy tax penalties on individuals who often want to escape our Minnesota winters and our high tax climate for more weather- and tax-friendly locations.
But, of course Dayton’s “not welcome” here proposals go beyond just snowbirds and businesses. He is the champion of the “tax the rich” mantra. Any entrepreneur or small business owner believes they are a target for higher taxes with the governor’s constant drumbeat of “the rich don’t pay their fair share.”
In addition to targeting small business owners and job creators, the taxing tyrant Dayton also wants to close “corporate tax loopholes.” This is code for higher taxes on Minnesota corporations that have foreign operating profits. Even though Dayton dropped his plan to extend the sales tax on business-to-business services this year, his tax plan does include raising the top income tax rate by 23 percent on any one earning more than $150,000 a year.
As if it is not bad enough to have the governor parading around with the chant of “higher taxes,” he has been joined of course by DFL leaders in the House and Senate. Not only have they joined Dayton in the choruses of higher income taxes but they have piled on with a laundry list of additional taxes such as a tax on Internet purchases, higher gas taxes, a wheelage tax, additional deed taxes, plus a health insurance tax.
But the DFL legislature doesn’t stop at just increasing taxes on everything and anything that businesses do; they have also proposed raising the minimum wage by 45 percent. Between Dayton and Democrat legislators, it’s hard to distinguish who is doing more to hang out the “not welcome” here sign.
And just when you thought no one could do more to drive a stake in the entrepreneurial spirit in Minnesota, AG Lori Swanson rides into the public spot light.
Last week, Swanson held a public meeting to lamblast Sanford Health executives about a possible merger with Fairview Health Services. The undertone of the hearing was that Swanson didn’t approve of the non-profit health care organization, Sanford Health’s, close association with its main benefactor, T. Dennis Sanford.
Sanford Health got the message. Just days after Swanson’s public ridiculing of Sanford Health, their CEO, Kelby Krabbenhoft, announced that a possible merger with Fairview Health was off. In a public letter he said the possible merger “has turned into a situation that finds us being unwelcome by some interested parties and key stakeholders.”
For some reason, Swanson didn’t appreciate the idea of St. Paul native and University of Minnesota graduate Denny Sanford playing a major role with the University of Minnesota’s hospital and medical education program. Despite the fact that Sanford has no official position with Sanford Health, his affiliation with the operation has been brought into question. Swanson even stated that investigators in her office had a hard time finding anyone at the University of Minnesota that wanted to go into business with Sanford Health. That seems a little hard to believe, considering Sanford Health is the largest non-profit rural health care system in the country, with 35 hospitals and 140 clinics in eight states. Why would Minnesota’s Attorney General not want such an organization to play a major role in Minnesota health care delivery system?
It seems inconceivable that elected officials in Minnesota would rebuke a large and well respected business like Sanford Health. At the same time Swanson was yanking away the welcome mat from Sanford Health, she also slammed the door in the face of Denny Sanford, who has been recognized as one of the top 50 philanthropists in America. He alone has donated more than $600 million to the health care organization that bears his name.
With the recent actions like that of Swanson and the tax policies proposed by Dayton, and the DFL-controlled legislature, Minnesota’s reputation will soon evolve from being just a high-taxed state to a state with a hostile business environment. At a time when our state’s economy is starting to rebound Dayton and his DFL cronies are sending the wrong message across the state and around the country by pulling the welcome mat from out from under the feet of our business leaders, entrepreneurs and philanthropic community.
Former state legislator and small business owner Phil Krinkie is president of the Taxpayers League of Minnesota. Contact his at 651-789-0092 or visit www.taxpayersleague.org.