This summer we brought you word of Minnesota Governor Tim Pawlenty's plan to create a "21st Century Tax Reform Commission." The 15 member Commission is meeting throughout the fall and is charged with "providing advice and recommendations to the Governor on options for revenue-neutral tax reform." The Governor said that "this Commission will specifically focus on improving our job climate by reforming Minnesota's tax laws."
The Commission seems bent on discussing ways to attract businesses solely by changing tax policy, apparently assuming this is the only factor that affects a state's economy. ITEP responded to a posting by the Commission asking for public comments. We took the opportunity to remind the Commissioners that taxes actually account for a small portion of business expenses, that businesses thrive when public investment thrives, and that low business taxes don't guarantee a company's loyalty. For example, in Minnesota, "despite receiving millions of dollars in tax breaks and incentives from federal, state, and local governments, Northwest Airlines has repeatedly reduced employees and threatened to close local Minnesota facilities." Click here to see our comments in full. To stay updated on the Commission's activities check out the Minnesota Budget Project's Minnesota Budget Bites blog.