The Housley Solutions: Jobs & Economic Development
Being in the real estate business, we saw a turn in the economy before it was publicly declared a “recession.” Homes were taking longer to sell as the pool of buyers was drying up and there weren’t as many potential buyers relocating to the Twin Cities. Then in 2007, it got worse, and we started to see homeowners struggling with their mortgage payments, yet it hadn’t yet made the news.
In 2008, it got even worse, with many homeowners being upside down on their mortgages and a large percentage of them going into foreclosure.
Tens of thousands of Minnesotans have lost their jobs, endured pay cuts, benefit cuts and reduced hours. Minnesota’s poor business climate has contributed to this financial demise. Our anti-business tax, regulatory, and job creation climate has made this recession worse for Minnesotans than it really had to be.
It’s no surprise that this is where we ended up. It’s a logical result of public policies enacted by our legislature that have handcuffed our employers, employees and everyone else who has tried to grow a small business, pay taxes, give back to their community and keep the state moving forward productively.
So what are some solutions?
- Ease the tax burden on small businesses. 75% of Minnesotans are employed by small businesses. The only way a small business can expand is if they have more capital, more cash at the end of the day. If the government consistently dips their hand into the bottom line of local businesses, there is nothing left for expansion, growth, i.e. hiring more employees. This is exactly where we’re at right now. Our businesses are frozen, as they can’t afford to be taxed another penny. We will see more and more businesses close their doors in 2011, if something isn’t done to change this on Nov. 2nd. This isn’t a cliché, or a scare tactic, or someone making up theories because they want to get elected, it’s the truth. Talk to your small business owner down the street. They’ll tell you what they’re feeling & the crunch they’re under. They’ll also give you this same solution.
- Reduce license and permit fees on job providers to be no higher than in neighboring states. Again, when a business is deciding on where to base their headquarters, these license and permit fees add up, and a business will move to wherever their bottom line is the healthiest. MN is not winning in this category any longer.
- Reduce corporate income taxes. Contrary to popular belief, all corporations are not bad. They employ people. Corporate income taxes are not paid out of business profits, but passed thru to the consumer in the form of higher costs for the product. If they can make their end cost to the consumer cheaper, they will move elsewhere, where the corporate income tax is lower. This too is not fiction…remember Northwest, Honeywell and State Farm Insurance. Do we want to lose Target, 3M, Ecolab, General Mills & Medtronic too? If they have to continue to trickle down Minnesota’s corporate income tax to the cost of the product & end consumer, we will.
- Cut capital gains taxes. Minnesota has one of the highest personal income tax rates in the country, and unlike some states, gives no preference for capital gains when calculating income tax. Here’s the scenario that is currently happening in our state… A resident owns their investment for years, it earns interest (proportionate to inflation) & upon retirement they want to liquidate some of their investments to now use as income. When looking at the bottom line when selling their investment, a Minnesota resident will move to tax-friendlier state, like Florida, to take advantage of their lower capital gains tax. Minnesota residents have already moved to Florida, living there for six months and a day to get residency and then sell their investment. MN then gets zero of that tax dollar. Last I checked, something is better than nothing when it comes to income.
- Create a “one-stop shop” all new business permits, licenses and fees to make our state more customer-friendly for new businesses. Currently small businesses who are trying to do the right thing upon start-up, are burdened with poor response time in obtaining permits and licenses. Minnesota’s business regulations are cumbersome & small business owners should be able to make one call or one stop to secure the permits and pay the fees necessary to begin operation. Our state needs to become more user-friendly in helping our businesses comply.
New or expanding businesses pay taxes. New or expanding businesses pay more wages to more employees who pay taxes. The net result is more revenue for the state to fund its needed priorities through private sector job creation that benefits everyone. The alternative, attempting to fund state government through tax increases on individuals and small business owners works to stop job increases in the state and takes money out of the economy to pay for more government.
Businesses create jobs, not the government.
