Thursday, January 20, 2005
Taxing the Rich Helps Everyone (Including the Rich) Do Better
The Twin Cities alternative weekly City Pages has a very good article this week on how the Minnesota Republican Party, just like in the rest of the nation, are so dedicated to making sure that rich people's taxes get cut or eliminated that they can't -- or won't -- see how it's killing what used to be a very nice place to live. You should go to the link and read the whole thing, but the last few paragraphs are essential:
In June 2003, St. Olaf College economics professor Terry J. Fitzgerald wrote an analysis entitled "Business Cycles and Long-Term Growth: Lessons from Minnesota" for the Federal Reserve Bank of Minneapolis. More specifically, Fitzgerald took an in-depth look at how the state's per capita income had managed to go from 14 percent below the national average in 1929 to 8 percent above it in 2001. Fitzgerald found that the state's per capita wealth really began climbing in the 1960s and continued steadily upward through the rest of the century. During that time, the number of Minnesotans who were employed rose from 41 percent in 1970 to 54 percent in 2000, a faster rate than the national average. Earnings per worker and worker productivity also increased more rapidly. This correlates with Minnesota's increased emphasis on education. [PW butts in: It also correlates with our willingness to tax our rich people.] In 1950, the percentage of Minnesotans who had completed four years of college was about average nationally; ditto the percentage of state residents completing four years of high school. But by 2000, Minnesota ranked third in the nation in the percentage of residents with a high school diploma, and seventh in the percentage who held a bachelor's degree. "Obviously, there is an important interplay between an education system that supplies educated people and a state economy with enough jobs that demand those educational skills," Fitzgerald wrote. Now [PW notes: After years of Republican budget cuts that Pawlenty rammed through when he was in the Minnesota legislature, and continued when he became governor] our education spending and job growth are below the national average. And while many other state budgets have survived the recent recession and have begun funding new investments with existing savings or new taxes, we borrow billions for roads, run in place on education, and continue to hack at billion-dollar shortfalls.
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