At Growth & Justice, we believe fairness means taxes proportionate with the ability to pay.
Fairness must be both comprehensive and transparent. “Comprehensive” means every sector of our economy and our population contributes, and the system does not discriminate against certain types of businesses or favor some companies over others within a sector.
“Transparency” is also a dimension of fairness. In fact, business taxes lack transparency, because, as we’ve noted, taxpayers may not see how they bear the ultimate costs — and as a result, may be acquiescing to level of taxation they might not otherwise approve.
The tax system should also be able to consistently produce sufficient revenue without constant tinkering through business cycles or as needs evolve. Investing adequately in education that leads to greater post-secondary attainment increases the skills and expands the number of people in the workforce. An adequate health and welfare system helps more children arrive at school ready to learn — and provides a safety net for employees of low-wage businesses. Our future economy depends on educating and preparing the next generation for work, so these benefits should not be discounted.
The tax system is complex, for businesses in particular. Simplicity contributes to efficiency, both for government and business.
Establishing simplicity is a constant struggle as initial reforms are inevitably complicated by legislated efforts to reduce tax impacts, motivate or discourage behavior, and respond to changing conditions.
To keep Minnesota competitive, tax reform must do more than lower taxes. It should enable investment that supports growth and prosperity.
States do better long-term if they invest in public assets beyond the minimal police, streets and utility services called for by proponents of limited government. These critical public goods include education, transportation and health. If government does not make capacity-building investments in its people and places, employers must either pay the price themselves, or go where the human capital and infrastructure are better organized to create value.